A Guide to Grants for Homeless Shelters

The homelessness crisis in the United States continues to progress, with no signs of slowing down. States like California, Oregon, and Vermont are experiencing the highest growth rates of homelessness, but the phenomenon is happening across the entire country. 

Seniors, veterans, and the youth are all experiencing elevated rates of homelessness as housing becomes more unaffordable in the current economic environment. Race also plays a huge factor in homelessness, with the Asian-American population experiencing a higher rate of homelessness compared to other demographics. 

In 2022/2023, Asian American communities experienced a 40% increase in homelessness. This rate of increase in unhoused individuals isn't unique to Asian Americans; it’s happening across the entire population.

According to estimates by The National Conference of State Legislatures, over 40,000 Youth aged 13 to 25 are unhoused and sleeping on the streets every night. Many homeless individuals rely on vouchers, rental assistance, public housing programs, and emergency shelters to help them stay off the streets.

Fortunately, several private and public organizations provide several layers of support to unhoused individuals and families in America. Over 11,000 organizations across the United States offer shelter and community housing services.

However, the rate of growth in these organizations is slow, at around 1% per year. Considering the expansion of the crisis since the start of the pandemic and the end of rent protection, we can expect the crisis to pick up pace in the coming years.

The influx of illegal immigrants at the southern border also adds fuel to the problem. Incidences of homelessness increased by 20% between 2020/2021. Adding to the problem is the deterioration in the US economic outlook. Elevated inflation in the housing market means many people are simply priced out of finding a place to rent.

Cities like New York, Los Angeles, San Francisco, Austin, and Las Vegas have astronomical rental prices, forcing many people into homelessness. With average rents for a one bedroom apartment in these cities varying between $2,500 to $3,000 per month, many people are turning to alternative housing, like living in an RV.

For some, the unaffordable housing market pushes them into tents on the sidewalk. The pace of homelessness is increasing. 2023s figure was 12% higher than 2022, with an estimated  653,104 homeless individuals spread across the country. 

Local governments and nonprofits aim to increase funding for community-based efforts to end the crisis and support social services. However, the bulk of funding comes from the federal government. 

Homeless shelters are struggling amidst the declining economic backdrop. It’s forcing them to look for alternative funding strategies to continue operations as demand increases. 

In this guide, we’ll look at how homeless shelters can access grants to help their operations and serve more people.

Types of Grants Available for Homeless Shelters

Homeless shelters aren’t alone in their quest to help the unhoused. There are several avenues for them to seek the funding they need to maintain and grow operations. By leveraging grant programs, they get the support they need to assist those in need. Let’s unpack the three ways homeless shelters can apply for grants.

Federal and State Grants

The federal government is the biggest sponsor of grants for homeless shelters and programs across the United States. However, the government doesn’t award grants directly to shelters. 

Instead, it distributes the funding to local and state Housing and Urban Development (HUD) or Health and Human Services (HHS) offices that assist organizations with applying for a grant for their shelters.

Organizations can search online for available Emergency Solutions Grants (ESGs) in their metropolitan areas or statewide. The HUD and HHS earmark grants for homeless shelters to bolster the organization's capacity to help those in need. 

Each local government and state can award grant funding to organizations as they see fit. Therefore, ESGs may go by different names when researching these programs. 

For example, The Unified Homelessness Grant Program is responsible for issuing grants through Florida’s Department of Children and Families.

Private and Community Foundation Grants

Community support and philanthropy play a significant role in offering funding for homeless shelters across the country. If a shelter can’t get enough funding from state or federal grants, they have the option of turning to the private sector for support. 

Grants are available from family, community, and private foundations. However, these foundations may not offer a suitable application and approval process for all homeless shelters. Organizations should review the past contributions of foundations to see if they’re the right fit for their funding request. 

Many private foundations issue grants in line with their mission. The shelter should consider if their work benefits the mission of the funding foundation before applying for a grant. 

Sourcing grants from private foundations require the use of software tools like GrantWatch or GrantStation to research relevant grant offerings. Some foundations serve local communities, while others operate nationally. Select the foundation that aligns with your goals.

Corporate Grants

Many large corporations provide grant initiatives for homeless shelters. These organizations build these programs to bolster support for the local community as part of their Corporate and Social Initiatives (CSI).

These companies receive tax breaks for launching and pushing these initiatives. Since homelessness is a severe social issue in many states, many corporations offer grant programs for homeless shelters. 

Research businesses in your local area and see if they offer grant programs. Look for corporations offering general funding programs for a range of CSI initiatives. These companies are ideal for requesting grant support programs. 

These companies are willing to help nonprofits like homeless shelters improve living conditions in the local community. It’s a win/win. The homeless shelter gets the funding, and the corporation gets a tax break. 

Identifying Grant Opportunities

Management teams at homeless shelters must take a meticulous approach to researching grant opportunities in local and national markets. Strategic planning and networking will help organizations find the funding opportunities they need. 

Shelters must have a clear understanding of their needs before seeking out grant opportunities. It’s important to identify the right opportunities and collaborate with other organizations and nonprofits for tailored ESGs.

Taking this approach increases the shelter's chances of securing the funding they need to continue their work. 

Understanding the Shelter's Needs

It’s crucial for management and stakeholders to assess the shelter's funding requirements and financial needs before reaching out to grant opportunities. 

It’s critical to determine the services they offer to the community and the demographic they serve. Look for gaps in service offerings and resources, and look for grants that assist these needs. 

Research Grant Platforms & Databases

Grant funding platforms like Foundation Directory Online, Grants.gov, and Candid.org list grants available for homeless shelters. Search local or federal websites for grant portals and look for those that align with your mission and funding requirements. 

Attend Workshops and Networking Events

There are dozens of local and national seniors, workshops, webinars, and conferences offering networking opportunities for homeless shelters to source the grants they need.

Attending these initiatives provides fresh insight into the funding opportunities available in the private and public sectors. Connect with prospective funding partners and learn about the application processes for different grant types and applications.

Many existing shelters and community organizations offer joint grant applications that make the grant proposal more attractive to funding partners. 

Note the Grant Guidelines & Eligibility Criteria

After shelters identify the grant opportunity that aligns with their mission and goals, the next stage is to review the application. Read the eligibility guidelines and instructions for applying for the grant. The shelter must meet all eligibility requirements for the grant, or they risk rejection.

A dismissal of a grant application means wasted time and resources. So, it’s critical to ensure the homeless shelter's directives, mission, and organizational structure comply with the grant requirements before allocating resources to the application process. 

Tailor the grant application to the objectives and stipulations of the funding partner. It’s crucial to include the shelter’s programs and mission and ensure they align with the funding organization's priorities. 

The grant market is continually evolving. Monitor the industry and stay on top of policy changes, funding trends, and emerging social issues. The shelter management must remain flexible and adaptable to sourcing new grant opportunities.

Eligibility Criteria for Homeless Shelter Grants

The eligibility criteria for homeless shelter grants differ depending on the funding organization. Understanding these requirements will help the organization receive a smooth path to securing the funding they need. 

Aligning with the funding organizations' specific proposal requirements increases the chances of grant approval. Here are the general criteria funding partners are looking for in potential partner organizations.

Nonprofit Status

Homeless shelters are nonprofit organizations registered under 501(c)(3) status with the IRS. This designation allows for tax-free operations, ensuring the funding goes to the homeless shelter, without any taxation deductions. 

Specific Focus Area

There are several types of grants available for homeless shelters at the state and federal level, and with the private sector. Many grants offer specific funding for transitional housing, emergency shelter, healthcare, supportive services, skills training, mental health support, or treatment for substance abuse. 

Your grant application must be specific to these directives and prove operations and the shelter's need for funding. The application must show how the grant will specifically benefit the organization's goals and mission and how it intertwines with the funding parties' eligibility requirements.

Geographic Location & Target Population

Some funding partners earmark grants for homeless shelters operating in specific geographical boundaries such as cities, counties, sattes, or regions. The management team must consider this requirement before allocating resources to the grant application. 

Some grant programs cater to specific demographics in the homeless population. There are grant programs for veterans, families, youth, and individuals experiencing homelessness, or those experiencing mental health challenges. 

The management team must ensure that their application meets these demographic criteria, or they risk denial of their application for funding. 

Experience & Capacity

Funding organizations will assess the shelter's track record when completing due diligence on the grant application. Those shelters with proven track records of financial stability and effective service to the community have the highest chance of being approved for a grant.

The shelter's track record outlines its commitment to its mission and the experience of the team. It also demonstrates the shelter's capacity and performance through measurable outcomes. 

Regulatory Compliance 

Every government grant issuing body, whether federal or local, requires the shelter to be compliant with regulations governing the operation of homeless shelters.

These compliance and regulatory requirements include financial transparency, fair and equitable employment practices, health and safety standards, and non-discrimination policies.

Financial Stability

The funding partner will assess the financial stability of the shelter before approving the grant. Local, state, and federal funding grant programs are less stringent in their financial criteria than corporations and private foundations.

The granting foundation will consider the financial health of the shelter. They don't want to invest in a lost cause that's hemorrhaging money and is on the verge of collapse. 

So, it’s crucial for the shelter management team to ensure they have strong, transparent financial management and accounting practices. The organization must have a sustainable funding plan to demonstrate the ability of the shelter to effectively utilize the grant.

Writing Effective Grant Proposals

Homeless shelters must apply for grants from private and public entities using a proposal. This application presents the shelter's case for funding and demonstrates the impact of the funding on the community and the shelter's mission and goals. 

By researching the funding partners' mission and goals to ensure proper alignment, shelters increase their chances of the partner awarding the funds. A successful application and proposal require the homeless shelter to showcase its programs and the impact they have on the community. The proposal must tie in their need for funding with these issues.

The proposal must include the following points.

Executive Summary

This summary is a concise section discussing the homeless shelter's objectives, area of operation, and its impact on the target demographic. The summary must include the organization's mission and how it aligns with the funding partners' objectives. 

Introduction & Background

The introduction to the homeless shelter and its operations should feature its history and role in the community. Include prior achievements and testimonials that back up the claims made in the executive summary. Provide information on the shelter's programs and gaps in funding that the grant will solve.

Statement of Need

What are the primary needs for funding? The shelter must clearly outline the challenges faced in its operations and in serving the local homeless community. Include case studies, statistics ad local data to support the case for grant funding. 

Program Description

Outline the services and programs available through the shelter and how they impact the community. Include a description of how the grant will bolster operations and how that directly influences the quality of the services and programs offered. Note the success of the current programs offered at the shelter. 

Goals, Objectives, & Implementation Plan

The proposal must include SMART goals (Specific, Measurable, Achievable, Relevant, and Time-bound. Go into detail with each goal and how access to the grant will help the shelter achieve these directives. Outline the execution and prospective results of all projects requiring grant funding.

Detail how the shelter will allocate and use the grant in a step-by-step plan that includes the strategy, milestones, timelines, and activities involved in the implementation of the project. 

Budget, Justification, Evaluation & Management

The proposal must include a budget itemizing the expenses involved in bringing the program to fruition. Include the expenses for personnel, equipment, supplies, and other relevant costs. Justify these expenses by tying them to the project goals. 

Outline how the organization intends to measure the impact and success of the project. Include metrics, evaluation methods,  and tools used to assess the efficacy of the program and how they align with the funding parties' mission, goals, and objectives.

Sustainability & Future Planning

This section must demonstrate the ability to sustain the project after the grant period lapses. Include a long-term sustainability plan, community support, and the diversification of funding sources.

Conclusion & Call to Action

Wrap up with the key points raised in the proposal and emphasize the importance of the project and how the grant will make it a reality. Include the impact it will make on the community and encourage the grantor to make a difference by addressing homelessness through their grant.

Supporting Documents

The final section should include any supporting documents like the IRS determination letter showing nonprofit status. Include the shelter's organizational structure and board of directors, financial statements, letters of support, and program brochures.

Budget Planning and Financial Management

Grant issuance relies heavily on the shelter's financial health and stability. The shelter must display proper financial management and budget planning if it hopes to secure the funding it needs. 

Effective financial management and budgeting are integral to the successful operation and sustainability of the shelter. Grant issuers won't invest in shelters that can't prove a track record of financial stability. 

If the shelter can show a sustainable track record, it encourages the funding party to issue the grant because it shows continuity, even without the grant. 

Prudent planning and financial transparency are essential for achieving financial stability and fulfilling the shelter's role in the community. The shelter must showcase prudent planning, strategic decision-making, and effective allocation of resources, with transparent accounting practices.

Let’s unpack each of these criteria in detail. 

Budget Planning

Budgeting is crucial to ensure the correct allocation of grant funds. The budget must account for every penny of the grant and clearly indicate how the shelter intends to use the funds in its operations. 

Income Sources

The shelter must identify funding sources such as government grants, private donors, corporate sponsors, community support, and fundraising events. Create forecasts on expected income and consider consistent contributions from these sources, and one-off grants or donations. 

Expense Categories

Categorize the expenses of the shelter into the following categories.

• Personnel (staff salaries and benefits).
• Facility maintenance.
• Utilities (water and power).
• Food and medical supplies.
• Case management.
• Outreach programs.
• Administrative costs.
• Contingency funds.

Prioritize the shelter's essential operational expenses and consider including flexible figures to accommodate unforeseen events and needs.

Financial Management & Transparent Accounting

The shelter must maintain accurate reporting of financial records. The grant application will require the financials of the shelter to assess the viability of its investment in the organization. Document all expenses and income and implement accounting software to streamline financial compliance and reporting.

Internal Controls & Board Oversight

The shelter must have internal controls in place to prevent financial fraud or mismanagement. Create protocols for approving and managing expenses, conducting financial transactions, and handling cash donations. 

The board of directors must engage in financial oversight of the grant. These key decision-makers must understand and actively participate in all financial decision-making processes and host periodical reviews and presentations.

Compliance

The shelter management must ensure compliance with all grant requirements. It must include proper reporting and adherence to grant guidelines.

Building Partnerships & Collaborations

Homeless shelters don’t have to go it alone. Creating and nurturing collaborations and partnerships with other industry players is critical for homeless shelters looking to secure a grant.

These connections give the organization more reach and a better chance of fulfilling its mission and goals. Collaboration and partnerships also open further grant opportunities that would otherwise be unavailable for homeless shelters acting independently. 

Here’s what homeless shelters can expect from including partnerships and collaborations in their strategy.

Expanded Resources

Collaborating or partnering with other community organizations, nonprofits, shelters, government agencies, or community organizations can bring additional resources, expertise, and services to the shelter.

Enhanced Impact

Partnering or collaborating with these entities allows the shelter to address a broader range of needs in the local unhoused community. It bolsters the support service offering of the shelter, increasing its impact in the community. 

Credibility and Trust

Partnering or collaborating with other organizations adds to the reputation and credibility of the shelter, increasing interest in grant funding from qualifying parties. 

Building Strong Partnerships

Finding the right partner can change the opinion of grant prospects, giving shelters access to other funding sources that might otherwise deny a solo application. Here’s how to build strong relationships with local, state, and national partners. 

Shared Vision & Goals

The prospective partner should share the same mission, vision, and goals as the shelter. When assessing a partner, clearly communicate objectives and expected outcomes from the collaboration.

Mutual Benefit & Open Communication

The collaboration should benefit both partners and highlight the advantages and impact of the collaboration. The partners must establish clear lines of communication and full transparency in the sharing or resources and all decision-making processes. 

A Guide to Grants for Homeless Shelters - FAQ

Q: What grants encourage rehousing of homeless individuals and families?

A: The federal government issues the “Emergency Solutions Grant” (ESG) program and the “Continuum of Care” (CoC) program to fund the homeless shelters in each community throughout the United States. Most homeless shelters access ESGs to fund street outreach programs, diversion and prevention strategies, rapid rehousing, and emergency shelter programs.

Q: What is the US government doing to solve the homeless crisis? 

A: The US Federal Government utilizes its “HUD” agency as a conduit for addressing the homeless crisis in the country. This organization offers grants to homeless shelters, transitional, and permanent housing. In disaster situations, such as hurricanes, where people become homeless overnight, the organization provides housing solutions for affected communities. HUD also provides funding to shelters that keep vulnerable people off the street.

The United States Interagency Council on Homelessness (USICH) is another federal agency tasked with the mission of ending the homeless crisis in America. It collaborates with 19 federal departments and agencies, partnering with public and private sector entities. USICH aims to streamline federal spending on the homeless crisis, working with industry partners to achieve its directives. 

Q: What is the annual spending by the US Federal Government on solving the homeless crisis? 

A: Every year, HUD has a budget of approximately $2.8 billion to allocate to homeless shelters and other entities involved in resolving the homeless crisis in America. While this figure might sound huge, it pales in comparison to the $750 billion military budget for national security. 

According to the Department of Housing and Urban Development, ending the crisis would take approximately $20 billion. The country's billionaires could end the homelessness problem overnight without denting their fortunes. 

Q: How many homeless shelters operate in America?

A: As of 2023, the United States has approximately 11,379 community housing and homeless shelters. That's a year-over-year increase of 1.8% and a sign of hope for homeless communities across the country.

Q: What is the root cause of the homeless crisis in the US?

A: The homeless crisis continues to rampage across America. Rates of homelessness increased by 6% year-on-year since 2017. Since the onset of the pandemic and the end of rent protections, we’ve seen a surge in inflation that's a catalyst for increasing this figure. 

Some of the contributing factors to the surge in homelessness across the country include poverty and unemployment. However, the primary driver of the crisis is the lack of affordable housing available in major urban centers across America.

In Closing

The homeless crisis in the United States shows no signs of slowing down. FOMC statements from the Federal Reserve point to a more positive outlook for the economy in 2024, with the prospect of rate cuts coming as soon as March 2024.

Rate cuts will drop the 30-year mortgage rate, which makes housing more affordable. However, people living on the street or those close to landing themselves in this position won't experience the benefit of this policy shift.

These individuals rely on a flow of funding to homeless shelters to give them the services and housing they need to survive and get back on their feet. However, funding levels are low despite the federal government allocating over $2 billion to end the crisis. 

It’s unclear if this grant funding will increase at the same pace as the evolving crisis. So, homeless shelters need to do everything they can to ensure they get the funding they need. There are several strategies to help shelters get a grant, and PayBee offers a unique platform to help these nonprofits achieve their mission and goals. 

Grants help shelters achieve their goals and add value to local communities across the country. These organizations are at the frontline of the crisis, and without them, it would be a lot worse. 

Grants allow shelters to continue their operations and expand into new locations, helping millions of people along the way. Grants allow shelters to expand their operations, providing funding for volunteers and staff, and increasing their outreach into local communities affected by homelessness. 

Homeless shelters deserve the funding they so desperately need, and grants provide the vehicle to make that happen. This guide gives organizations the strategy they need to successfully qualify for private and public sector grants.