Безвозмездные организации усугубляют жилищный кризис, заменяя государственные услуги на условиях тендерных контрактов

How not-for-profits make the housing crisis worse Non-profits were meant to supplement public services. Now they replace them on the cheap, at a cost to workers and communities There is a blocky, 34-unit low-rise just east of the Bonnie Doon Bridge on Edmonton’s south side. The slate-grey, four-storey building, called Hope Terrace, opened its doors in late 2022 with a mandate to house people with a history of homelessness and fetal alcohol spectrum disorder. The people who live here have often led complex, difficult lives and have struggled to maintain housing in the private market. At Hope Terrace, they have access to the resources they need to thrive. Residents receive daily support from specially trained staff who are on site around the clock, helping with everything from emotional regulation and budgeting to food security, medical service integration, employment, and guest management. Buildings like this, known as supportive housing, have become an important part of Canada’s housing system. They provide stability, care, and independence to people who might otherwise cycle between shelters, rough sleeping, and emergency services. Like most supportive housing in Canada, Hope Terrace was built with a combination of federal and provincial dollars by private developers under the supervision of a non-profit—in this case an organization called Homeward Trust. After construction was complete, Homeward Trust, the formal owner of the building, used federal and provincial funds to contract out daily operations to another, smaller non-profit—in this case an organization called the Bissell Centre, where I happened to work as a director in the early 2020s. This arrangement has become the default path for the construction of non-market housing: public money, private profit, non-profit liability. Prominent housing advocacy groups, including the Federal Housing Advocate, The Shift, and Generation Squeeze, often push for more of this kind of non-profit housing. I can understand why. Non-profits—referred to mostly interchangeably as non-profit organizations (NPOs), non-governmental organizations (NGOs), registered charities, voluntary organizations, and the third sector—have been a huge part of housing policy for decades. They even played a role in solving the housing crisis of the 1970s. It is natural to see them as part of the solution to today’s housing woes. However, after years working in the housing focused corners of the third sector, I can tell you that non-profits will never resolve the dysfunction in our housing system. They erode service quality, undermine labour power, and intensify Canada’s democratic deficit. NGOs have become a major impediment to housing justice. This wasn’t always the case. In the Keynesian, post-war period non-profits were viewed as a supplement to the direct provision of services by national and provincial governments. Back then, states provided uniform services on an equitable basis and non-profits provided individualized services that filled unique service gaps. In the housing sector this meant non-profits served specialized niches in the housing continuum while robust federal programs met the lion’s share of the need by building and operating tens of thousands of units every year. But Keynesianism is long dead and things have changed dramatically since Reagan, Thatcher, and Mulroney put it in the ground. Non-profits no longer exist to supplement social services but to replace them on the cheap, regardless of the impact lower costs may have on the people who rely on those services. This pattern began in earnest in the 1990s when the federal government stopped funding the construction of non-market housing and downloaded responsibility for existing stock to provinces which were inadequately resourced to take on this new role. The provinces had little choice; they either defunded housing services, downloaded the responsibility to municipalities, or abandoned it altogether. Housing services that survived this bloodbath were hobbled. Government contracts with housing not-for-profits fell to between seven to 15 percent short of actual costs, a tactic that has been described as the “hollow core approach to funding.” As these increasingly austere service contracts moved from federal to provincial and municipal government, non-profits adapted to survive. They cut staff, reduced wages, eliminated benefits, and bloated their fundraising and government relations departments. When the dust settled, non-profits found themselves in a new world. Organizations now competed for underfunded government contracts that lasted sometimes as little as a few months. They endured gruelling procurement rituals where they battled for an ever-shrinking number of service dollars in an arena where the lowest bid always wins. This race-to-bottom had the dual effect of degrading service quality and bloating organizational bureaucracy as every non-profit found itself redirecting resources away from their core mandate to work on fund development as a matter of survival. I have worked in senior roles for organizations that have tackled this problem in different ways. One tried to keep things lean (they had a single fundraiser) whereas another agency of roughly the same size had an entire resource development team of seven full-time staff costing roughly $500,000 a year. In both cases, almost none of the donations the agencies received were used for direct service provision. Instead, donations supported structurally underfunded back-end administration, data management, marketing, GR, HR, IT, facilities—as well as the costs of the fundraisers themselves. Ultimately, donations to the third sector amount to a subsidy for services governments have chosen to starve. The financial inefficiencies of non-profits are not the product of corruption or mismanagement. Non-profits are heavily audited, and most local organizations keep CEO salaries below $150,000. Rather, these inefficiencies are built into the system; they are a feature, not a bug. By systematically underfunding services and relying on charitable contributions to make up the difference, governments effectively shift costs onto citizens. The resulting savings make room for tax cuts and corporate giveaways. There is a credible argument, then, that non-profits are a lynchpin in a system that indirectly redirects charitable contributions into the pockets of the wealthy. In our neoliberal age non-profits run cover for states looking to absolve themselves of their legal and moral responsibility to provide essential services. NGOs allow states to shift those responsibilities onto a fractured and fractious group of organizations that are structurally incapable of solving them. This transfer of responsibility creates a self-reinforcing cycle. As the state replaces public services with NGOs the social problems those NGOs are meant to solve inevitably get worse, prompting the founding of more NGOs which further entrenches the state in its posture of divestment. To quote the sociologist Janet Poppendieck, “It is not an accident that poverty grows deeper as our charitable responses to it multiply”—an observation which fits a country that operates thousands of housing non-profits (1,500 in Ontario alone) while 235,000 people experience homelessness every year. Perversely, this strategic evasion of responsibility has tightened the state’s hold over service provision. Governments use competitive, short-term service contracts to control how non-profits operate, how they provide services, and to whom. The strict terms of these contracts (much stricter than the bloated contracts governments sign with party-favourites in the private sector) create what UC Berkeley professor of urban planning Jennifer Wolch described as a “shadow state” overtop of the third sector. The strategy of shrinking state bureaucracies while simultaneously enhancing state power has been called “centralized decentralization.” We can see this dynamic in action in Alberta today where the provincial government recently moved the Homeless Supports and Housing Stability branch to the Ministry of Mental Health and Addiction. Non-profits are now scrambling to rework their housing services around Alberta’s half-baked “recovery” model or risk losing their contracts. This “shadow state” has enforced a cultural transformation in the organizational structure of not-for-profits. Ted Richmond and John Shields’ 2024 book The Canadian Non-profit Sector: Neoliberalism and the Assault on Community describes the transformative impact these neoliberal funding and contracting arrangements have had on the internal processes of non-profits. They point to the widespread adoption of a “business-based orientation” that “reinforces hierarchical managerial authority, in opposition to a more grassroots, community-centred approach.” Richmond and Shields argue that the implementation of an MBA ethos has become a shibboleth of non-profit leadership. Private sector modalities are adopted whole cloth into the third sector without regard to applicability. The Bissell Centre, for example, once had a full-time, in-house trainer dedicated to ensuring staff were familiar with the most up-to-date practices in the field of project management. At one training session I watched staff puzzle over how the concept of “customers” fit into their “workflow.” Meaningless biz-dev buzzwords pop up at AGMs and board meetings as executives perform competence. One CEO once told me his organization ran according to Lean Six Sigma principles. These little absurdities aside, business-oriented notions of efficiency are fundamentally incompatible with human services in general and housing services in particular. Forcing that square peg into the round hole has been disastrous. I’ve seen tenants at supportive housing sites like Hope Terrace not get the care they need because the few staff non-profits can afford to keep on site were bogged down with administrative tasks designed to track key performance indicators funders will never bother to look at. The enforced marketization of non-profit operations has resulted in an additional, often unstated, boon for neoliberal governments and their stakeholders in the private sector; namely, the brake it puts on labour power. By running essential services through non-profits states ensure workers are forced to negotiate salary and benefits not with the people who are actually paying them—governments—but with the third parties, meaning the non-profits contracted to do governments’ work for them. Workers who succeed in unionizing and winning higher wages are extremely vulnerable; government can shift a contract it finds too expensive to another, non-unionized shop at any time. Unlike in the public service where teachers or nurses can band together in the tens of thousands and use their collective strength to effect change, non-profit unions organize shops of a few dozen or—at most—a few hundred workers, shrinking their bargaining power substantially. Unions, faced with fragmented workplaces and precarious contracts, have struggled to mount the sustained, province-wide campaigns that would be necessary to change these dynamics. The structure is designed to defeat them. The outcomes are stark. Statistics Canada data shows the 2.7 million employed in non-profits (the sector employs more people than construction, manufacturing and retail trade combined) receives wages that are 13 percent lower than the national average, a gap which widens to a staggering 31 percent for the kind of community non-profits that operate supportive housing. This data matches with my experience in the sector where the nurses and social workers I hired were paid between 30 and 40 percent less than their unionized peers in public health services. But the oppressive nature of the neoliberal non-profit industrial complex isn’t limited to economic exploitation, it extends to antidemocratic pressure exerted on workers and, by extension, society as a whole. This has not always been the case. Historically, non-profits had a significant role in deepening public discourse by giving “voice to the voiceless.” As one particularly astute paper from the journal Policy and Society put it, this advocacy function was once a social tool for “incorporating more marginalised elements of society into a system concerned with gaining legitimacy through the use of compromise and accommodation.” In the neoliberal era this advocacy function has been turned inside out. Researchers have found non-profits are systemically discouraged from political activity, advocacy, or even public speech that is anything other than servile to state power. When interviewed, executives admit they are afraid of upsetting their funders and losing precarious contracts. However, the research often misses the fact that this regime of conservative political correctness trickles down. I’ve seen CEOs monitor the social media accounts of front-line staff for politically verboten content. People’s jobs are threatened for being too critical of provincial governments too publicly. In my own experience, when I first began writing for Canadian Dimension, I was told by my CEO I would be fired if I couldn’t convince the editors to republish my work under a pseudonym (I have since left that particular employer and have reclaimed my writing under my own name). This is perhaps the most sinister aspect of non-profits. These terrified little agencies absorb some of the most passionate, caring individuals in the working class—what Gramsci called the organic intellectuals—and muzzles them. This silencing of 2.7 million workers has undoubtedly had a chilling effect on our discourse and our democracy in ways we have not even begun to reckon with. The NGO-ification of housing services has been a highly disruptive, decades-long process, resulting in challenging and painful adjustments and crises throughout society, including within the non-profit sector itself. The distancing of the state from direct provision of public services has led to the hollowing out of basic care infrastructure. However, despite their ineffective, inefficient, and anti-democratic qualities non-profits retain a strong appeal for federal, provincial, and municipal governments of all stripes. They create downward pressure on service costs, shield government from criticism as services degrade, and allow the state to evade significant legal liabilities. The primary function of non-profits is not to solve social problems, but to run cover for a state that has abandoned social and economic justice in favour of market orthodoxies and the neo-aristocracy that profits from them. The non-profit sector has become a tool of disempowerment and privatization, one that has been deployed to take large chunks of the nation’s care infrastructure out of the public domain and to absolve governments of the need to take action on social issues, all for the benefit of the ultra-wealthy. The historical role non-profits have played as advocates in our society has been inverted—they now function as disciplinary apparatuses for those whose ethical and policy critiques might be politically inconvenient. This cannot continue. Housing is essential social infrastructure and a basic human right; it is not adequate or appropriate to leave it in the hands of a fractious and marketized third sector. Governments must give up their workshy evasions and accept responsibility for stewarding a fair, just, and well-housed nation. Laurence Braun-Woodbury is a writer and community advocate who has worked with NGOs across the country to help adults experiencing poverty and homelessness. His first novel, Glamorous Failures, was published in 2023. His next book on housing financialization will be published by Between the Lines.