Nowhere in the United States is the extreme wealth divide as stark as it is in San Francisco. In 2017, the city was home to 74 billionaires—the third-highest number of any city in the world. That same year, San Francisco was also home to 6,858 people experiencing homelessness, more than half of whom were living outside.

Steep housing costs and competition among residents for the city’s limited supply of affordable homes are driving San Francisco’s homelessness challenges. Despite the city’s relatively large budget for homelessness services, the homelessness response system is designed to respond to crises and isn’t resourced to develop affordable housing at the scale needed. As a result, San Francisco couldn’t keep up with the increase in homelessness between 2007 and 2017. The city’s growing population of people living outside made the issue more visible, more political, and, to many, seemingly more intractable.

The causes of and solutions to homelessness often seem complex, as does the system addressing the problem. In an effort to make substantial progress toward ending homelessness in the city, Tipping Point Community, a private philanthropic funder in San Francisco, launched the $100 million Chronic Homelessness Initiative (CHI) in 2017. CHI aimed to cut chronic homelessness in half over five years, from 2,112 people to 1,056, in alignment with the city’s five-year strategic framework.

CHI—the largest private investment to address homelessness in San Francisco’s history—aimed to create more permanent supportive units; prevent people from becoming chronically homeless; and increase capacity, accountability, and transparency in the city’s broader homelessness response system. The initiative sought to prioritize people with the greatest needs by focusing on people experiencing chronic homelessness—defined as those who have a disability and have experienced long-term or repeated homelessness. This group accounted for nearly a third of the city’s overall homeless population in 2017.

Since CHI’s launch, the Urban Institute has evaluated the initiative to measure progress toward its high-level goals as well as the impacts of its specific programs. CHI officially ended in June 2022, but its final outcomes won’t be clear until the results of the US Department of Housing and Urban Development’s January 2023 point-in-time count. Despite the fact that San Francisco saw an 11 percent decline in chronic homelessness between 2019 and 2022, ongoing data tracking shows that CHI is unlikely to meet its goal of halving chronic homelessness by January 2023.

Even still, the initiative had important successes that highlight how private funders can help improve complex systems—from homelessness to behavioral health to the criminal legal system—by trying new strategies to figure out what can work in the long term, investing in the guidance of people with relevant lived experience, and sparking a sense of urgency in what can seem like an immovable system.

Piloting new strategies to figure out what works and set the stage for long-term change

San Francisco’s homelessness response system involves a range of players at all levels: local government agencies that provide most of the funding for housing and services, nonprofit providers that offer crucial services to people in need, and people experiencing homelessness who need supports. To make meaningful change in such a complex system, Tipping Point sought to use its position as a private funder to partner with all these stakeholders, fill in gaps, and push for systemwide change.

That effort involved partnering with the biggest player in the system: the local government. San Francisco—mainly through the city’s Department of Homelessness and Supportive Housing (HSH), but also through other city agencies—provides most of the funding for homelessness services in the city, including short- and long-term resources for shelters, permanent housing, and wraparound supports.

Innovation is crucial to improving a system, especially one with such life-saving importance as homelessness response. But “the government isn’t designed to innovate,” said Chris Block, former director of CHI between 2019 and 2021 and current manager-rehousing for the City and County of San Francisco. It’s designed, he noted, to provide stable, long-term resources for people in need. Here, philanthropy can play a key role by using its flexible resources to drive innovation, investing in ways the government can’t, and piloting strategies in the short term that the city can later adopt and assume responsibility for in the long term.

“There's a difference between quick fixes and short-term success, and what we were trying to achieve was short-term success,” Block said. “Inefficient systems are propped up by quick fixes—just fix it a little bit, enough so it doesn't collapse in, but it never meets the challenge or solves the problem.”

One of those short-term successes was the city’s new Flexible Subsidy Housing Pool (also known as the Flex Pool), a CHI–funded pilot program that is now a permanent part of San Francisco’s homelessness response strategy.

Once a national leader in championing Housing First strategies, San Francisco invested in thousands of permanent supportive housing (PSH) units beginning in the early 1990s, well before the evidence-based approach to homelessness became common across the country. But once the city landed on this strategy, it stuck with it, investing only in site-based permanent supportive housing—where all units in PSH buildings are for people experiencing homelessness—and concentrating these programs in one neighborhood (the Tenderloin). After significant investment in site-based PSH, San Francisco relied on that option as its sole response to chronic homelessness.

“You need to have enough interventions to deal with the complexity of the problem,” Block said. “We assumed before that every [person experiencing homelessness] wanted to live in a small room with a double-loaded corridor. It wasn't true. They want to do home sharing. They want to live in other apartment buildings across the city. We needed new strategies to meet people where they are.”

CHI convened a range of partners—including nonprofit service providers, consultants, and government officials—to develop and pilot the Flexible Housing Subsidy Pool. Based on a similar program in Los Angeles, Tipping Point’s Flex Pool pilot provided PSH units in the private rental market across the city (known as scattered-site housing), rather than only in buildings devoted entirely to PSH.

As part of the program, the nonprofit organization Brilliant Corners engaged landlords, offered incentives to rent to people who had formerly experienced homelessness, and provided ongoing tenant supports. Tipping Point's CHI paid for the first 18 months of the program, and the city committed to providing long-term support for everyone housed through the Flex Pool.

Cynthia Nagendra, deputy director of planning and strategy for HSH, emphasized CHI’s important role in dispelling misconceptions around the feasibility of scattered-site PSH in San Francisco, calling the program an important “proof point” that showed the city what strategies could work.

“People here didn't think that scattered-site housing could work for people who are experiencing homelessness because site-based was all the community knew, and they couldn't imagine that landlords would rent to people who were experiencing homelessness,” she said. “If Tipping Point didn't come in and seed the program, I don't know if it would've happened. Tipping Point took a risk on innovation that HSH couldn’t have taken on what is now a key intervention in our options for permanent supportive housing.”

Since its philanthropically funded launch, the Flex Pool has expanded through multiple funding sources and has housed more than 1,000 people in scattered-site units. The city plans to continue investing in this private rental market approach in addition to providing site-based PSH. The Flex Pool was just one of several efforts led by CHI, including the Moving On Initiative and Rising Up program, that stakeholders point to as effective proof points for how philanthropy can test new approaches that lead to long-term change.

“What you're trying to do is make strategic investments that point the system in a different direction and then help the policy to catch up with that directional change,” Block said. “The Flex Pool is a short-term success that, faster than anybody could imagine, changed the system.”

Investing in the expertise and power of people with lived experience

CHI’s investments also included a crucial element that was previously missing from the system: the expertise of people with relevant lived experience. A few years into the initiative, Tipping Point created a Community Advisory Board (CAB) comprising a group of around seven people who were experiencing or had formerly experienced homelessness.

CAB members—who had previous experience with advocacy in the homeless community—met monthly to discuss CHI’s work, weighing in on public campaign designs, the name of Tipping Point’s innovatively funded PSH building, what resources should be provided to people entering housing, and other proposed investments. Tipping Point paid CAB members for their time and expertise throughout the initiative.

Mayra Sierra, former community partnerships and inclusion manager at CHI who led the initiative’s work with the CAB, said that as soon as the board was created, “it changed the soul of the initiative.” She and other CAB members emphasized the importance of consulting people who have experienced homelessness to make sure a new idea will be successful.

“If you don’t have people that understand it, that have lived it, touched it, tasted it, felt it, how do you know what to do about it?” said CAB member Couper Orona. “I ride the fence on the unhoused world and the regular world. I can take what’s happening here and tell people out there on the street what positive things are happening or what's about to happen, and I can give people hope. And then I can bring what’s happening out there in here to say, ‘Hey, look, this is what's happening on the street, and this is what people need, and this is what people want, and this is why they're giving up.’”

TJ Johnston, another CAB member, added, “Anything that the CAB would come up with based on our own lived experiences might seem out of left field to someone working at Tipping Point. But when we do have those encounters, I feel like they're better informed of those experiences.”

In addition to advising on CHI investments, Tipping Point also created a participatory grantmaking fund for CAB members, providing them with $200,000 to divide among service providers in the city who they thought needed it most. CHI staff briefed the CAB on grantmaking and grant-writing processes but gave the members full decisionmaking power. CAB members chose around six grantee organizations, many of which were small organizations that were well known in the homelessness community but had not been Tipping Point grantees.

“That showed that we trusted the CAB, and we know that if they say it's important, then we should listen. Money is power,” Sierra said. “And part of the beauty of it was when we awarded the funds, we let the organizations know that not only was it was not Tipping Point that chose them, but it was people with lived experience who chose their organizations.”

Travis Chapman, a CAB member, advocated for one of the grants to go to At the Crossroads, a service provider that had helped him when he was experiencing homelessness. “I helped out one of my favorite programs, so that really mattered to me,” he said.

The CAB no longer convenes as of CHI's closure in June 2022, but initiative staff hope their successes show other funders and government stakeholders the importance of seeking out the insights of people who have experienced homelessness and giving them decisionmaking power.

“I hope that people on other CABs like this can have the same experience of being part of something that matters and that their voice is being heard,” Orona said. “We make a difference, and the work we do leads to something better for people.”

Sparking a sense of possibility and urgency around efforts to address homelessness

Now that CHI is over, Tipping Point staff hope the initiative helped call attention to the urgency of the city’s homelessness crisis while also showing that real change is possible in the system. Andrea Evans, CHI’s former director from 2021 to 2022, said that the initiative grabbed the attention of the private and public sectors and aligned all of CHI’s efforts in one clear direction.

“We brought attention and resources to the goal in a really significant way,” she said. “I think a lot of philanthropy had just kind of shied away from doing homelessness work. It was too big, it was too messy. And now, we're seeing more philanthropic support around homelessness-related efforts.”

Rebecca Foster, CEO of the Housing Accelerator Fund, one of CHI’s grantees, said her organization’s work with Tipping Point to build a 145-unit PSH building in the city in less time and for less money than previous PSH developments gave a “jolt of energy” to the organizations and partners involved in the project, showing them that it was possible to build housing in a different way.

That building, the Tahanan, was constructed in nearly one-third the time and for about 40 percent less cost per unit than traditional PSH buildings, according to forthcoming research from Urban and the California Housing Partnership. Stakeholders involved in the development credited these results in part to centering their decisionmaking on the priority goals of reducing development costs and time.
 

“For the people who have been in this industry trying to tackle this problem for so long, we need those wins,” Foster said. “We have that with Tahanan. We are hearing from the people who live there that it is an amazing home for them. Everyone who was part of this project now knows that we can do super hard things that we didn’t think were possible, if we are willing to do things differently.”

Looking ahead, San Francisco has an unprecedented amount of resources to devote to ending homelessness as a result of Proposition C, a business tax passed in 2018 that will provide hundreds of millions in new revenue to fund homelessness services each year. Nagendra said HSH plans to use many of the lessons from CHI to inform the agency’s strategic plans for the coming years, in addition to continuing to improve the government’s approach to equity in its homelessness services and focusing on data transparency and accountability.

When reflecting on the end of the initiative, Block feels torn between a sense of pride and a sense of unfinished work to solve such an urgent challenge.

“CHI did remarkable work, and we’re heading in the right direction. But I have to go run a couple of errands this afternoon, and I won't get halfway down the block before I'm reminded of our constant and ongoing failure,” he said. “The world should stop when somebody’s living like that. But the world does not stop. Whenever I pass a person living outside, I say to myself, ‘We haven’t gotten to you, yet.’ That’s the level of urgency that the whole system needs to feel in this work.”

This feature was funded by Tipping Point Community. We are grateful to them and to all our funders, who make it possible for Urban to advance its mission. The views expressed are those of the authors and should not be attributed to the Urban Institute, its trustees, or its funders. Funders do not determine research findings or the insights and recommendations of our experts.

RESEARCH Samantha Batko, Lynden Bond, and Pear Moraras

DEVELOPMENT Jerry Ta

EDITING Irene Koo

PHOTOGRAPHY AND DESIGN Rhiannon Newman

WRITING Emily Peiffer