Problem:
How should Pine Street Inn Director Lyndia Downie proceed to persuade the Board of Directors and staff to change their long term organizational strategy?
Background:
Boston Pine Street Inn has come up against a funding issue forcing Director Lyndia Downie to make a change to the Boston Pine Street Inn. Boston Pine Street Inn is a homeless shelter that is made up of five facilities with 715 beds. 450 of the beds are standard emergency shelter beds and the rest “transitional” beds (Varley, 2013). It also managed 280 units of lightly staffed housing. With a budget of $27.5 Million, roughly 46% of it going toward emergency shelter beds and 16% to permanent housing, Pine street served 15,00 homeless people a day and 12,00 annually (Varley, 2013). Funding began to decline in the early 2000’s (Varley, 2013). In 2004 Pine Streets revenue fell from $29.6 million to $26.9 million. This led Director Downie and the Board of Directors to commission 2 studies to help find an answer to help balance the budget and use the funding wisely and efficiently. The studies commissioned were a Length of Stay Study and a Cost benefit analysis study. The studies showed great insight to where money was being spent and where resources were being allocated. The cost benefit analysis study showed that they had two programs, the Nursing Clinic and the Clothing program, were programs that could be outsourced and save Boston Pine Street Inn $1 million. The Nurse Clinic cut was not taken lightly and even caused a board member to resign in protest of the decision. Because the clinic was run by nurses it was not eligible for Medicaid funding, however they had a partnership with Boston Health Care for the Homeless and they did have Medicaid funding. This made sense to outsource the clinic to BHCHP. The clothing program was costing the shelter $300,000 per year (Varley, 2013). Downie realized that this program added no real value to the shelter and they could partner with the local Good Will.
The length of stay study showed that of the 290 guests that stay 150 more days took up 49% of the bed nights and 4,500 that stayed 10 days or less only took up 7% of the bed nights. The study showed that Pine Street Inn was putting a lot of focus and energy on to people who were labeled “chronically” homeless. The people who were just in and out, 10 days or less, where not using as many resources. Pine Street Inn prides itself on taking anybody in and helping them out as best they can, this has led to enabling some guests instead of empowering them (Varley, 2013). It was estimated that the shelter and its facilities have around 500 “chronically” homeless people occupying them. Downie shared the result with the staff and the board and no one believed the numbers to be true. The Illusion of Attention from the Invisible Gorilla holds true here. The staff really thought they knew what was going on and knew how many guests stayed for each time but they didn’t. They were so focused on those “chronically” homeless guests that they were actually blinded, also known as intentional blindness (Chabris, 2010), to how many there really where. The staff also showed the Illusion of memory here as well. They thought they remembered how many new people they saw each day when they really didn’t. The length of stay study caused Director Downie to take a look at another strategy and philosophy that was being developed called “Housing First”. The philosophy was that, for many homeless people, the odds of stabilizing a psychiatric disorder, or successfully kicking booze or drugs, were much better if they had a place to live than if they were homeless. And even if they did not master their addictions, they were better off, and less costly to society, in supportive housing than on the street or in any other shelter system. (Varley, 2013) With this theory and the numbers from the length of stay study, Downie and the Pine Street Inn staff tried a new model of actively trying to discourage people from settling in. The shelter struggled with this having a hard time discerning who the short term people were and who the long term people were going to be. Downie switched her focus to the “chronically” homeless people and the “House First” philosophy. She wanted to help these people and with no help from assistance from other agencies, Pine Street Inn was the only place that would help them. Downie decided to try a small pilot test and gather some data. At the time she was looking to do the pilot test, the Boston Department of Neighborhood Development was being pressured to move funding from transitional shelter services toward housing. The city came to Downie with some extra funding if they would trade in transitional funding for supportive housing funding. Downie took the deal and began a pilot test on 20 scattered units. Downie was able to make a deal with local landlords using the leverage that the rent would always be paid and damages taken care of because the shelter was receiving funding to pay for it. The staff and Downie selected guest that were willing to move out and best suited to try and live on their own. After three years the pilot looked to be successful. 84% of the original 20 had remained. It looked as though the retention rate would hold steady for the foreseeable future. It was proving to be a little more expensive, $2000 more per year per person, but those cost looked to even out over time. The expectation was that some of the guest, around 20%, would eventually become stable enough to live on their own with no support. Downie and the board decided to move forward. Downie was able to renovate an 11 unit building, to be used for a congregate housing development, using money donated by a board member and funding from the Department of Mental Health. HUD had started to relax some of it requirements and if supportive services became part of the relaxed requirements, they would get more funding to use Pine Streets portfolio of housing. From 2004 to 2009 Downie was able to place 100 of the 500 chronically homeless guests to supportive housing. With this success Downie and Board Chair, Mary Jo Bane, looked to propose a shift of the long term strategy of the shelter. They wanted to take the 80% percent of the bed nights used by the “chronically” homeless and shift them to supportive housing. This would mean an increase of supportive housing beds by 300 and a decrease of shelter beds of 300, along with closing a shelter facility. With the proposal of the shift came a lot of questions and concerns from the staff and the board members. Would shelter demand continue to go down? Would the chronically homeless be able to sustain life in permeant housing overall? Was it wise or morally fair to place actively drinking or drug using addicts in housing while so many others waited years for low cost housing to open up? What if the funding for the supportive services, crucial to allowing this population to survive in housing, were to disappear? Should Pine Street really be a housing developer? Did Pine Street unwittingly take an increased liability when guests where in supportive housing? Would Pine Street’s loyal supporters continue to support a new housing focused Pine Street? Did the new model break faith with Pine Streets past?
Results:
Pine Street’s Director Downie was able to use problem solving from decision makers (Gary, 1997) and define the problem, shrinking funding. With dwindling funding, Director Downie commissioned 2 studies to help them make immediate cuts to save money presently and to help with ideas in reevaluating the long term strategy of the shelter. The studies helped Downie identify her criteria and help her and the Board of Directors weight the criteria. The criteria found by Downie and the Board of Directors were the following: cut the budget by $1 million, evaluate organizational structure, and keep hold of Pine Street’s mission of never turning anybody away. Downie and the Board of Directors never put a numerical value of the weight of the criteria, however keeping the mission seemed to be the most important followed by the long term success and then the immediate cuts. The alternatives generated were make cuts to certain programs (Nursing Clinic and clothing program), change the long term organizational structure of the program, make no changes, and try to put pressure on other government agencies to help place homeless people. The optimal decision they made was to make immediate cuts to the Nursing Clinic and clothing program, this decision did not hold very well with a lot of people and one member of the board resigned (Varley, 2013). The other part of the decision was to do the pilot of moving 20 “chronically” homeless people to supportive housing. This pilot was found to be successful and gave Downie the idea to present a restructuring of the organizational strategy; Downie trusted her gut after it was backed up by some hard numbers. Downie and Board Chair Bane are forced with persuading the other board members and the staff to change the structure to more supportive beds and less shelter beds. Downie and Bane did a great job of playing devil’s advocate and coming up with objections and questions they may encounter with the new plan. One of those objections is dealing with the board and the staff being caught in the status-quo trap. People want to stick with what they know and what has been there. They want to stay with what has worked and don’t want to go against the past. (Hammond 1998) The number that the length of stay study provided and the results of the pilot test show that the move to more supportive housing will work and more funding will be available and used efficiently. Pine Street Inn has always changed over the years and adapted to the social climate (Varley, 2013). This is yet another change that needs to be recognized and made for the betterment of Pine Street Inn.
Alternative Actions:
Downie can present the numbers of the pilot test and the length of stay study to the Board and show them how the funding will be used more efficiently with the switch to the supportive housing. Downie would also set a plan to continuously update and report the numbers to the board. This would give the hard numbers and show that, should funding continue, this would work. It would also show that there would still be enough shelter beds and space needed if there was an influx. The risk here is that the funding will not continue. Downie can go to the key decision makers on the political end to help ensure that funding will continue to go the way that it is. This would give Downie the political card in her pocket to take to the board to ease their mind that funding will be there. This may reveal an answer that does not work for the shift and with no leverage to take back to the board.
Downie can also go to the key decision makers on the political side and find out what is being done for other housing programs. This may help ease the minds of the board members who are at odds with putting drug addicts and alcoholics in homes over families in need. This would help the moral weight that is on the board members and staff. They want to help the homeless people, but they also do not want to take homes away from those families who need it and have been waiting for it. Downie could have Bane influence as many members needed to pass a vote and not worry about the others. This will work enough to have the strategy change for now, but will always hinge on the majority of the board to be on Downie’s side. This also may cause a huge rift between board members and staff and lead to a downfall of Pine Street Inn.
Downie can allocate more funds to fundraise and bring in additional money. This would mean taking money away from another area or rely on enough funds raised to cover the area the money was taken away from and add additional funds overall.
Recommendations:
My recommendations to Downie to persuade the board to change the long term organizational structure are; present the numbers of the pilot test and of the length of stay study. Show how these numbers prove that the “chronically” homeless guest take up 80% percent of the bed nights and this in turn takes resources away from other areas of the shelter. The pilot test number will show that the “chronically” homeless can make it in supportive housing and the funding for supportive housing is there for Pine Street Inn to take advantage of. I would also recommend that Downie be involved on the political end and fight for the funding to stay towards supportive house and show the board her staff is fully committed to making this work. Downie would make the presentation of the numbers in the next month. She would also lay out a plan to the board to continue to show were funding was being spent every quarter for the first 5 years; then bi-annually for every year after five. The numbers that she would show would be; cost of leases they are paying for, damages, and how much the 24 hour support was being used. She would also need to report how many people are staying in the supportive housing and how many people are able to move on with living on their own. These numbers would help her squash the status-quo trap that some of the board members and the staff seem to be in. Downie would need to insert herself into the political side immediately. This would show she is committed to making this work and is standing up for the funding and where those funds are allocated. She has already made a bond with the city on the pilot program and showed them that it can work, so she needs to parlay that into more leverage to keeping the funding were it is at.

References
Varley, P. (2013). Budget Woes and Worse Ahead.... Pine Street Inn, Boston's Iconic Homeless Shelter, Re-thinks its Strategy (p. 17). Boston, Massachusetts.
Gary, L. (1997, December 1). Problem Solving for Decision Makers. Harvard Management Update. Boston, MA.
Hammond, J., Keeney, R., & Raiffa, H. (1998, September-October). The Hidden Traps in Decision Making. Harvard Business School Publishing. Boston, MA.
Chabris, C., & Simmons, D. (2010). The Invisible Gorilla (p. 306). New York, New York: Crown.