Creating Safe Spaces for Everyone with the Support of a Reliable Accounting Partner
Each year, more than 567,000 people in the United States experience homelessness. That staggering number represents a massive problem on its own, but when compounded by other issues such as mental illness and drug addiction, it becomes a kind of stew in the streets of urban centers across the country. No one quite knows how to deal with it. When people feel desperate and in danger because public space has been overrun by certain activities, they call us.
Founded in 2018 out of San Francisco’s Hunters Point Family neighborhood organization, works to bring a sense of peace and respect to America’s most chaotic urban areas that struggle with extreme poverty, addiction, mental illness, and hopelessness. We’re not security, and our work is not about running people out of public spaces. We work to eliminate certain behaviors, activate the space to engage the community, and address quality of life issues, including offering basic services like toilets and showers. We are the only people in this city who showed up for homeless people at the start of the COVID pandemic when the shelter-in-place order came down in California. We founded the staffed an additional 15 (24 hour) public toilets, 24 handwashing stations, 12 mobile showers, and four shelter-in-place hotels, to respond.
Many members of the public feel threatened by people who experience homelessness, who might be dirty or who might yell things while walking down the street. It’s important to remember, though, that it’s these people who are the most vulnerable, who are beaten, robbed, raped, and victimized. They’re hurting, and what they need from others is compassion and a certain level of emotional intelligence. That’s what Urban Alchemy brings in our quest to create safe spaces for all
Our mission is rewarding, but behind the scenes, the challenges can be quite exhausting.
The Challenges Behind the Scenes
Like many other nonprofits, we had our operational struggles. The first of our two major issues was training.
In this line of work, people will challenge you. When someone challenges you, you can’t lose your cool by responding with irritation, hostility, or impatience. The vast majority of our staff are master negotiators with a high emotional intelligence quotient; however, it takes only a few who don’t understand and react to create a black eye for the organization. We also have to bring folks up to speed on current standards and expectations.
Our other major issue was that of cash flow—but not for lack of clients. Society at large may finally understand that it’s not appropriate to call the police on homeless people. But what do you do, then, when people set up camp right on your doorstep? So many organizations, from municipalities to universities, retail to nonprofits, come to us, and usually they are desperate for someone reliable who they can trust.
All these organizations want our services, but the problem is that most of them are reimbursement-based contracts. That means we do the work first, and then we send them an invoice. Meanwhile, our payroll is, on average, $900,000 every two weeks. When people take a month or two to pay after services are rendered, it’s tough to plan ahead.
We had financial issues that stemmed from that cash flow problem. The billing, the payroll, the insurance—it was all starting to get out of control. We’d had an accountant help us part time when we were getting started, but she had a full-time job of her own, and we were expanding so quickly that we needed more help. Finally, the city of San Francisco offered to pay for a consultant, Mike Anderer, to help us get our infrastructure together. Mike then suggested .
A Partner Who Doesn’t Overstep Their Bounds
I didn’t know much about Armanino going into this. I learned that they are considered one of the top accounting and business consulting firms in the country—but I’ll admit I was still somewhat skeptical. Competency definitely wasn’t an issue and they were strongly recommended by Mike and others. I even liked the platform that they showed us for billing and accounting.
But I have decades of experience in the nonprofit world, and I think other leaders of nonprofits can relate to accounting people who have turned into tyrants, who overstep the purview of their authority because they ultimately control the purse strings. I hire someone to take care of the finances, not run my organization. But very quickly, you can find yourself in a dysfunctional relationship with an accountant because they control everything, and ultimately, you need them, so your hands are tied.
I’ve seen this over and over in nonprofits, and I shared this with Armanino when I met with them. They reassured me that they were not into “kingdom building.” As a consulting firm, they don’t want to control all the finances. And if one of our point people at Armanino left, others could step in without missing a beat. That’s what I needed to hear.
Once we got our Armanino team, our main point person has been Kate Hultin-Schott, and she has been a wonderful advocate and champion for us. The nature of our work means we can’t take a day off. You can’t say, “Well, it’s Christmas, so homeless people don’t get toilets today.” We never stop working. Kate is someone who understands that grind, and grinds right along with us. She’s a proactive problem solver who sees issues in advance and addresses them immediately.
Given that cash flow was an issue, I need someone to communicate with me well in advance if they foresee any issues around payroll, for example. Telling me about an issue the day before payroll is due doesn’t help me. Kate understands that. It’s refreshing to know I have someone behind me who has everything under control, and if we need to make calls to collect payments, we can coordinate that. That frees up my time and energy as CEO to focus on other, big picture concerns, which is how it should be.
Paying for Confidence
Armanino has been wonderful these past few months both helping us with our HR difficulties and improving our payroll processes. They helped us with training, which, as I mentioned, is an essential part of our organization. With Armanino’s help, we’ve established an evaluation process so employees receive feedback on how they’re doing as they learn the rules and progress through the training process.
They had to do a lot of cleaning up to load our books to the billing and accounting system. That work is ongoing, but their platform allows us to drill down into our finances. I’m starting to feel that we have more control over cash flow.
Our relationship with our vendors is also drastically improved because they always have someone they can call to communicate about financial issues. Working with Armanino has changed our dynamic with clients who might have been unsure of the professionalism of Urban Alchemy. No one can tell Armanino that we don’t have our financial house in order.
That leads me to the more intrinsic benefits we receive from Armanino, in addition to their services. From the beginning, Mike stressed to me that part of what we were paying for was confidence. Some people look at our organization with prejudice, whether it’s because our organization is primarily Black, because we employ former offenders, or simply because we are a nonprofit that works with the homeless population.
It’s often assumed that if you’re of, or work with, an underprivileged group, somehow you don’t understand business. Not everyone feels that way, but people frequently talk down to us or constantly second-guess everything we do. It’s also unfortunately true that not everyone we work with has the same altruistic motives as us. There are organizations that will not hesitate to take advantage of Urban Alchemy financially if they see an opportunity to do so.
Since we began to work with Armanino, it’s like we’ve been given a shield of armor. People don’t argue with us anymore—they argue with our accounting team at Armanino. Once others know that we have a solid service provider supporting us, one with such a great name and reputation as Armanino, they think better of us. Investing in those big guns was worth it.
Strong Support for Important Work
There is no silver bullet to ending homelessness or the chaos it creates in our communities. Thankfully, there are a lot of organizations like Urban Alchemy that are doing their part. No matter how hard you work or how good your intentions, though, HR and financial problems can kill your business. Working with good partners like Armanino can improve the back end of your business and increase your capacity to do even more.
My word of advice to anyone facing similar challenges is that if you’re going to spend on anything, spend on your financial systems. Working with professionals like Armanino isn’t free, but they have taken a weight off my shoulders. Now I can tackle the day-to-day actions that improve neighborhoods, and make life better for all residents.