Philanthropy and homelessness in L.A. (Part 3 of 3): An alternative look at why things might have gone so wrong, and how grantmakers could perhaps do better

Oct 23, 2019

In wake of USC Center on Philanthropy & Public Policy’s must-read report, third of three-part series offers different take on applying theory, facing reality, and learning lessons for future giving.

This is Part 3 of a three-part series. Part 1 is here, and Part 2 is here.


As we’ve seen in Part 1 and Part 2 of this series, during the past decade, the major foundations in Los Angeles have committed themselves to a powerful “theory of change” in their struggle against homelessness. Following the latest social-science research, it is centered around “housing first ”—especially “permanent supportive housing” —designed to remove the chronically homeless from L.A.’s streets once and for all. 

So confident were the foundations in this theory that they moved vigorously into the electoral arena, securing $4.7 billion in public funding through the support of two local ballot measures in 2016 and 2017. All of this is ably and thoroughly described in the document reviewed in Part 1, Scaling Up: How Philanthropy Helped Unlock $4.7 Billion to Tackle Homelessness in Los Angeles, by James Ferris and Nicholas Williams of the University of Southern California’s Center on Philanthropy & Public Policy.

But we saw in Part 2 that even before the report was published this past August, developments—especially the release of the homeless count for 2019 two months prior—were already calling into question the wisdom of this grand philanthropic enterprise. In the face of the billions being spent, the number of homeless had actually increased by 16% in the city.

What lessons can be drawn for philanthropy by laying Part 1’s theory next to Part 2’s reality?

Before we tackle that, some caveats. This series is by no means an attempt to provide a full explanation for the rise in homelessness—which, as everyone points out, has many causes. Nor is it an effort to describe or evaluate the full range of public and private programs addressing the problem, which defy easy analysis.  They range from large-scale initiatives like the one described in Scaling Up, down to the most humble and immediate daily efforts of homeless missions and storefront churches throughout the city. They include a bewildering list of approaches that, variously, complement or compete with Proposition HHH and Measure H: emergency shelters, bridge housing, rapid-rehousing, safe camping areas, storage facilities, and mobile medical units. The energy and wealth committed by all parties involved would total several times $4.7 billion. Finally, nothing here calls into question the commitment or moral integrity of those working on this “wicked problem.” Anyone engaged in this effort deserves our utmost admiration.

But even as we lay out the caveats, we can begin to see the problem with the grand philanthropic endeavor described in Scaling Up.

Grandly simplifying complexity

First, no matter how sophisticated and multi-layered a theory of change is, it inevitably simplifies the problem, doing violence to the complexity of reality. But that simplification and focus of effort is at the heart of modern philanthropy. Ever since John D. Rockefeller pronounced the purpose of philanthropy to be getting at the “root causes” of problems—not just putting band-aids on them, as does mere charity—foundations have been searching for the social equivalent of the vaccine.  That is, they’ve been trying to find a relatively simple and cost-effective way to cut through all the confusing presentations of a large and messy social problem, go to its root cause, and solve it once and for all—just as vaccines, once administered, make expensive treatment unnecessary and prevent countless medical complications.

The housing-first approach fits the root-causes mold. Rather than dealing again and again with the same small portion of particularly hard cases of chronically homeless individuals, the theory goes, put them into housing immediately, and surround them with the social services they require to stay there. This population consumes such a large portion of traditional homeless services that permanent supportive housing will actually save money in the long run. And it will remove from the streets the population that the public regards as most threatening, individuals suffering from mental illness and drug addiction.

Housing-first advocates will argue that this is a simplistic account of the theory and that no one ever suggested permanent supportive housing is all that’s required, given the multifold reasons for homelessness. But in 2010, when L.A.’s United Way began assembling the vast coalition of public and private partners behind its Home for Good “action plan,” its oft-stated central premise was that one-quarter of the homeless population consumed three-quarters of the services, and that permanent supportive housing would drastically change that. The plan promised that just by “coordinating our existing resources, we can eliminate homelessness in Los Angeles” and by “acting rationally and efficiently, we can ultimately spend far less than we do now”—classic “root-cause” language. Bringing sustained coordination to a substantial coalition of diverse funders and service providers may indeed demand a focused, coherent theory. But that necessarily simplifies, emphasizing some parts of the problem to the detriment of others.

This points to a second difficulty with the grand strategic approach of the Home for Good coalition. Among professionals, of course, there are ongoing, nuanced conversations about the complexity of homelessness, and how permanent supportive housing is just one piece of the puzzle. But once it became clear that indeed it would not be possible to solve homelessness by a rational redistribution of available resources, as Home for Good had promised, and that massive additional public spending would be required, housing first necessarily went from being a sophisticated social-science theory to a simplified campaign slogan. The assumptions, causal arrows, corollaries, and qualifications scrawled across endless conference-room whiteboards suddenly had to fit … on a bumper strip.

In the push for Proposition HHH and Measure H, with $4.7 billion at stake, there wasn’t much room for complexity and nuance, as there never is in any political campaign. Voters in Los Angeles can be forgiven for thinking (because they were told) that if they voted that much money for homeless initiatives, there would be a significant abatement in the problem of homelessness.

Spectacular claims and high expectations, and many assumptions undermined by reality

That points to the next problem of root-cause solutions backed by significant public-policy investments. Sooner or later, they do indeed have to deliver, and given the spectacular claims for them, in a spectacular way. With homelessness, the evidence of success or failure would be distributed throughout the neighborhoods where everyday Angelenos live and work. 

The rise in the 2019 homeless count really surprised no one, because it had already become vividly apparent everywhere. Even before the release of the figures, homeless advocates had begun to fret about the apparent failure of the two funding propositions to deliver. This past May, Ruth Schwartz of the Shelter Partnership described the city as being at a “critical juncture.” As she commented to LAist, “Because we passed those measures, we have to prove something.  If the numbers don’t take a downward spin [in June], then it puts everything into question. … There are so many people in so many places where you used to not see them.”

Supporters of “those measures”—including Mayor Eric Garcetti—argued that, in fact, they hadn’t really been given a chance yet. All the money under Proposition HHH had been awarded, and it was only to fair to begin measuring results starting right about now, and extending over the next fiscal year. But as we noted at the end of Part 2, troubling developments about the premises of the measures had begun to appear in the news. This points to yet another problem of root-cause public policy.  It depends ultimately on the accuracy of its economic and social-science assumptions. Once a key assumption is undermined, the rest of the theoretical superstructure is imperiled.

In the case of housing first, as we’ve noted, the critical assumption had long been that only a quarter of the homeless suffer from mental illness or drug addiction, requiring the intensive services of permanent supportive housing. But taking another look at the 2019 data, the Los Angeles Times concluded that the figure was closer to 67%—a total whose needs would be far more difficult and expensive to meet. 

At the same time, cost estimates for building the housing necessary soared, with the average price per unit now amounting to well over a half-million dollars—more than the median price of a market-rate condo in Los Angeles. The voters once behind the homeless measures may not have needed to be told that the official percentage of addicted and mentally ill had been woefully understated. But it surely came as a shock to learn that their bond and tax dollars were going to pay for housing homeless individuals in apartments that they themselves couldn’t afford.

Some of the delay in building Proposition HHH housing, as well as constructing other kinds of temporary shelter, came from the resistance of neighborhoods where it was proposed to put the units. This NIMBY phenomenon is, of course, nothing new. But it represents yet another problem with the sorts of initiatives described in Scaling Up.  

Grand, philanthropically backed social-science theories of change often come to grief because, sooner or later, they demand significant change in communities and institutions wherein everyday citizens are simply trying to carve out their lives. The classic instance of this was McGeorge Bundy’s willingness in 1967 to put the full weight of the Ford Foundation behind the theory of school decentralization, which experts assured us would empower minority parents and improve educational outcomes. The resulting turmoil between neighborhood activists and the teachers’ union in the experimental Ocean Hill-Brownsville district is said to have been one of the low points in New York City’s civic life.

McGeorge Bundy (Wikimedia Commons)

Distress with the civic disorder exemplified by the growing homeless encampments is giving rise to sentiments and proposals well outside the range considered respectable by the housing first community. As we noted in Part 2, there is a new willingness to consider stricter law-enforcement options like forbidding street sleeping in certain zones. Homeless advocate Ted Hayes remarked to Curbed Los Angeles in April that “if we don’t get a hold of this soon, the same people who voted for all that money to go toward fixing homelessness are going to pass a new ballot measure that calls for the forcible removal of people off the streets.” 

The courts would make that difficult, given the dim view they’ve taken of civic order measures recently. But it’s worth remembering that back in the ’90s, even the most-progressive cities in California did indeed pursue more-stringent efforts to control civic disorder, as the “broken windows” approach to law enforcement gained favor—and as it successfully restored order on streets that had become unusable during the ’80s.

Anger and pushback

One element in civic life that was less evident in the ’90s is the level of anger, almost fury, activists display toward efforts to secure the order of streets and neighborhoods. As we saw in Part 2, for instance, when Los Angeles City Councilman Mitch O’Farrell mentioned that students in his district feared walking by a homeless encampment on their way to high school, activists brought the council meeting to a halt, “yelling and eventually chanting ‘shame on you!’”

A quick glance through the websites and Twitter accounts of homeless advocates will reveal a flood of such invective, with any attempt to enforce order on the streets denounced as further manifestation of America’s fundamentally racist, genocidal settler colonialism.

That doesn’t persuade anyone, but it does drive “unacceptable” opinions out of the public forum and into the back channels of social media. There, the reaction against homelessness is on full display. On Twitter and Facebook, sites and pages like “Fight Back Venice” feature a steady stream of videos and first-hand accounts of the homeless problem, without the filter imposed by political correctness. 

A disgruntled small-business owner recently posted a video of himself sprinkling sand on, and then shoveling up, the deposit of human waste left overnight in his doorway—the way he starts his typical day, he said. Comments overwhelmingly agreed that this situation was far from isolated in Venice and surrounding communities.

Just this week, even The New York Times brought its decidedly “front-channel” attention to the backlash against homelessness in the whole state of California. “I think those of us in the service-provider community always knew we weren’t going to solve the problem,” John Maceri of the People Concern social-service agency in L.A. told the Times.

But I think the expectation was we were going to make a significant dent. So on the one hand, the message is we have all these resources to quote-unquote solve this problem. And what the general public sees is, it’s not getting solved, it’s not getting better, it’s getting worse.

Frustrated critics of the current homeless agenda point out that it’s never the wealthy who suffer from the resulting street disorder, but rather small businessmen and low-income residents, for whom the public spaces in their communities are particularly important, yet now increasingly unusable.

When civic pushback mounts against grandiose social experiments, is it wise to dismiss the discontent as merely the reactionary response of narrow-minded, unenlightened bigots? This points to a final observation about the problem of philanthropy’s approach to homelessness in Los Angeles. In what can seem to be its elitist framing, arid social-science theorizing, lethargic pace, excessive costliness, and apparent disdain for civic objection to its intrusions into established local communities, “housing first” begins to look like just another massive, bloated, wasteful, bureaucratic project, criticism of which is too casually dismissed as the racist, rearguard action of a “basket of deplorables.”

As if sensing the possibility for tapping into this building resentment against establishment homelessness policies, President Donald Trump flew to California this past summer, threatening to bring federal intervention to bear if local leaders refused to deal with the increasingly urgent homelessness problem. “Like many Americans,” White House spokesman Judd Deere commented, “the president has taken notice of the homelessness crisis, particularly in cities and states where the liberal policies of overregulation, excessive taxation and poor public service delivery are combining to dramatically increase poverty and public health risks.” Or, as quoted by Brenda Richardson in Forbes magazine, Trump observed on the flight out that homeless people are clogging “our best highways, our best streets, our best entrances to buildings.”

This left homelessness experts sputtering with outrage, of course, since it offended every last rule of polite discourse about the problem. But with his almost reptilian political instincts, Trump clearly detects exploitable electoral possibilities brewing within the issue of homelessness. 

His tried and true technique goes like this: refuse to speak the delicate, anodyne professional language of the experts who seem to prefer their theories over reality; give plainspoken, even crude, voice to the growing civic resentment aroused by visible and olfactory evidence that the theories are not working; provoke the theorists into the most-patronizing, intemperate, and politically obtuse characterization of their critics; and reap the political rewards. This is the way, in Trumpian political strategy, to drive a wedge between the detached, wealthy, enlightened coastal progressives living in their gated communities, and the small businessmen and blue-collar workers who bear the daily burden of homeless encampments.

In a state where the Republican Party is moribund, this of course isn’t likely to pay off in a narrowly partisan sense. But Trumpian strategy was never about augmenting the strength of the old Republican elites, whom he dispatched easily in the presidential primaries of 2016. 

He’s engaged, rather, in developing a new political alignment, along the lines suggested by Joel Kotkin’s insightful work, which points to the growing divide between wealthy progressives and more-traditional, middle-class liberals. It’s difficult to conceive a political issue that lends itself more readily to the exploitation of that divide than homelessness.

Progressives meet pessimism in political arena

Even if Trump himself doesn’t mine partisan advantage from homelessness, other local politicians will, sooner or later. Progressives, for instance, had every hope of capturing the lone city council seat held by Republicans this past August, given dwindling GOP numbers in the district covering the northwest San Fernando Valley. 

“The hottest issue” in the race “was homelessness,” reported the Los Angeles Times, even though there were fewer homeless individuals in that district than anywhere else. Progressives backed Loraine Lundquist, a university professor who, according to the Los Angeles Daily News, planned to make the district “a hub for homeless service providers” by taking full advantage of Proposition HHH and Measure H funds.

Her opponent John Lee struck back, questioning the skyrocketing costs of HHH housing, and observing that “everyone is talking about the homelessness. But do you see any improvement?” He added, “we need to get them from our neighborhoods and not in front of our businesses.”

While Lundquist was backed heavily by a local hedge-fund manager and the county Democratic Party, Lee enjoyed support from small businessmen as well as the unions representing workers at the Department of Water and Power and Los Angeles police officers. Lee won, becoming the second Korean-American to win a seat on the city council.

To explain her candidate’s defeat, Lundquist’s campaign adviser immediately dipped into “basket-of-deplorables” rhetoric: “campaigns that appeal to baser instincts and fear are still somewhat effective,” she maintained. But the Lundquist/Lee race illustrates the way the issue of homelessness readily sets up a contest between seemingly enlightened, wealthy progressive elites and those they dismiss as retrograde, working-class voters, whose concerns can only be explained by “baser instincts.” 

Drawing on a new survey by the Public Policy Institute of California, Los Angeles Times journalist George Skelton recently observed that, in spite of a booming, peacetime economy, Californians were surprisingly pessimistic about the state of public affairs. Fifty-four percent of respondents chose “wrong direction” when asked the classic question about which way the state was headed. 

For the first time ever, Skelton adds, the issue of homelessness appears in double-digits as the most-important issue facing California, at 16%, ahead of jobs and the economy at 13%. He quotes Republican political consultant Richard Temple, whose focus groups “make these kinds of comments about homelessness: ‘I don’t feel safe. I can’t wear my rings; I keep my stuff in my front pockets.’ ‘I can’t walk around in sandals on the streets anymore because of the disease.’”

For “enlightened” elites, including in philanthropy, back to reality

But these kinds of concerns are resolutely ignored in public-policy analyses of philanthropy’s engagement with homelessness. The lessons for philanthropy outlined at the end of Scaling Up focus entirely on tactical and procedural considerations, culminating in the need for foundations to “take a more active role in policymaking at all stages of the process—from helping to frame the ballot measures to working to get them passed.” Although “not necessarily comfortable” with it, philanthropy has wisely decided to “go ‘all in’ for greater impact.” 

Scaling Up’s sunny narrative of Home For Good’s history builds steadily from early scattered efforts to address homelessness to the full mobilization of private and public resources behind a coherent theory of change, lavishly funded by tax and bond measures for which foundations campaigned vigorously and successfully. All that’s left, in this cheery account, is to oversee the measures’ execution.

Nothing in Scaling Up hints at the mounting complications described in Parts 2 and 3. But as we’ve seen, with the very best of intentions, surrounded by self-confident experts, and sitting on vast piles of wealth, it may very well be that the foundations aren’t in fact solving the problem of homelessness. Instead, by resolutely sticking to a homelessness agenda even as everyday citizens have begun to experience it as a manifest failure—but which they are forbidden to criticize—philanthropy may be contributing to one of the deepest and most-volatile political divides of our time, pitting “enlightened” wealthy elites against those they consider deplorables.

Perhaps foundations should not, in fact, become too comfortable with Scaling Up’s “all-in” political engagement, not only because they’re constrained legally, but more profoundly, because they’re very bad at it. No matter how many political consultants they hire, they still understand themselves to be pursuing morally impeccable, social-science based humanitarian goals in a messy and sinful world. Philanthropy experts have told them for decades that their institutional insulation from everyday, real-world economic and political influences leaves them uniquely equipped to grasp and pursue the undiluted, long-term public interest. Adaptation to political reality is readily construed as surrender to the very social injustice they’re pledged to combat. Philanthropy’s rigid, moralistic mindset simply doesn’t accommodate itself well to the flexibility and democratic responsiveness necessary to recruit and sustain widespread public support.

The literature of philanthropy is full of optimistic exhortations to foundations to throw themselves head-long into political activism, providing checklists of winning techniques derived from selectively edited accounts of successes. But very few narratives deal comprehensively and realistically with the often-unhappy consequences ensuing from the collision of philanthropic theory with everyday civic reality. Pursuit of abstract, expert-driven policy goals in the face of mounting public skepticism has already triggered a populist reaction against some of our most-important national institutions. The foundations of Los Angeles may be setting themselves up for the same sort of reaction, as they plow ahead with their homelessness agenda, certain that they’re right.