In theory, nonprofit social services exist to help the poor. They also make jobs available to their employees, which of course those employees want to keep. When the problem the organization is supposed to “solve” goes away, do those tasks as well. That is the nature of social work. It is not an indictment of social work, let alone social workers. All types of businesses, from auto repair shops to funeral homes, profit from other people’s misfortune. The financial incentives in the social services industry are such that dysfunction often has a positive impact on the bottom line.
The growth of the Homelessness Industrial Complex—the network of nonprofit organizations and clinics that provide housing, medical, and mental health services to America’s homeless population—exemplifies this principle. The philosophy of these organizations, known as Housing First, is to provide homes and amenities for the homeless with no strings attached. This, in fact, enables the very behaviors and pathologies that made their clients homeless in the first place and, not coincidentally, is leading to a growing client base for nonprofits.
Georgia Gov. Brian Kemp and the state’s Republican-controlled legislature are trying to destroy the homelessness-industrial complex by changing the incentives on which it operates. Senate Bill 62, signed by Kemp in May and based on model legislation from the Cicero Institute, requires municipalities to enforce camping ordinances and calls for an audit of nonprofit organizations that provide services to the homeless in the state to measure their performance measured in the actual reduction in homelessness in the communities they serve.
The bill directs the state auditor to review the performance of state and city-funded homelessness programs and the extent to which contractors and grantees have successfully met the metrics contained in their contract or grant. The governor and legislature are notified of the groups that have not met their terms of contract or have otherwise underperformed other social service providers throughout the Peach State.
“These measures may not sound radical, but they are.”
These measures may not sound radical, but they are. For decades, social service providers have siphoned money from Georgia’s state and local governments without much accountability, and in various ways advocate and implement policies that exacerbate the problems they are designed to solve.
For example, in 2020 the CEO of the nonprofit Atlanta Harm Reduction Coalition called on the state to legalize attended injection sites, which would allow addicts to use illegal drugs under medical supervision. Members of Legal Aid Atlanta, which receives grants from the state Department of Human Services, have supported the downsizing of state-run facilities for people with serious mental illness.
Georgia’s homeless crisis has yet to reach the levels of anarchy in California. Georgia ranks 29th among all states in the number of homeless people per capita and has almost halved its homelessness rate in the last two decades. However, since 2020, homelessness has risen about 4 percent nationwide, prompting the state to convene a task force to study the problem. The task force, whose recommendations were critical to the eventual passage of Senate Bill 62, uncovered — possibly unintentionally — evidence of waste and mismanagement in its homeless service system. A task force member, Partners of Care CEO Cathryn Marchman-Vassell, noted that her organization has 500 housing units under development. Each unit, designed as part of the group’s “Housing First” philosophy, costs approximately $40,000 to build.
As a result, taxpayers would pour around $20 million into non-binding housing units for the homeless. Later in the task force’s final report, also appointed Judge Glock of the Cicero Institute found that 50 percent of Georgia’s emergency shelters remain unused. In other words, tens of thousands of homeless people in Georgia are refusing to use shelters that the state has already provided, even though the state may allocate millions of dollars to building even more housing units that could attract even more homeless people to the state.
The task force also commissioned a study into the make-up of the state’s homeless population. In a survey of more than 25,000 homeless Georgians, they found that more than half of those surveyed were homeless, even though the state spent $62 million on tackling homelessness last year.
In Atlanta, where a more detailed study was commissioned, the task force found that of the city’s 3,240 homeless people, 740 had a serious mental illness and 639 had a substance abuse disorder. These numbers make it clear that the problem of homelessness in Georgia, as in other states, is linked to the wicked convergence of housing shortages, poverty, crime, substance abuse and untreated serious mental illnesses.
To find a stable solution, Georgia and other states must ensure that state-funded social service groups do not perpetuate the problems they are paid to solve. To do this, provider incentives must be balanced with government intentions and the demands of equity—that homelessness be eliminated, not enabled. In this regard, Senate Bill 26 is a much-needed step in the right direction.