California’s homeless service nonprofits have a problem: They aren’t getting paid on time, and it’s making it even harder for them to get people off the street.

California’s homeless service nonprofits that provide everything from shelter beds, to counseling for homeless residents, to affordable housing, say they regularly are kept waiting weeks, if not months, for the city, county and state funding they rely on. That means they’re struggling to pay their employees, make rent payments for their clients, and, in some cases, even keep the lights on. Some are turning down new projects despite the massive need for services in their communities. Other California homeless service nonprofits are borrowing to stay afloat, ending up paying tens of thousands of dollars each month in interest — money they would rather spend on helping homeless Californians. It’s hampering the state’s efforts to solve what is arguably its biggest problem: Nearly 186,000 people have nowhere to call home.

“It is the single biggest factor in our inability to grow and serve more people,” said Vivian Wan, CEO of Abode Services, which provides shelter, housing and other aid for unhoused people across seven Bay Area counties. “This is a huge issue.”

And it’s getting harder to ignore. With inflation driving up expenses and the growing homelessness crisis driving up need, some of California’s homeless service nonprofits have reached their breaking point. After a group of Los Angeles-based homeless service providers raised the alarm earlier this year, the county Board of Supervisors overhauled the way it doles out funds. Providers hope the move will be replicated throughout the state.

Why Are California’s Homeless Service Nonprofits Missing Millions of Dollars?

It’s the kind of problem that’s a hallmark of bureaucracy.

When a city opens a new shelter or housing program, it lacks the capacity to run the program itself, so it contracts with a nonprofit that has expertise working with unhoused clients. California’s homeless service nonprofits who provide these services told CalMatters that because city officials are trying to move quickly, they sometimes set up the program and start providing services immediately — even before a formal contract is signed. The nonprofit can’t get reimbursed for the services it’s already provided until that contract is finalized, which can take months.

Read the full article about California's homelessness service providers by Marisa Kendall at CalMatters.