Homeless shelters have provided and still provide a vital service to societies and communities across the world. The temporary shelters provided by such programs have helped people find a place to lay their heads while making arrangements for relocation.

However, this isn’t what we are interested in. Instead, like many, we ask how do homeless shelters make money. We have found answers and will make them available as you read along.

Causes of Homelessness

Although it may seem irrelevant to this discussion, knowing the causes for homelessness helps in understanding the issues surrounding funding. Several reasons contribute to people losing their homes.

Such include gentrification, stagnant wages as well as skyrocketing rent. Let’s briefly explain each of these;

  • Gentrification

This is an all too common event that occurs whenever there is an influx of people within the middle and upper-class ranges.

In such situations, such districts are remodeled and improved. This raises the value of such properties well beyond the reach of most working-class families with stagnant wages leading to homelessness.

  • Stagnant Wages

As wages stagnate, there is a rise in the cost of mortgage rates. This has been one of the major causes of homelessness. People are no longer able to keep up with their rising cost of living.

In such circumstances, they either need to find better-paying jobs that aren’t readily available or are left with the option of relocating. Those who are unable to cope end up losing their homes.

  • Skyrocketing Rent

All three factors leading to homelessness (gentrification, stagnant wages as well as skyrocketing rent) are similar.

In the case of rising mortgages, people within improved districts suddenly find out they can no longer cope with increasing rent demands. This is because their wages aren’t commensurate with their expenses. Although they have a job, such people become homeless.

What Homeless Shelters Need Funding for

Most times, some people get confused with homeless shelters due to the erroneous belief that such do not need funding for their daily operations.

Funding is needed for the smooth functioning of homeless shelters. Although most homeless shelters run on a tight budget, such would do better with improved funding. These expenses mostly consist of insurance costs, functional utilities, as well as wages for its workforce among others.

How Homeless Shelters Make Money

Having discussed the major causes of homelessness, we now shift our focus to how homeless shelters operate. Our focus will be on how they make money. In whatever city you live in, you are likely to find a homeless shelter near you.

These institutions require funding to work. There are several ways of generating funding that include marketing, donations from non-profit organizations, individuals, religious organizations, and fundraising activities among others.

  • Marketing

Making money for a homeless or emergency shelter begins with marketing. This is being exploited by a lot of such organizations to raise awareness of the plight of the homeless. Such marketing campaigns target a wide range of donors. Before launching a successful marketing campaign, homeless shelters create a database of potential donors.

This is the groundwork upon which success is built.

When designing a marketing plan, successful homeless shelters have tried to avoid asking for large donations or amounts. They solicit for funding by striking a balance between the extremes. In other words, they don’t ask for so much so as not to scare donors.  And also not asking for too little that will end up not being enough.

To attract a steady stream of donations, marketing campaigns are designed such that existing donors are maintained while targeting new donors whether they are individuals or corporate entities.

  • Donations from Non-Profit Organizations

Nonprofit organizations play a crucial role in the existence of homeless shelters.

They are one of the many ways homeless shelters make money. There are different types of nonprofit organizations that focus on specific issues dear to them. Many such organizations provide a lifeline for homeless shelters to thrive. Most of such donations are done regularly.

  • Donations from Individuals

Homeless shelters welcome donations from individuals as well. Their marketing activities target this group of donors to enhance their income generating streams. Because homeless shelters provide a vital service to society, they easily appeal to individuals.

However, the central message of homeless shelters must be compelling enough to commit people to such cause.

  • Donations from Religious Organizations

Religious organizations are considered stakeholders by homeless shelters.

Religious organizations will either donate to homeless shelters that align with specific religious beliefs or do so to just about any homeless shelter. Many homeless shelters derive their financial support from such organizations.

  • Fundraising Activities

One of the ways homeless shelters make money is through fundraising activities. Now there are almost inexhaustible strategies of making money through fundraising activities.

A few of these include virtual charity run (where volunteers can run at their convenience for your fundraising page where their family and acquaintances can support them), gaming for a cause, partnering with a restaurant to organize a charity.

Here, donors get to enjoy a meal while part of the proceeds goes to the homeless shelter.

Different homeless shelters have different strategies for making money. The most important thing is to create an income stream to help support their activities.

How do homeless shelters make money? We have been able to look into such ways. To continually provide such vital services, homeless shelters go all out by using existing channels as well as innovating new ways to enhance their income streams.