This AHURI Inquiry into the funding and delivery of programs to reduce homelessness in Australia provides the first comprehensive examination and assessment of the funding of Specialist Homelessness Services (SHSs) and other services assisting those experiencing homelessness.

Government funding is the dominant form of funding, accounting for 84.6 percent of funding provided to SHSs (those receiving funding from dedicated government housing and homelessness agreements).

Current levels of funding are below levels required to meet client demand, with only about one-third of services indicating that they are able to meet client demand with current funding.

Non-government funding sources, including philanthropic foundations and the corporate sector, fundraising, and sponsorship play a minor role in the financing of homelessness services. New forms of funding such as social impact investment and social enterprise revenue are yet to have their impact at the grass roots level, but with Australian governments supporting the development of funding options they are likely to be more prominent in the immediate future.

Given the high level of unmet need, it is important that additional funding sources supplement, not replace, government funding. Diversification can come with costs in addition to the obvious benefits and 80 to 90 per cent of services expressed concern over increased reporting requirements, excessive outcomes measurement, possible changes in focus due to funder demands, and conflict between services and funders in values and objectives. The ability of services to access non-government sources of funding is determined by service type, the size of the organisation and its fundraising capacity and geographical location.

Government homelessness programs examined do not have specific funding programs targeted to Indigenous homelessness. The cultural competency of homelessness services can vary and Indigenous people experiencing homelessness may not be receiving culturally appropriate support as a consequence.

Further areas for policy development include: (1) greater stability of government funding of homelessness services; (2) supportive measures to increase the level of non-government funding and to generate a positive environment for impact investment in affordable housing; (3) addressing concerns reported by services with respect to the costs of funding diversification; (4) early intervention and post-intervention strategies to reduce homelessness; and (5) integrated cross-sectoral, inter-governmental and cross-departmental government funding packages of integrated service approaches to achieve greater efficiencies.