The Shelter Trap: Managing Domestic Violence Facilities
October 12, 2011
October is Domestic Violence Awareness Month. In its honor, NFF is creating a series of blogs dedicated to financial issues facing this important sector. If you or someone you love may be suffering from domestic abuse, please call the National Domestic Violence Hotline at 1−800−799−SAFE.
Since 2008, NFF has worked with over 45 California-based domestic violence (DV) service providers to improve their sustainability and help them plan for the future. Through these Initiatives, we've developed a keen understanding of the challenges and opportunities of this important group. In a recently released report, we explore the characteristics, history, and funding environment of the DV sector in California, focusing in on the unique story of Center for Community Solutions, one of San Diego's oldest nonprofits dedicated to ending relationship and sexual violence.
In this post, we're providing an overview of some sector trends discussed in the report. Later this month, we'll be posting an interview with Center for Community Solutions to give you a sense of how the broad issues facing the sector actually play out, beyond the stats and trends.
Key Themes and Findings
What Does a California DV Organization look like? Most California DV organizations provide shelter and related support services, paid in large part through government funding (typically about 65-85% of total revenue). In terms of their asset composition, they tend to have a high proportion of P&E (~50%), low amounts of cash (~20-25%), about 20-25% in receivables, and 5% in investments. Between 2000 and 2008, the reliance on government funding provided stability and the opportunity to grow, due to gradual increases in overall government funding. Post-recession, the sector has faced a series of crises resulting from uncertainties in government funding.
Why Such High P&E? There are a variety of nonprofits in the DV field. They range from family justice centers, to health clinics, to organizations providing preventive services and more. According to our research, California DV organizations generally run shelters, in addition to providing a variety of other services. Shelters are a critical component of DV services, providing one of the most important safety nets to protect women facing abuse. As a result, government funding has been disproportionately skewed towards favoring organizations that run shelters.
So what's the real problem? Over NFF's thirty years at work, we've found over and over again that running and managing facilities has a destabilizing effect on nonprofits. And in our work with over 40 different California DV organizations, we've seen it again. Our consultants found that the intense, imbalanced pressure to run a shelter has created an incredible amount of instability in these vital organizations, particularly because they rely on government funding. And when that funding starts getting unpredictable, DV organizations are left with costly facilities that hinder their agility. Instead of being able to fluidly navigate around a tough financial situation, extensive facilities make them more like Titanics unable to change course.
With limited private fundraising capacity, DV organizations must now develop new models of sustainability to ensure that the critical safety net they provide doesn't tear. Over the next few posts, we'll go deeper into the challenges of the shelter-based business model and discuss some exciting solutions and alternatives that have arisen in the field in the last several years.