Palo Alto Weekly

News - July 13, 2012

InnVision merges with Shelter Network

New agency expects to serve 20,000 homeless people from San Jose to Daly City

by Sue Dremann

InnVision, Santa Clara County's largest nonprofit organization serving the homeless, has merged with Shelter Network of San Mateo, the two agencies announced Tuesday, July 10.

The new agency, called InnVision Shelter Network, will become one of the largest providers of transitional shelter and housing in the state. With a $16 million budget, it expects to serve more than 20,000 homeless families and individuals in at least 20 major sites throughout Silicon Valley and the Midpeninsula, organization officials said.

The merger is the latest in a trend of nonprofit organizations forging new partnerships and collaborations in order to survive. Donations plummeted after the 2008 economic crisis, and many organizations have not been able to recover, the heads of foundations and nonprofit groups have said.

InnVision, which formed in 1974, had a roughly $7 million budget last year and sheltered 4,000 to 6,000 people, according to the agency. Among its programs, the organization runs the Opportunity Center in Palo Alto. It also served thousands more at-risk and low-income through food, counseling and other programs at two dozen sites, agency officials said.

Shelter Network last year served 4,600 clients in San Mateo County through six facilities with an $8 million budget. Founded in 1987, the majority of its clients are families and veterans.

Shelter Network CEO Karae Lisle will run the merged agency. InnVision CEO Christine Burroughs has retired after 24 years but remains a consultant for the new organization.

Burroughs said she approached Shelter Network last fall about a merger.

"It was a combination of factors. I decided it was time to step down. I felt with the economy being what it is, it would be better to partner," she said by phone last week.

InnVision had been struggling financially for some years. Net assets for the years ending June 30 dropped $220,672 in 2008, rose slightly in 2009, then plunged $626,188 in 2010 and by $1,011,862 in 2011, according to financial statements. An independent auditor did not find any deficiencies in InnVision's financial reporting.

Burroughs offered perhaps a prescient outlook on InnVision's future in May 2009 during an interview: "I'm on pins and needles, to tell you the truth," she said.

On April 30, 2011, the organization closed the Clara-Mateo Alliance homeless shelter on the grounds of the Veterans Affairs' Menlo Park campus because of the lean economy, she said at the time. The shelter offered transitional housing for families and single adults, and 67 percent of the single residents were veterans.

Lisle said the merger offer came at a time when Shelter Network was looking to increase its ability to house people. Over the past two years, an average of 50 families and more than 70 individuals have been turned away every night for lack of space, she said.

"With more than 18 major facilities, we can increase the capacity of the people we serve by three-fold. ... We don't have to start from scratch," she said.

San Mateo County provides families with children with a hotel voucher if there is no room at a shelter, she said. But that does not achieve the goal of getting them into a stable environment and then permanent housing. The merger will allow more people to quickly gain access to shelter and housing at a fraction of the cost, Lisle said.

Both agencies hold similar philosophies, she said. Both have a no-tolerance policy for drugs and alcohol and offer comprehensive services such as counseling for drug and alcohol addiction, unemployment and mental illness.

Approximately 60 percent of both agencies' homeless clients are families, and of those more than half are children under age 18. Roughly 40 percent of transitional-housing clients are single adults, spokesperson Maria Duzon said.

While InnVision charged fees for shelter, the new organization is offering shelter at no charge. It will adopt Shelter Network's "Beyond the Bed" program, in which clients must work toward an education, job and saving 50 percent of their budget for housing and other essential living expenses. More than 90 percent of families graduating from "Beyond the Bed" have found and maintained permanent housing in about 120 days — less than half the national average.

InnVision's clients stayed in shelters slightly longer than the national average of 232 days, Duzon said.

Lisle said she plans to hire 10 to 20 more caseworkers to aid clients. There are no planned staff layoffs or program closures.

Palo Alto services are not expected to change, she said. The agency has just renewed a contract with the Opportunity Center for another five years.

The merger did not come as a surprise to leaders at the nonprofit Silicon Valley Community Foundation, which has provided grants for InnVision's food and housing programs for the past few years.

"We were aware that the merger was happening," said Erica Wood, vice president of community leadership and grant making.

In 2008 the foundation held a conference that predicted many nonprofits would look for new partnerships in order to survive.

Porcia Chen Silverberg, executive director of Thrive: The Alliance of Nonprofits for San Mateo County, a membership organization, said the financial crisis for nonprofits is not over.

Providers of "safety net" services, such as InnVision, initially received boosts from donors to help close funding holes in 2008, she said. But in the last couple of years people have pulled away from giving, although it's not clear why.

"It's not getting better any time soon, even though the economy is getting better and starting to turn around. It's just like city governments. You see fire departments are merging between cities. Funding is being cut in every direction," she said.

Silicon Valley Community Foundation is itself the product of a merger. It formed from Santa Clara County-based Community Foundation Silicon Valley and Peninsula Community Foundation in San Mateo County in 2007.

CEO and President Emmett Carson said last February that it took time to rebuild the trust of donors, some of whom feared the merged foundation would no longer fund the projects they supported. Lisle said she is aware of that similar challenge for InnVision Shelter Network, but Silverberg lent her support to the merger.

"Their missions align pretty well," she said.

One of the biggest challenges is creating one board of directors out of two organizations. Board members are deeply passionate about their own organization, and sometimes boards can't reconcile those differences. That's a big reason why mergers can fail, she said.

"That these two boards are willing to come together — that says a whole lot to me about this merger," she said.

Dan Coonan, InnVision board president, said he supports the merger.

"Karae is absolutely the perfect person to carry on the tremendous work Christine has been doing for decades in this area. ... It is a very good day for this critical cause in the Bay Area," he wrote in an email.

Staff Writer Sue Dremann can be emailed at sdremann@paweekly.com.

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