With great power, comes great responsibility — a shared sentiment Longmont Community Foundation and its partner Homeless Outreach Providing Encouragement, or HOPE, are testing with a new direct funding assistance program the nonprofit groups think will improve the overall lives of its participants.
“We’ve done a lot of research and are hoping to find that this direct assistance to Longmont residents will help stabilize their life situations,” Longmont Community Foundation CEO Eric Hozempa said. “Currently, we are testing this program with HOPE, and they are the ones that have done the work to identify which clients were best suited for this direct funding program.
“Utilizing HOPE’s case management skills, we aim to locate individuals who are candidates for this project based on parameters they set for participants,” Hozempa said. “Ultimately, HOPE determined the goals of the project, the reporting methodologies and will monitor the project outcomes.”
Hozempa added candidates will need to agree to disclose how they spent the funds and what, if any, improvements were made to their living situations. “LCF chose HOPE because we want them to be a leader with this project, as they are the experts with our community and population.”
The HOPE Direct Funding Assistance project is in the first phase of its trial testing. Case managers have selected four residents to receive unspecified amounts of financial aid in the form of cash.
“Eric (Hozempa) at LCF and HOPE have this shared vision to heal the hurting and reduce the stigma on those experiencing or facing homelessness in our community,” HOPE Director of Development Kimberly Braun said. “Many months and discussions later, our case managers, myself, LCF and its trustees, developed this program that answers to investors and those who donate — which allows us to get funds into the hands of our participants faster.”
Work on a joint direct funding project began a year ago.
“Studies have shown that people greatly benefit from being entrusted with gifts of cash,” Hozempa said. “Much of our philanthropic efforts currently center around controlled financial assistance to people, as in we provide the aid, but we pay those payees directly.”
HOPE Longmont Executive Director Alice Sueltenfuss explained recipients would not only use the monies for the financial assistance they asked for, but would use any remainder to continue working toward remaining housed or toward securing a residence.
“This program is a treasure for our community, and it will benefit many people within our program upon successful completion of the trial phase,” Sueltenfuss said. HOPE does not know how much has been donated to fund this specific project because it’s still in its infancy, but will present a funding accountability breakdown to its funders and LCF’s investors.
Hozempa explained the idea behind giving no-strings-attached direct financial assistance was inspired by GiveDirectly.
GiveDirectly, with its headquarters in New York, is the first and largest worldwide nonprofit that allows donors to directly send money to participants in its program. Initially the nonprofit began to send direct cash funds to those experiencing extreme poverty in Africa.
Due to the COVID-19 pandemic, GiveDirectly extended its program into the United States. Longmont Community Foundation and HOPE based their direct funding program on GiveDirectly; however, they use funds generated from investors and those who donate to the nonprofits.
GiveDirectly Co-founder and President Michael Faye wrote in an email, “We believe people living in poverty deserve the dignity to choose — for themselves — how best to improve their lives with the cash they receive from those who send it to them.”
Faye said it’s a misconception that those who receive the direct cash payments use it to fuel illegal substance abuse or on alcohol. Since 2009, the nonprofit has delivered more than $400 million in direct cash funds to its participants. GiveDirectly helps those affected by the pandemic in the U.S. and Africa, those experiencing extreme poverty, refugees and those needing disaster relief.
“Due to the success of GiveDirectly’s efforts, other platforms and organizations — like GoFundMe — have entered into this free, unattached financial giving to make it easier for individuals to better their lives, not just in the sole area they seek assistance,” Hozempa added.
Hozempa said other sources of inspiration for the HOPE Direct Funding Assistance project came from articles by New York Times reporters Nicholas Kulish and Ron Lieber, and “Factually” podcaster Adam Conover.
“We’ve all been there, a tire blows out and we need a new tire — OK, for many of us it’s easy to budget in a new tire or simply go get one,” Hozempa said. “But then we find that we also need new brakes, or shocks, and the financial demand goes up. And this happens to everyone, whether they can afford the mounting financial burden or not.”
“So what this direct funding assistance project essentially does is, (it) says, ‘Hey, you need X amount for a new tire, but here is just a bit more, in case you also have to do this or that,’” Hozempa said.
Funds from this program could be used for auto repairs, health care costs, rent deposits or other needs that pop up.
“HOPE has identified four clients so far that need assistance in paying for their storage units, dental work that is really important for their overall health, motor vehicle fees, auto repairs and cellphone payments,” Sueltenfuss said.
“We believe that entrusting these clients with direct funds for these sorts of things gives them a sense of self-worth, self-pride and accomplishment,” Sueltenfuss said. “It’s (the direct fund assistance) not just a ‘handout’ but a ‘hand up’ that goes much further in the long run in helping residents obtain financial independence and well-being.”
Of the four participants, program directors have selected two to receive the funding they requested. One participant has received the funds needed to repair his vehicle.
“It’s very exciting,” Braun said. “One resident — a participant of the HOPE program who doesn’t have a home, is totally dependent on his car for work — now has a working car because we were able to process the transaction that much faster.”
“This program is fluid in the fact that we are still working closely with LCF and our case managers so it can and likely will morph as we find out what is working or isn’t working,” Braun added. “This program and conversation came up quite unexpectedly through a conversation with Eric (Hozempa), and it evolved to me saying something like, ‘What if we started this program this way, where we had the direct funding covering the specific service the client was making known is their need?’”
Braun said, “LCF happily adapted Eric’s pitch to our organization’s need to show where money flows in and out and be accountable for that to this hybrid that so far is working beautifully and such a great success.”
“We have had donors with things like heart conditions say, ‘I want to help someone who has a heart condition,’ so the way this program is shaped also allows us to continue to give assistance to those our donors really want to help,” Braun added.
“Depending on the success of this project, we hope to extend this to other area nonprofits,” Hozempa said. “We have the power to change lives for the better, with just a little bit of dignity of this direct funding program offered to residents within the HOPE program.”
“We can always use additional funding, and donations can be earmarked for this program specifically through LCF or HOPE,” Hozempa explained. “Because we want this program to have longevity in our community — it isn’t our aim to use all of our funds immediately for this project.”
More information
Those wishing to donate or get involved with Longmont Community Foundation or HOPE can go to the nonprofits’ websites at longmontfoundation.org or hopeforlongmont.org.
More information about GiveDirectly is at givedirectly.org.
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