Turning Data Into Dollars

Insights from the 2017 National Conference on Ending Family & Youth Homelessness

Last month I had the opportunity to join over 1,000 nonprofit professionals at the 2017 National Conference on Ending Family & Youth Homelessness, hosted by the National Alliance to End Homelessness. A common theme heard throughout the sophisticated discussions in each panel and keynote speech was the use of “data.” While there were plenty of amazing insights on how to use data to determine areas of need and program strengths and weaknesses, the question remains: how do we use data to increase funding?

A recent article from the Center on Budget and Policy Priorities states, “President Trump’s proposed fiscal year 2018 budget for the Department of Housing and Urban Development (HUD) proposes deep cuts in every state in rental assistance for families and other aid for the nation’s poorest urban and rural communities, which would increase homelessness and other hardship across the country.” This decrease in federal funding means that, if an organization wants to survive, they will have to look for new sources of funding to keep their programs running. The solution is in using data not just to quantify daily actions, but to measure exactly how those actions are leading to lasting and impactful solutions. By using your data to create a strong case for investment, you can move beyond the “donor gift” mentality to attracting quality investors to your organization from both the private and public sector, creating a stronger funding mix and decreasing reliance on a single funding source.

Here at Convergent, we love to see nonprofits embracing the importance of tracking data and discussing the impact of their programs. Unfortunately, many organizations stop at “hash mark” data points. By this we mean, they’re recording the number of meals served, the number of bed nights provided versus the number requested, or the number of families receiving supportive services. Those are all outputs, and while that data can prove invaluable to measure areas of need, outputs don’t tell you which programs are most effective and impactful long-term, and that is what today’s funders want to know.

Moving from Outputs to Outcomes

Understanding the differences between your outputs and your outcomes is the first step in creating a strong case for funding support. Let’s say, for example, that your organization runs an emergency shelter. One of your outputs may be that 1000 bed nights per year are provided. That demonstrates a clear need, but not a very strong case for support.

What are the outcomes of you providing those 1000 bed nights? Examples may include, “100 program participants found permanent housing,” or, “program participants reported a total of 50 less ER visits over the previous year.” While this information is more difficult to keep up with than hash mark data, it’s an important first step in crafting a strong case for support and securing significantly more funding.

Outcomes versus Investable Outcomes

A study by the New England Journal of Medicine found that people experiencing homelessness are hospitalized up to four days longer than non-homeless people. A statistic many of us are probably already familiar with is that these extended hospitalizations cost taxpayers roughly $2,400 each time. In fact, a report regarding hospital admissions in Hawaii discovered that over 1,700 hospitalized homeless adults cost taxpayers $4 million in admission costs.

Let’s go back to our recent hypothetical where program participants reported a total of 50 less ER visits when access to emergency housing was available. Let’s say that each ER visit only lasted one day. At $2,400 a day, that’s a $120,000 annual savings to local hospitals! This is a perfect example of an investable outcome. By being able to draw a clear connection between the services you provide and the cost savings to the local community, you have demonstrated the value of your program to the hospital directly. Now, you can make the case to the hospital that by contributing $100,000 to help double your capacity, you will be able to save them $240,000 annually. Funding your organization is no longer about giving a philanthropic gift to a local charity, it is about making a smart investment that will help improve their bottom line.

As you can see, data can be used to determine a lot more than areas of need. When the right information is tracked, it can be used to prove that funding programs not only help get people off the streets, it can also lead to millions of dollars in savings to your community.

What does this mean for you?

HUD funding shifts to rapid rehousing and permanent supportive housing have left shelters and transitional housing programs looking for other sources of funding. Now, with additional cuts looming on the horizon, even more programs are under threat. In order to keep effective programs operating, the burden will be placed on the nonprofit organizations themselves to demonstrate to funders the value of investing in them.

Clearly, the fiscal urgency of finding a quantifiable solution to the homeless epidemic is crucial. And although nonprofit organizations are conducting sound research in identifying what programs are working and how many people they’re helping each year, we have to start using our data to make a very strong case for quality investments. The clearer the line that can be drawn between your outcomes and their value to the funder, the more investable those outcomes become and the more likely you are to secure the funding needed to support and even expand those programs.

Study after study has shown that programs that get people into long-term housing significantly improves their likelihood of no longer needing to be treated through taxpayer money and can actually save local government and other institutions millions of dollars in unreimbursed expenses. The services you provide helping many recovering homeless people, especially children, can lead to higher education, higher employment rates, and eventually new taxpayers introduced into the city’s economy. These are the investable outcomes that will sway funders to supporting specific programs.

Cities have amazing nonprofit organizations already doing great work, but if there’s no great investor or reason for investment that can be quantifiably tracked, then it’s not going to help in the long run. No matter how effective your programs are, if you can’t clearly communicate their value to funders, you won’t receive the financial support necessary to sustain them.

I’m truly glad data was the buzzword of the conference this year. When used effectively, it’s a powerful funding tool, leading to more investors and larger investments for the programs providing the greatest impact. Tracking investable outcome data, and no longer just outputs, is the single most important step we need to be taking if we’re going to see lasting results to the homeless epidemic in America.