This month, we are looking at the importance of donations and giving to shelter operations. Nest Community Shelter and Nest La Porte receive grants to operate, and we are incredibly grateful for each one. Grants simply do not cover everything. This gap is why donations matter. Today we will talk about one of the highest costs, next to staffing: insurance.
Not optional, not negotiable
Running a shelter means caring for people through the hardest moments of their lives, and that work comes with enormous responsibility. Liability coverage protects the guests who come in for a safe place to sleep, along with the staff and volunteers who serve them. Property coverage protects the buildings. Other coverage lets us welcome volunteers, accept donated meals, and host the community partners who help guests take their next steps. Each piece is crucial for the health and safety of guests, staff, and volunteers.
Without insurance, there are no beds, meals, or volunteers. A shelter simply cannot operate safely or legally without it. It is as fundamental to Nest as the roof and the walls.
Necessary, but rarely funded
Grants are vital to how we serve our community, and we are grateful for every one of them. Most grants, though, are written for specific programs or projects. Insurance falls into what funders call overhead or operating costs, the everyday expenses that keep an organization running, and those are exactly the costs most grants and funding sources will not pay for.
Many funders and partners require proof of insurance before they will work with an organization, yet very few will help pay for it. Coverage is required, but the organization must pay for it on its own. Insurance, like many other services and goods, has seen an unprecedented rise in premiums over the past few years.
A cost that keeps climbing
Meanwhile, insurance has become one of the fastest-rising costs for organizations like ours. A January 2025 survey by Insurance Business found that, of 327 human services providers, half had seen their premiums double since 2019. The insurance brokerage Risk Strategies forecast increases of 15 to 20 percent in abuse and professional liability coverage for nonprofit and human services organizations in 2025, and 20 to 30 percent in umbrella coverage; only time and data will show whether this pans out, but we believe it is highly likely.
Those increases apply whether or not an organization has ever filed a claim, and they hit a part of the budget that grants largely leave untouched.
Funded by neighbors, so Nest can operate safely
Because grants rarely cover insurance for us or other nonprofits because it is considered an operating cost, Nest’s insurance is funded through donations. Gifts from individuals, families, businesses, and churches are often unrestricted, which means they can go exactly where they are needed to fund operating costs, including the coverage that keeps the shelter open.
A donation that helps pay for insurance will never be photographed and is rarely recognized publicly. However, these donations that go towards operating costs are why Nest can welcome guests safely, protect the people who serve them, and keep its doors open every single night.
All month long, we are sharing the funding gap not covered by grants and why this gap matters. While grants are vital to our programming and many of the services we offer, they rarely cover operational costs like staffing and insurance. As we move through the month, we will look at how grant cycles affect funding, the incidental items and situations that often arise when caring for people, and more. We invite you to follow along and learn about how vital services like ours are funded and the challenges we face.
