Self interest in a non profit wrapper

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Kelley Williams,  Chair Bigger Pie Forum,  April 18, 2015

“A riddle wrapped in a mystery inside an enigma.”  This is how Winston Churchill described Russia in the escalating run up to WWII.  He said the key was to understand Russia\’s self interest.  Conflict is escalating over a half way house (Bon Ami) for recovering addicts and rehabilitating ex convicts on East Northside Drive.   There are three other such houses in north east Jackson.   Homeowners are concerned about recovering addicts and ex cons as neighbors in rental houses and are fearful about property values and safety.   The half way house promoters are Oxford House Inc. and others with various self interests.   Their identities and relationships are something of a mystery.   Here are some of them.  Their motives don’t appear to be altruistic.

Oxford House is a Maryland based 501(c)3 non profit.  Its stated purpose is not stated but is described as: “a concept in recovery from drug and alcohol addiction.”  It is the umbrella organization networking 1800 Oxford Houses in 22 states and allocating resources to duplicate the concept “where needs arise.”  Apparently needs arose in north east Jackson.  According to its 2014 Annual Report: “All Oxford Houses are rented, ordinary, single-family houses in good neighborhoods.”   They are reportedly self organized and democratically run and adhere to Oxford House principles.   It sounds like they just happen like spontaneous combustion.  But they dongrants‘t just happen.  Something causes them.

Investors cause. They are caused by investors who buy houses and rent them for profit to an Oxford House entity which rents space/beds (not rooms) to the recovering addicts and rehabilitating ex cons.   The typical house has 6 – 16 occupants who typically pay $1,426 per month group rent.   The Bon Ami Oxford House renters pay $1,625 per month according to the Mississippi Department of Mental Health.   If its investors bought the house for $100,000 with 5% down and 20 year financing, the annual return would be about 100% on the $5,000 investment after mortgage payments, insurance, taxes, etc.   Investors often invest in multiple Oxford Houses.    No wonder.

Community organizers cause. They are caused by recruiters (think community organizer) employed to find, recruit, and organizer renters.  This takes training and experience and networking because recruits may be on the road or homeless or just getting our of prison or rehab.  The organizers may also help renters qualify for disability payments (to pay rent) and for special protected status under federal laws that exempt or appear to exempt them from local zoning ordinances.  There are typically two organizers for every six houses.  Each is paid $80,000 per year.  Oxford House spends 97% its $5+ million annual budget on salaries, fringes, travel and other program development expenses.   This includes legal fees that lead to settlements from communities that run afoul of a maze of federal laws while attempting to enforce local laws protecting neighborhood integrity and safety.  Oxford House seems eager to litigate to support its assertion that: “the inmates can run the asylum.”

Federal grants cause.  They are also caused by federal grants to Oxford House as a qualified “evidence based program.”   (This apparently means metrics show the program reduces recidivism.)  Oxford Houses in Mississippi are facilitated by the Mississippi Department of Mental Health.   It is the conduit for federal funds flowing to Bon Ami and the other houses in Mississippi.   It pays the organizers.  It appears to be the nominal monitoring agency for them and the houses.   However, its responses to questions about the grant money flows and how it monitors and assesses outcomes do not allay concerns about the safety and value of the program.

Oxford House exists on federal and state grants.  They provide 87% of its funds.   Private donations account for 9%.   It seems to be grievance driven.   Its grievance is: “…the rights of recovering individuals to live in good neighborhoods just like ordinary families.”  It reports fifteen cases under litigation in 2014.  It says it has been a leader in litigation  and intends to continue because: “… it is important not to let the hard-fought rights obtained in the past be eroded by indifference to discrimination.”   It plays the discrimination card in response to  concerns about neighborhood safety and integrity.   Meantime it spends 83% of its income on salaries, fringes, and travel for its crusading employees while down and out addicts and ex cons pay high rent to induce investors to help it grow.

Recidivism.  Oxford House reports 19% recidivism by its renters, 76% of which are ex cons.  This may substantially understate actual recidivism.  Evidently 19% recidivism meets federal evidence based standards.   But it’s of little comfort to neighborhood parents concerned about their children.   According to MDMH data the annualized recidivism rate for Bon Ami appears to be over 30%.   This does not seem to justify the program or MDMH’s involvement in it.  Maybe the grant’s expense allowances and resulting MDMH empire building they fund are irresistible.

Pawns. The addicts and ex cons look like pawns in an escalating conflict that pits Oxford House crusaders and investors against neighborhood property owners, parents, and tax payers.   It’s a conflict that Jackson doesn’t need.  Jackson already has enough damaged neighborhoods.   It\s a conflict Mississippi doesn’t need.   Mississippi already has enough divisive issues.    It’s a conflict that does not reflect well on the Mississippi Department of Mental Health.   MDMH can and should develop and support less destructive and more effective rehab programs.  Taxpayers should encourage and demand this.

The lure of easy federal grant money often leads to decisions with unintended destructive consequences.  See also Mississippi Power’s Kemper County Lignite Plant.

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