Can a Social Entrepreneur End Homelessness in the U.S.?

BRIAN KENNY: How did you start your day? Chances are you climbed out of bed and poured yourself a cup of coffee. Maybe you caught up on the news. Then you might have gotten the kids off to school or hit the gym. I’ll bet you had a long hot shower at some point, but what you probably didn’t do was wake up in a shelter or under a bridge, gather all your worldly possession, wash in a public toilet and hit the streets in search of shelter and a meal. That morning routine is reserved for the more than half a million people who are homeless, meaning they lack stable, safe adequate housing. That number has risen steadily each year since the 1980s. Bloomberg reports that the economic disruption triggered by the pandemic could lead to a 45% spike in the coming years. The numbers are hard to fathom, but more importantly, behind each of those numbers is a personal story of a man, woman, or child whose life has come undone. Today on Cold Call, we’ve invited Brian Trelstad to discuss his case entitled, Community Solutions. I’m your host, Brian Kenny, and you’re listening to cold call on the HBR Presents network. Brian Trelstad’s teaching and research focuses on social entrepreneurship, systems change, impact investing and the role of business and society, all of which are really important topics that I think surface in this case, Brian. So thanks for being here to talk about it with us.

BRIAN TRELSTAD: It’s great to be here, Brian.

BRIAN KENNY: It’s a poignant case in so many ways and I tease that a little bit in the introduction, but this is a really serious epidemic social crisis in the United States. We’re going to focus on the US in this case, but it’s a global issue. So thanks for writing the case. I think people are going to learn a lot from hearing you talk about what Community Solutions is doing. So let’s just dive right in.

BRIAN TRELSTAD: Sounds good.

BRIAN KENNY: Tell me, I know you recently taught the case, did you say yesterday?

BRIAN TRELSTAD: No, a couple of weeks ago.

BRIAN KENNY: Couple of weeks ago. Okay. So you’ve got the discussion fresh in your mind. I’m curious as to how you start the case off. So I’d like you maybe to, just what’s the central issue in the case. And then what’s the cold call you asked to get the conversation going?

BRIAN TRELSTAD: Well, we wrote the case on Community Solutions to try and unpack what it takes to create systems change. Social entrepreneurs have been focused on building their single organization. What’s remarkable about Rosanne Haggerty and Community Solutions is how she’s built a national program, extra organizationally. It’s also a testament to her persistence in attacking the problem of people experiencing homelessness over the course of her career. Having graduated from Amherst College, she worked in social services in New York and her signature achievement, when I think she was still in her twenties was to launch the Times Square Hotel, which was an iconic 600 room, mixed income, mixed use hotel that was converted into supportive housing in Times Square. That’s her first foray into this issue. I ask students as we open the case, how do we think about the evolution of Rosanne’s career from the Times Square Hotel to Community Solutions today? And so it’s not your typical cold call right or wrong, do you buy the company, sell the company? But we’re really trying to understand how has her approach evolved over the course of 30 years.

BRIAN KENNY: Yeah. We’re going to dive into that quite a bit in our conversation, but first tell me a little bit about why you chose to write this case and how it relates to the kinds of things that you think about in your research and in your teaching.

BRIAN TRELSTAD: Yeah. I wanted to write the case in order to profile one of the more successful organizations in the United States as a winner of the MacArthur Foundation’s 100&Change grant, it was through a peer review process selected from one of over 450 nonprofits that had a demonstrated pathway to solving an important public problem. And so I thought that that was in its own right worth studying. But again, an example of an organization that has tried to tackle a problem at its systemic roots rather than at its symptomatic roots. In fact, the evolution of her intervention from just the housing to, it’s actually not really about the housing, it’s about the supportive services, and it’s about the speed of catching people who fall into homelessness and providing those services in a comprehensive way that is about the Community Solutions approach.

BRIAN KENNY: Yeah. I think obviously the backdrop of management practice and the role of business and society looms large here, this is something that Harvard Business School has focused on for a long time, continues to focus on in different ways. So I would imagine that factors heavily into your thinking around this as well.

BRIAN TRELSTAD: Yes, it does. I think one of the shifts, however, is that the conception to some extent of the social enterprise field was, how can we bring business skills to the nonprofit sector. What I think Rosanne and Community Solutions offer is a chance for business to learn from the art of nonprofit execution. The way that she approaches those who experience homelessness, the pivot points in her career as she began to observe that the solution she thought worked wasn’t working, I think are skills around stakeholder management and user design that any business can learn from.

BRIAN KENNY: Yeah, that’s a great distinction. I sort of, again, in the introduction tried to paint a little bit of a picture of what homeless is like at a personal level. Could you just talk a little bit about the definition of homelessness and the landscape of homelessness in the United States?

BRIAN TRELSTAD: What’s an important distinction—one thing that I learned by writing the case—was the shift in how folks like Rosanne and her colleagues describe those who are experiencing homelessness. So it’s not a permanent condition. That person is not homeless. That person is somebody who’s experiencing homelessness. We’ve begun that the causes are often healthcare crisis, addiction, post-traumatic stress among veterans, domestic violence with women and children. And so what we’ve begun to appreciate is the many causes of homelessness and that many Americans are in fact just a flat tire away or a health care bill away from falling into a position where they cannot afford to live in permanent housing. And so homelessness is the experience of not having a place to call home. It means not having an address to put on forms for employment applications. It means not having a place to secure your materials. It means not having a place where you can take care of your health needs and your family, if you need to. I think it’s a continually evolving definition, but the shift from, it’s a permanent condition from them to it could be any one of us experiencing homelessness is a mental model shift that’s a profound one.

BRIAN KENNY: Yeah, indeed. People have been trying to fix this problem for a long time. There have been many things that have been tried. Obviously, we haven’t figured out how to solve it completely, but maybe you could talk a little bit about some of the ways in which we’ve approached this in the past.

BRIAN TRELSTAD: The obvious solution is we just need more affordable housing. In some expensive cities like Boston, San Francisco, Seattle, New York, Chicago, that is a huge problem. In most communities, it’s not the case. There’s ample federal support through HUD, the Housing and Urban Development, that provide through a network of regional agencies called Continuum of Care organizations, the vouchers that you need to find housing. What’s really missing and what Community Solutions tries to plug the gap is the ability to reach that person at their moment of need with the right set of support services, and to put them in housing, which might be available in the market where they live, and to do that quickly before their condition deteriorates further and further and further and it becomes harder and harder to put them into supportive temporary or permanent housing.

BRIAN KENNY: It’s funny, because we’ve had other cases that we’ve discussed on cold call before with faculty who have written about the healthcare industry. And it’s very similar to what you’re describing. If you intervene in someone’s healthcare issues early on, then you can really help them to find the right course on a permanent basis. This sounds similar.

BRIAN TRELSTAD: That’s right. The social workers that are part of the Built for Zero campaign get to know those who are experiencing homelessness by name and talk to them every day. It’s about identifying people who might be at risk of falling into homelessness.

BRIAN KENNY: So let’s dive in a little bit to Rosanne. I want to hear a little bit about her background and common ground, I think was one of the places that she began on this journey of trying to address this issue. So what’s Rosanne all about?

BRIAN TRELSTAD: Rosanne is a classic social entrepreneur in my mind, in that she has been working in this issue of homelessness for her entire career. She graduated from Amherst College in the early eighties, started working for a social service organization in New York and had a big, bold idea to convert the Times Square Hotel into this iconic homeless shelter. She was successful with that. It was a multi-million dollar, I think 25, $26 million project, but she was humble enough to realize that it didn’t necessarily work. And so she began to, again, listen carefully to the people who were experiencing homelessness and to try and understand what it would take. She also is an insatiable learner. One of the healthcare campaigns, the 100,000 Lives Campaign that the Institute for Healthcare Improvement ran trying to reduce unnecessary medical errors to zero, led by Don Berwick here in Boston gave her the idea that maybe what we should do rather than build housing is just get people into existing housing. So the next stop was this campaign, short-term, high profile. Let’s see if we can actually make dent, 100,000 out of the 500,000 is a material dent in the problem nationally. That worked. And she’s a successful executor and operator, but always one that is dissatisfied because the problem persists. So she keeps moving in this case upstream further and further. In my view is representative of the best kind of social entrepreneurs who are passionate about a problem, and they’re going to orbit that problem and look at it from as many different directions as possible and they’re going to pivot their solution. Oftentimes a for-profit entrepreneur is going to have a solution and they’ll pivot to a market where they try to find the product market fit. But in many cases, the product remains the same. They’re just trying to find the market. In Rosanne and with many social entrepreneurs, they are focused on that problem. She will continue to work on ending homelessness and convincing us that it might in fact be possible in the United States to end homelessness in our lifetimes, but she’s going to continue to pivot the solutions. And so while I think Community Solutions is one of the most successful examples of a philanthropy, again, as deemed by the MacArthur Foundation’s, 100&Change contest. I would be surprised if Rosanne does not continue to push forward using the MacArthur funding towards new solutions, which keep pushing the field even further ahead.

BRIAN KENNY: What is she like as a manager? I’m always curious about entrepreneurs because they learn by doing. I’m wondering what her team would say she’s like.

BRIAN TRELSTAD: I had the privilege of meeting several of her team, and she was always inclusive of them. My sense is that she is a humble leader who gives great people the opportunity to build and run what they think needs to be done. As evidence of this, in doing some of the research there was a great 60 minutes piece in 2014 on Community Solutions in its early days. For most social entrepreneurs, the 60 minutes phone call is the, “we’ve made it.”

BRIAN KENNY: Absolutely.

BRIAN TRELSTAD: I had to watch the piece twice because while I think Rosanne was mentioned, she wasn’t on the show. It was her team. I believe it was Nashville, Tennessee that was profiled, and it was all her regional staff. That kind of humility to me is a mark of an exceptional leader who gets people who just want to do the work and gets out of the way.

BRIAN KENNY: Let’s talk about Community Solutions then, how did it come about? I’m curious as to what makes their approach different than what others have tried before?

BRIAN TRELSTAD: Community Solutions really grew out of Common Ground, which was the nonprofit that Rosanne founded in New York in the late eighties or early nineties. Forgive me, the chronology. But after the 100,000 Homes Campaign, I think Rosanne realized that it was important to leverage the entire ecosystem in a community around coordinating service. Her observation was that there were a lot of people working on the problem, but nobody taking responsibility for the end beneficiary and trying to solve the problem in a geography. Maybe not as many resources as needed, but enough to at least do better than one could do. And so she made a decision to spin out Community Solutions as an independent organization that would focus on these tactics and techniques of the by-name list and these registries and these dashboards, which really use data to enable existing ecosystems of social service providers, whether that’s a homeless shelter or a soup kitchen, mental health agency, and addiction support service to coordinate their care in a way that they hadn’t been able to before. A lot of their work is really demonstration of best practice, which is convincing folks over whom Community Solutions has no control. It’s not as if they’re planting a Community Solutions affiliate in Abilene, Texas, they get the Continuum of Care organization in Abilene to say, we really believe in this methodology model we want to learn from. And so Community Solutions does trainings, equips people with the tools to do the by-name list and use the dashboards and provides support. The MacArthur Foundation, I think, recognized that by giving additional support, Community Solutions could reach even more communities with this kind of playbook.

BRIAN KENNY: Yeah. So they’re leveraging the existing infrastructure that’s out there with groups that are already set up in one way or another to help the homeless in their area. They know the local geography, they kind of know the local people, so they’re probably best situated to intervene early on.

BRIAN TRELSTAD: That’s right. It’s by providing evidence-based approaches, particularly with veteran and chronic homelessness that Community Solutions is invited in. They don’t have to go into your community, but the communities recognize, hey, we’re short on resources and talent. This seems to work. We want to opt in and bring them here. I think that opt in, bring them here mentality has been part of what has spread Community Solutions into the 80 some communities that they’re working in today.

BRIAN KENNY: Yeah. What kind of receptivity do they find within the homeless population itself? Because we hear a lot about people who are homeless for one reason or other don’t necessarily trust the system, what makes this different in their eyes?

BRIAN TRELSTAD: That’s a great question. I think one of the limits of our case writing in COVID has been the challenge of not being in the field as much as we would’ve liked. So, I would’ve loved to have had more time to spend with both the field staff, as well as those experiencing homelessness. My sense from having done some of the conversations with the affiliates that they work with, again, it’s not introducing a new organization, but rather using the existing resources to ask what do you need and how can we make sure that you get that? If it means not going to a shelter, that’s fine. Is there temporary housing that we can put you in that you would feel comfortable in? What are the resources that you need to begin the journey back to either, managing substance abuse disorder, or beginning to think about employment opportunities and giving agency back to those experiencing homelessness to: what do you want to do? We’re not going to prescribe a solution for you, but rather we think you can be safer, healthier someplace else and let’s figure out what that is for you, and let’s figure out how to get you there.

BRIAN KENNY: That seems like a key distinction, sort of empowering people to figure out what their own course can be and then helping them get there.

BRIAN TRELSTAD: That’s right.

BRIAN KENNY: Yeah. So, let’s talk about the MacArthur grant, because I hear them all the time on NPR. I don’t know a lot about the MacArthur Foundation, but it sounds like they’re some supporting some really important things. This seems to have been a huge deal for this whole team and the work that they’re trying to do. I mean, how big of a deal was it from your perspective?

BRIAN TRELSTAD: The MacArthur Foundation is a tremendous philanthropy. John T. and Catherine D. MacArthur Foundation has been around, I don’t know, over 100 years, but has really emerged as a leading philanthropic foundation, perhaps best known for the MacArthur Genius Awards of which Rosanne was one for the Times Square Hotel, in the nineties. But about, I think a decade ago there was this recognition that there was an opportunity to find and fund scalable solutions. And so the 100&Change competition was launched every other year to see if there were a handful of interventions that if given a once in an organization grant could change their trajectory and solve a problem.

BRIAN KENNY: And the hundred by the way is a hundred million.

BRIAN TRELSTAD: A hundred million dollars, right.

BRIAN KENNY: That’s a lot of money.

BRIAN TRELSTAD: It’s a lot of money. I believe Community Solutions budget before then was about 20 million a year. So this is game-changing capital. The final conversation with the students is, okay, how do you spend the money? You could either not fundraise for a number of years so that Rosanne could focus on building program or you could catalyze an impact investment fund, or you could invest in policy. And the total ask gets you to up to about $150 million. It’s a question about where do you prioritize your bets going forward? But I think the process by which MacArthur enlisted a huge number of peers in the space, they attracted over 450 applications. Through this six or nine month process, winnowed it down to a handful of finalists does reflect that it was a well thought through intentional process, and that Community Solutions emerged on the other side as one of the few organizations that could both demonstrate the effect that they claim to have. And, two, that the capital if invested in them would lead to real measurable change.

BRIAN KENNY: Yeah. I’m wondering, so they must have been able to show some efficacy for their approach. What are the kinds of things that they measure as they try to demonstrate that what they’re doing really works?

BRIAN TRELSTAD: So, in the work that they do in the cities where they work, they’ve targeted veterans and chronic homelessness, and that’s just a subset of the population of those experiencing homelessness. But what they’ve tried to get to is using by-name registries and daily censuses to understand that there will always be somebody new coming into homelessness, that we can’t stop the flow. Bad things are going to happen to people who are living on the margin. The most important thing to do is identify them quickly and get them into supportive housing. And so their definition of functional homelessness is the flow into placement greater than the flow into homelessness, or the flow out of homelessness greater than the flow into homelessness. By achieving that in the particular community, they declare that we’ve achieved functional zero, which is a statistical definition. Again, doesn’t mean that there may not be any homeless people in Abilene, Texas, but it means that if you do fall into homelessness, there will be an infrastructure that has the capacity to get you to where you need to be within a matter of days. And that, they’ve been able to do that in about 80 communities in veteran and chronic homelessness. I think one of the questions in the case is, are they targeting slightly easier to identify smaller subset where there are more resources available to them than say families experiencing homelessness or youth homelessness. That’s one of the debates, is should you go deeper in the communities you’re already in to reach those, or should you continue to reach and try and end veterans homelessness? They have not had a huge amount of success here in Boston with the Mass. and Cass example, or in San Francisco or in Seattle, there’s a level of visible homelessness that Community Solutions has not yet, in my observation, been able to tackle. In part, that’s where you begin to get up against the affordability problem. In most of the communities where they operate housing availability and affordability is really not the constraint. It’s about identifying people and getting the resources they need to move into the housing. In a city like Boston or San Francisco, housing affordability and availability is a problem.

BRIAN KENNY: Yeah. I would say Mass. and Cass for our listeners who don’t know is an area of Boston, where basically it became an encampment of addicted people who were publicly using and selling drugs. It was a situation that took quite a while for the City of Boston to figure out how to move those people and find some adequate housing for them. That’s still an ongoing issue. If you look at the MacArthur Foundation, the hundred million dollars is such a huge, highly visible vote of confidence in what they’re doing. Does that give them some leverage where it comes to public policy?

BRIAN TRELSTAD: Yeah. I think that’s one of the priorities, is to figure out how to actually pull levers of policy at the state and federal level. The funding for homelessness in this country is principally at the federal level. The question is how can the experience of Community Solutions inform what HUD does vis-à-vis homelessness? Perhaps the area of greatest opportunity is that the way that Community Solutions approaches its registry is fundamentally more advanced than the way that HUD does, and could. They help HUD improve and work on the system by which it collects data on those experiencing homelessness, and simply the time for Rosanne to spend influencing policy makers and legislators. So not having to raise the incremental three or four million dollars a year of philanthropy means that she might be able to spent time and her team building the evidence-base and meeting with policy makers to make the case that now is the time. It gives her a huge opportunity in window, although one I think that the team is nervous about. Compassion fatigue is something that when Rosanne and her colleague Jake McGuire visited our class, she was worried that there, because of the gift in this moment in time that they needed to move quickly in order to cement policy victories before public policy attention got diverted to other areas.

BRIAN KENNY: So a lot of this must lead them to feel like they need to educate our political leaders. I would imagine that educating the community is also important. I think I’ve already, just from this conversation with you gathered some insights that I haven’t thought of before about homeless people and how they end up there. Do they spend time thinking about it? How do we help people come along with us on this journey so that they really understand that this is a problem that affects, could be their next door neighbor, it could be them, it could be anybody?

BRIAN TRELSTAD: That is a central part of what I think makes Rosanne an exceptional social entrepreneur. One of, again, the reasons why I wanted this case to be, it’s the final case we teach in the course on social entrepreneurship and systems change. And that systems change agents often start by building a new product or using metrics to try and improve a system. Ultimately what they realize their biggest point of leverage is to shift the mental model of how we think about the problem. Again, the language that Rosanne and others in the field have used from “the homeless” to “people experiencing homelessness” is an example of a shift in the mental model that moves it from an identity to a temporary state. I think Rosanne in announcing or on the call, where MacArthur announced the award to them, she was quite excited about the trust that they had placed in her and the potential for them to end homelessness as we know it today, and the idea that we could, in fact, surmount something that had been seen as insurmountable before is the thing that keeps her going and enables those who’ve been working in the trenches, in homelessness services for a long time to feel like, wow, maybe we can finally turn the corner. So I think her role in the field is really to bring the best out of everybody and to provide that kind of galvanizing North Star of what the possibility might be.

BRIAN KENNY: So with your expertise at impact investing, I’m wondering if this is the kind of thing that impact investing focuses on. Are these the sorts of areas where that kind of capital can flow to really have a compound effect?

BRIAN TRELSTAD: The impact investing field in the United States has largely been built in part around affordable housing. So there’s a large affordable housing industry, many large national nonprofits, like Enterprise and LISC have built in partnership with local developers thousands of units of affordable housing, often taking foundation money. In fact, the very first impact investment in the United States was the Ford Foundation, providing a loan guarantee to an affordable housing developer in New York City. Where Rosanne wants to use part of the capital is to go a step further and to try and bring in market rate capital in communities like Jacksonville, Florida, where there is a constraint on the availability of housing to leverage in private capital. So she’s building an impact investment strategy alongside Community Solutions. This could be her next act. If they can figure out the timing and coordination, it completely de-risks affordable housing development in certain markets. If she’s got the demand side and visibility into it clearly locked down, and there’s plenty of funding to provide the support. Then that makes a pretty compelling case for private capital investors. We’ll see whether that works, but it’s a great experiment that comes into this and might be the second case we write on them.

BRIAN KENNY Yeah, which would be terrific. Brian, this has been a great conversation. I really appreciate the insights you’re sharing about the case. I have one final question for you before we end, which would be, if you want our listeners to remember one thing about this case what would it be?

BRIAN TRELSTAD: I would say that I think the students who come away from this case, and I hope your listeners will too, is that social change is hard and we look for silver bullet solutions. A hundred million sounds like it’s going to be the silver bullet, but it really is a reflection of the 30 years of hard work that Rosanne and her team have put into attacking this problem and is an investment in the next 30 years of what it will take creativity and hard work to keep chipping away at. But it’s a great reflection of long-term systemic change. We want overnight solutions, but it takes 30 years to become an overnight success. That’s the case of Community Solutions and Rosanne Haggerty.

BRIAN KENNY: Thank you so much. We’ll be keeping an eye on them and maybe there’ll be a B case at some point down the road, right?

BRIAN TRELSTAD: That sounds good.

BRIAN KENNY: Brian, thanks for joining us.

BRIAN TRELSTAD: Thanks for having me.

BRIAN KENNY: We are excited to be celebrating the 100-year anniversary of the case method at Harvard Business School. If you want more on the history of the case method, visit our website: www.hbs.edu/casemethod100. Cold Call is a great way to get a taste of the case method, after all each episode features a business case and its faculty author. You might also like our other podcasts: After Hours, Climate Rising, Skydeck, and Managing the Future of Work. Find them on Apple Podcasts or wherever you listen. If you enjoy Cold Call or if you have any suggestions, we want to hear from you. Write a review on Apple Podcasts or wherever you listen or email us at coldcall@hbs.edu. Thanks again for joining us. I’m your host, Brian Kenny, and you’ve been listening to Cold Call, an official podcast of Harvard Business School, brought to you by the HBR Presents network.