Melville Charitable Trust sees giving as venture capital

Following his mother Dorothy's death, Frank Melville was charged with determining the best course for the Melville Charitable Trust.  While committed to having the fund strengthen communities while taking risks and supporting social innovation, the details of how to do that remained foggy.

Frank and his business partner John Gibb called friend Peter Goldmark for advice.  They wondered how this admittedly small family foundation could have the greatest possible impact on a community.  Peter, a trusted friend and neighbor of Frank's since childhood, happened to work at the Rockefeller Foundation. 

Peter's advice for them was simple: focus on one issue and remain uncompromising and diligent in keeping that issue as a focus. 

Homelessness emerges as compelling issue.  Looking around the region, Melville's board noticed both a rise in homelessness and a dearth in funders willing to take on this issue.  Melville identified homelessness as an issue they both cared about and could take innovative steps in addressing. 

The Trust engaged consultants at The Philanthropic Initiative to help them learn as much as they could about homelessness and to focus their philanthropic efforts. 

"Housing first" strategy captures Melville's attention.  Fortuitously, at the same time, homeless advocate Julie Sandorf was forming the Corporation for Supportive Housing (CSH) in New York.  Sandorf proposed a “housing first strategy” to end homelessness.  Sandorf believed that the best way to solve homelessness was not by addressing it on a night-by-night basis, but by developing service-rich housing projects that would stabilize families and allow them to address their longer term needs.

Housing first “is premised on the belief that vulnerable and at-risk homeless families are more responsive to interventions and social services support after they are in their own housing, rather than while living in temporary/transitional facilities or housing programs.”  As an alternative to the current system of emergency shelter/transitional housing, housing first methodology provided supportive permanent housing with the belief that stable housing would allow families to regain the self-confidence and control they had lost upon becoming homeless.

Experimenting and learning.  As the two like-minded, youthful organizations were starting out in the early 1990s, Melville's board and CSH's Sandorf found one another and discovered their shared focus on the homeless population in Connecticut.  The Trust committed to working in Connecticut's communities and utilizing this experience as a laboratory to shape model programs for ending homelessness. 

In partnership, CSH and Melville began mobilizing state agencies, social services, mental health counseling, correctional workers, and philanthropists into a collaboration of homeless advocates.  From this collaboration, a state-wide interagency task force emerged, with the support of then-governor, Lowell Weicker.  Unfortunately, the governor had no money to support the task force.  While a risky proposition, Melville Trust knew it was time to get their feet wet and agreed to fund the work of the task force.

At the same time, the Melville Trust began making programmatic investments, buying property to be developed into supportive housing projects for the homeless.  Melville was uniquely positioned to supply the flexible cash that developers and service providers could not find elsewhere.

As executive director Bob Hohler explains:  “Connecticut is our Petri dish. If we can make things work in Connecticut, they can work anywhere.”  While committed to long-term support and to risk-taking, Melville is just as committed to rigorously analyzing every investment it makes, viewing philanthropy as social venture capital. 

Melville looked to nonprofit innovators in its early grants, both to build knowledge in the field and to learn as much as it could about how to make wise and prudent grants.

St. Luke's Lifeworks represents Melville's learning laboratory

With a commitment to experimentation and learning, Melville Charitable Trust made one of its first grants to St. Luke's Lifeworks in 1991.  St. Luke's proposed developing a transitional and supportive housing program for mothers and children.  Melville purchased a failed YWCA project and building in downtown Stamford with a $1.5 million program-related investment or PRI.  

Risks reap rewards.  Shortly after Melville's show of support, St. Luke's was selected in 1993 to create 60 units of supportive housing as a part of the Connecticut Supportive Housing Demonstration Program, a public/private partnership led by CSH. 

Melville's early investment not only paid dividends in the community, but helped both St. Luke's and Melville learn first-hand the complexity of housing strategies.

Eleven years and many success stories later, St. Luke's now provides housing options and services at 16 locations throughout Fairfield Country.  Currently working toward the goal of creating 350 units of permanent supportive housing through their subsidiary, the Fairfield Community Development Corporation, St. Luke's provide housing, education, direct care and advocacy. 

After playing such an important role in piloting St. Luke's efforts, Melville remains dedicated to St. Luke's and their mission. Since 1991, Melville has invested nearly $5 million in the organization. 

Lessons learned.  Through his experiences with the success of St. Luke's and many other grantees,  Frank Melville became committed to the notion that philanthropists can play an important role in piloting innovative approaches to addressing social issues.  The responsibility after that point, however, must be shared.  “Philanthropy can experiment and test, working in partnership with government to find the best solutions, but the plight of the homeless is a societal responsibility which the society as a whole must be asked to meet,” Melville has written. 

Since the Melville Charitable Trust chose Connecticut and homelessness as its starting point in the early ‘90s, and as it looks to address homelessness throughout the U.S., the Trust has learned that the most effective philanthropy is diligent and committed to long term social change. 

Melville's executive director Bob Hohler believes foundations are most effective when they do not attach a stopwatch to a grant.  Hohler has learned that some projects need years to develop.  Successful programs might have never been had Melville arbitrarily withdrawn support at the end of a certain time period. 

Hohler now sees other grantmakers approaching homelessness with the housing first strategy, replicating Melville's early success and affirming Melville's patience and commitment.

A willingness to invest in new ventures, even while remaining steadfastly focused on housing and homeless issues, has been the key to Melville's learning and success.