photo by: Austin Hornbostel/Journal-World

The Lawrence Community Shelter, 3655 E. 25th St., is pictured Monday, July 24, 2023.

The Lawrence Community Shelter’s funds are well short of the roughly $1.6 million per year it needs to keep running, and the nonprofit hopes that being transparent about its financial situation will help generate more community support.

That was the message from LCS Interim Director Melanie Valdez about a week after asking for the community’s help to keep the shelter’s doors open. As the Journal-World reported, Valdez last week sent an “urgent appeal” to supporters asking for more money to sustain the shelter’s services and saying that it could face closure otherwise.

That message didn’t go into detail about exactly how large the funding gap for the shelter is today. And Valdez told the Journal-World in an interview on Monday that she didn’t have that figure available to share, but that she would be preparing a financial update to share with the shelter’s board of directors on Thursday. However, she was able to give the Journal-World a few more details on the shelter’s finances on Monday, and she said that, in short, there simply isn’t much money left to get through the rest of the year.

“We’re just barely getting by, and we have essentially run out our reserves,” Valdez said. “We don’t have access to pandemic funds any more and we don’t have grants that we have access to … There’s just not many places for us to turn at this point.”

Valdez gave the Journal-World a rough overview of the shelter’s typical operating budget, funding streams and overall challenges — and reiterated her commitment to helping reduce chronic homelessness throughout Douglas County.

City and county support

As a nonprofit, Valdez said the Lawrence Community Shelter’s monthly expenses can be anywhere from $112,000 to $187,000, depending on payroll. But the average monthly expense is about $140,000, she said, which means the shelter needs around $1.6 million per year to operate.

That money typically comes from a variety of sources. Probably the most prominent contributors are the City of Lawrence and Douglas County, both of which contribute $296,000 per year to the shelter; the city money is broken into two payments per year, and the county’s payments are scheduled quarterly.

“We can’t operate without their assistance,” Valdez said. “We are in a position that if either one of them pulled that general funding, we would not be sustainable at all. We’re very appreciative of that; we do everything we can to try to work well with them and be good partners, and we’ve made a lot of changes that we feel are very positive.”

The support from the city and county accounts for about a third of the shelter’s funding, Valdez said, though it seems to be a common misconception that the city and county fully fund the nonprofit. As the Journal-World reported, the Lawrence City Commission approved expediting its second payment to the shelter for the year last week, which frees up $148,000 more to work with sooner.

It’s been just a few months since the City of Lawrence and the shelter jointly coordinated expanding the shelter’s capacity from about 50 to roughly 125. The increase in people receiving services at the shelter is showing about four months later; Valdez told the Journal-World Tuesday morning the shelter had 26 people staying in its 24/7 continuous stay spots and another 60 that stayed in overnight spots Monday night.

“I would say we are averaging a total of 80 per day, but the numbers are rising slowly,” Valdez said Tuesday. “I am not sure if that is due to the hot weather or if people are just getting more comfortable with accessing services.”

Other sources of funding

Beyond the combined $592,000 from the city and county, Valdez said the shelter has access to a limited amount of grant money, which more often than not is facilitated by the city. Reimbursements to the shelter listed with the city’s claims often correspond to such grant payments, Valdez said.

But there are many constraints on how those dollars can be spent; one Community Development Block Grant awarded by the U.S. Department of Housing and Urban Development, for example, funds the roughly $50,000 salary for a case management position at the shelter, but it can’t be reallocated toward operations if there’s ever a need like there is now.

HUD’s Emergency Solutions Grant is just about the only grant award that can be applied directly to a homeless shelter’s operations, Valdez said. In large part, the relative lack of flexibility in how agencies like the LCS can use these grant funds is due to a shift away from addressing the needs of homeless people in emergency or transitional shelters in favor of helping people to quickly regain stability in permanent housing.

“We have nothing to go to operations,” Valdez said.

There’s a more substantial chunk of grant funding currently sitting idle that Valdez said is still up in the air, though — $446,184 from HUD’s Community Development Block Grant CARES Act program, which has provided grants to states and local governments to prevent, prepare for and respond to the spread of COVID-19.

Much like other grants the shelter has access to, this one has limited uses as well. It was originally awarded to be used for renovations but the regulations were too complex, Valdez said, and required a project manager with special expertise to follow through.

Valdez said the city agreed to an amendment switching the grant activities from renovations to public service, which could cover some past expenses. But that’s still a work in progress, she said. It could take months to identify exactly where the funds will go, write the amendment, be granted approval by the city and HUD and submit a reimbursement request. Even then, Valdez said she wasn’t sure exactly how much of the grant the shelter would be able to use for operations.

“So, at this point, I have no idea how much we will have access to and when, but I do know it will be at least a few months in the best case scenario,” Valdez said.

The final chunk of funding aid the shelter typically receives comes from donations; Valdez said the shelter typically budgets for around $140,000 from donors. In her message to supporters last week, Valdez also announced that the shelter’s annual chocolate and tea fundraiser is getting a revival after being discontinued during the pandemic, but that’s set to return in early November and thus doesn’t do much to help with the pressing need immediately.

Regardless, Valdez said the shelter’s leadership team knows that their fundraising ability is limited; there are so many other competing — yet necessary — needs from other community nonprofit agencies that also rely on donors to succeed.

Lacee Roe, the Director of Community Engagement for the shelter, added that stigma about homelessness also presents a challenge on that front. Roe said the shelter often has to contend with stereotypes like the perception that people who are homeless aren’t doing enough to help themselves, when the reality is that many of the people who stay at the shelter are elderly or have disabilities.

“It’s just such a complex crisis, and there are a lot of misunderstandings about it,” Roe said. “It’s also something that, when people are asking about some of those misconceptions, you can’t explain it really briefly in a Facebook comment. You have to have all that context.”

Setting a foundation

The shelter’s been in an adjustment period for the better part of the last year, partially as it reworks its budget so it doesn’t rely on pandemic aid. The shelter went from taking in roughly $2.3 million during the height of the pandemic, supplemented by a significant amount of restricted relief funding, to about $1.4 million from 2021 to 2022.

Making up that difference meant doing some work to cut middle management and upper administration positions and build up the shelter’s front-line staff instead, while increasing base wages for those workers to improve employee retention.

“But because of us giving up so much on the administrative side and us really having to do a lot and carry more of the burden, that’s the only reason that’s balanced out those expenses,” Valdez said. “But then if we had not increased capacity, we would’ve been able to run at probably closer to $1.3 million, somewhere in there … We wouldn’t have exhausted what small amount of reserves we had so quickly.”

Restricted grant funds and the depletion of pandemic-era aid dollars aren’t the only factors contributing to the shelter’s current financial situation — Valdez said she also thinks turnover at the shelter’s top leadership position has made it tough to build a good foundation. Valdez has been in the role for a little over a year herself, but she said there’s been a dozen full-fledged or interim executive directors since the shelter’s founder and longtime director, Loring Henderson, departed in 2014.

That’s included many former leaders who stayed for six months or less — some for only a single month. On top of that, Valdez said the shelter’s board of directors has both increased in size and also been through a near-complete turnover of its own in the past two years. That’s a lot of people starting fresh and trying to find what works, she said.

“Without having the stability that a lot of other agencies have, it takes a lot more work,” Valdez said. “And when new leadership comes in, to get that foundation under yourself (while) you are also fighting crises all the time that are the priority, establishing that foundation while you’re standing on it is hard.”

But Valdez said she and the rest of the shelter’s management team are especially interested in demonstrating they’re fully committed to sticking through challenges like this one and working toward a solution, all while doing their part to educate the community, “spread our mission and show that we are passionate about this.”

“We’re showing a lot of commitment,” Valdez said. “We want to see this place successful. We want the people here doing good work, hard work, we want that to be supported and recognized, that we’re doing good things.”

Folks interested in donating to the Lawrence Community Shelter can do so on the shelter’s website.