Seattle Chamber of Commerce

September 25, 2009
Prepared Remarks by Jeff Raikes, Chief Executive Officer

Thank you, Kirk, for that kind introduction. Thank you, Frank, for finally realizing what time it is. And thank you all for this warm welcome.

It’s a great honor to speak to the Seattle Chamber of Commerce. I come from Nebraska, but Seattle is my adopted home. I’ve lived here for 30 years; my career took off here; I raised my family here.

Now, I can’t tell you who I’m going to root for when the Cornhuskers play the Huskies next season… but I can tell you that I love Seattle. I’m proud to be a Seattleite.

Seattle is also a great place to run a business. Like all of you, I feel personally obligated to keep it that way. We have all gotten so much from Seattle, and it’s only right to give back so that others can continue to be healthy, happy, and prosperous here.

Bill and Melinda feel the same way. That is why the Gates Foundation has committed more than $3 billion in Washington state. Most people aren’t aware of how much we invest here at home because we get so much attention for our global health work. But we are proud of the work we do in the Seattle area.

Most of that work involves education, because we believe education is the key to opportunity. We invest at many levels: early childhood education, high schools, and community colleges.

The goal is to help students all along the way, so more start school ready to learn, graduate from high school, and go on to earn a college degree or a certificate that helps them get a good-paying job. Over the years, we have also helped bolster another important educational institution, public libraries.

In addition to our education work, we have spent almost $500 million on what we call community grants, which go to some of the hundreds of local organizations whose mission is to help the most vulnerable members of our communities.

And even though our global health grants are designed to help people in poor countries, they contribute to our local economy. We are proud that many of them go to Seattle-based organizations like PATH, the Seattle Biomedical Research Institute, and the UW—organizations that are turning this city into a world leader in health R&D.

Today, however, I want to talk about one local issue in particular: homelessness. It’s an issue that matters to me personally; it’s an issue the Gates Foundation has been working on for almost a decade now; and it’s an issue that your “it’s time for business” slogan describes perfectly.

In 2000, the Gates Foundation joined dozens of public- and private-sector partners in King, Pierce, and Snohomish Countries to create a program called Sound Families. It was based on the idea that you can make a real dent in the problem by giving families two things: first, a safe place to sleep every night; and second, help addressing the root causes of their homelessness while they get stability back in their lives.

Our original investment of $40 million leveraged more than $200 million in public money, and Sound Families ended up building almost 1,500 homes for homeless families.

The University of Washington tracked the families that went through the Sound Families program over seven years, and the data is clear. Housing plus services works. About three-quarters of the more than 1,500 families that entered the program moved on to a permanent home—and stayed there.

Because the results were so encouraging, the state legislature created the Washington Families Fund in 2004; it helps pay for a Sound Families-like approach across the state. Together with the state, 20 partners have put more than $20 million behind this solution because all the evidence says it’s a wise investment.

Sound Families and the Washington Families Fund were important beginnings, but they were only beginnings. The Gates Foundation is more committed to this issue than ever.

When I talk to people in the Seattle community about homelessness, I run into a lot of assumptions. One of the refrains I hear all the time goes something like this: Helping the homeless is the nice thing to do. It’s something I should do. It might even be something I want to do.

But in the end it’s just charity; it’s not a smart strategy for our businesses and our community. In other words, it comes from the heart, not the head.

Well, I came here today to tell you that anybody who says that is just plain wrong.

Take a minute to conjure the image of a homeless person in your mind. What does a homeless person look like?

When most people think about homelessness, they see a single man, maybe mentally ill, maybe addicted to something, living on the street. It makes sense. That’s who you see when you go to a ballgame. That’s who I see when I do the One Night Homeless Count every year.

Recently, some really smart experts have designed creative ways to help the members of this population. Many of you know about 1811 Eastlake, the new apartment complex that serves homeless individuals struggling with chronic alcoholism. A recent study published in the Journal of the American Medical Association showed that it saved Seattle more than $4 million in just its first year.

But that’s only one image of homelessness. The fact is that individuals are only half the homeless population. I see a different image.

I see a young child. I see a mom and her kids, sleeping in her car, or at a campground, or on friends’ floors. Half of all homeless people are members of families, and families are the fastest growing segment of the homeless population.

Understanding the demographics of the homeless population matters a lot, because it can help us take advantage of an opportunity we’ve been missing.

Homeless people aren’t just a problem to be minimized, or cleared away. They have amazing potential. In fact, most homeless families are right on the edge of being a productive part of a healthy community and a thriving economy.  

The heads of homeless families tend to be younger adults entering their prime productive years. Their children are usually entering their key developmental years.

The one thing they’re lacking is the support system we all rely on from time to time to get us through perfectly typical challenges: a health emergency, a pregnancy, a layoff.

Unfortunately, our current financial crisis is confirming this analysis. A few weeks ago, the New York Times ran a cover story about homeless children; it said that the number of homeless kids in school “appears to have risen by 75 percent to 100 percent in many districts over the last two years.”

Let me show you another image of homelessness.

I recently visited a woman named Teesha and her two young children, Jordan and Gus.

Last year, Teesha was working in collections at a shipping company when her aunt, who lives in California, got very sick. Doctors said it was kidney failure, so Teesha went to California to donate her kidney. After an extended recovery, she came back to Seattle, and both the home and the job were gone.

It’s hard not to be moved by Teesha’s sacrifice, but something else about her story stuck with me, too: Teesha should be an economic asset.

She has a high school diploma. She has some college credits. She is well-spoken. She is ambitious; she wants to go back to school to become a pharmacy technician Her ultimate goal is to become a pharmacist. Before she left her job, she was earning about twice the minimum wage. In short, Teesha is not a person apart from our community. She and her kids are what our community is made of. All they need is a little help.

Teesha is not an isolated example. Researchers from the UW found that 70 percent of the more than 1,500 families that participated in the Sound Families program were headed by a parent with a high school diploma or a GED.

Let me put that in perspective: the homeless moms and dads in Sound Families had a higher graduation rate than Seattle Public Schools. The ramifications are clear: the line between the homeless and everybody else is paper thin.

In King County, there are roughly 10,000 people who are members of homeless families. There are another 30,000-plus who are strong candidates to join them soon. These families are what are known as “rent burdened,” which means they earn half the median income and spend at least half of their half on housing. Their grip on their homes is extremely tenuous.

Add it all up, and you’re talking about 40,000-50,000 people living on the border between productive stability and destitution. The situation presents a real economic opportunity if we can help families become stable and productive.

Parents like Teesha can get good jobs. Children like Jordan and Gus can get a high-quality education. They can become producers and consumers and active citizens who contribute to the life of this city.

That’s one vision of what the future can hold. Here’s another: Teesha doesn’t get the help she needs at this critical juncture. She stays unemployed. She becomes homeless again. She remains dependent on public funds.

Jordan and Gus have to move schools over and over again, and they fall behind. In the years ahead, they’re more likely to be unemployed, or to become homeless adults, or to end up in jail.
In this scenario, an opportunity has turned into an expensive problem that will persist for generations.

The next question is obvious. How can we seize this opportunity? What is the most effective way to help homeless families? After all, as taxpayers, we’re already spending money to manage homelessness, but we’re not making enough progress toward ending it. We’re not using our resources as efficiently as we could.

At the Gates Foundation, we’ve spent several years studying how communities across the country address homelessness. Our new initiative is geared toward helping our partners in King, Pierce, and Snohomish Counties scale up approaches that have worked in other places. The goal is to put the homelessness systems in the area on a more business-based footing.

The inefficiencies of our current system are an accident of history. In the 1960s, the number of homeless people increased dramatically, and well-meaning people responded to the emergency as best they could. But their reactions—all too oftenusually to build shelters—quickly hardened into a system. Nobody strategized about what a good system to reduce homelessness ought to look like; instead, it just grew by accretion.

There are no villains in this story. It’s just that our responses to homeless families were never designed as a system, so it’s no surprise that they don’t operate as a system.

It’s time to do some rigorous systematic thinking now.

Let me give you a handful of examples that show how the current system can be improved.

First, how does a family get into the system in the first place? It turns out you usually can’t get the help you really need until you’re literally homeless. If you ask for assistance because you’re about to become homeless, you’re pretty much out of luck. That doesn’t make any sense. The goal is to end homelessness, not to encourage it.

So we need to focus on prevention. A lot of times, something as simple as a short-term rent subsidy at the right time is all a family needs to avoid an episode of homelessness.   That’s much cheaper for us, and it’s much better for the family.

Second, where do families go when they become homeless? All too often, the current answer is the shelter. The shelter has become the linchpin of our response to homelessness. But shelters are expensive. And they’re not designed to meet a family’s needs over the long term.

It’s cheaper and less disruptive to move families into permanent housing quickly. Rapid re-housing has gotten excellent results in cities like Minneapolis and Washington, DC. We will always need short-term shelters for emergencies like domestic violence. But if we spend some of the money we currently spend on shelters on homes, we will be able to serve more families more effectively.

Third, once families are in the system, they’ll probably get a standardized, “one size fits all” intervention. Some families just need help with the rent. But they tell us that sometimes they get shunted into parenting classes and countless meetings with case managers.

Other families need a lot of help—ongoing mental health counseling or drug abuse treatment—but we don’t make it easy for them to get it. A parent deeply traumatized by violence isn’t going to get what she needs in a basic parenting skills class. In each case, it ends up costing us more to provide a less effective intervention.

If we did a careful needs assessment on every family that becomes homeless, we could intervene at the right time with the right response.

You may notice a pattern: In too many instances, we’re paying more and getting less. This one shocked me: Homeless families in this area have between two and eight case managers, with an average of almost three per family.  

But each inefficiency is an opportunity to do better business—and ultimately to get better results for homeless families.

I hope I’ve made my case that homelessness is something you should care deeply about. And I hope it’s as obvious to you as it is to me that your talents and your outlook are especially relevant to reform.
So let me close by giving you some concrete ideas about what you can do to fight homelessness in Seattle.

First, you can apply your expertise directly. Volunteer to serve on the board of one of the dozens of housing and service providers in the city. They make the homelessness system run, they want to make it run better, and your business expertise and systems savvy can help them do it.

Second, you can put homelessness on your political radar. The courageous officials who are pushing for change need your support. There are some great examples in the area of officials who are thinking creatively about homelessness even though it isn’t particularly popular.

Aaron Reardon, the executive in Snohomish County, has been an inspiring partner to the Gates Foundation on homelessness issues for years.

We’re looking forward to building a similar relationship with Pat McCarthy, the new executive in Pierce County—and with the executive in King County, when that election is decided. You know very well that it will be much easier for these public servants to do the right thing if you give them your vocal support.

Third, you can become part of the constituency for affordable housing in the region. There are so many arguments in favor of it. Affordable housing is good for the local construction and real estate industries. It leads to economic growth. And over the long term, it is a key ingredient to a healthy community and economy.

Seattle is the second most expensive metropolitan area in the country. That is the major contributing factor to our high rates of homelessness.

Finally, you can contribute to the Washington Families Fund. John Stanford’s Aven Foundation is an investor. Tom and Sonya Campion’s foundation is an investor. Boeing. Microsoft. These partners joined because they know the fund pays for proven interventions. If you join them, it can bring state of the art housing and services to even more people.

Betsy Lieberman and Alice Shobe, two of the leaders of Building Changes, the nonprofit agency that leads the Washington Families Fund, are here today. They can tell you more about their work.

The most important thing is this: when you’re considering what kind of action to take on the issue of homelessness, don’t think in terms of charity.

The more I think about Teesha, the more I understand how the right intervention at the right time is not just critical for her and her children; it’s also a great investment in the future of this community.

It can turn generations of instability at taxpayers’ expense into generations of productivity and good citizenship. That’s something the Chamber should get behind. Let’s make homelessness a priority. Because it’s the right thing to do. Because it’s the smart thing to do.

Thank you.