A Colorado Couple Brings a Venture Approach to Family Philanthropy

It’s unclear how much the Merage family is currently worth, but they’ve been on the Forbes’ wealthiest American family list in the past, sporting a $1.8 billion net worth in 2015. If you haven’t heard of this clan, you’ve definitely heard of Hot Pockets microwaveable turnovers. Founded in 1977 by brothers David and Paul Merage, Chef America, the company behind those tasty microwavable meals, sold to Nestle for $2.6 billion in 2002.

Today, David Merage runs Consolidated Investment Group (CIG), a Denver-based company investing in real estate, capital markets and private equity. He and his wife Laura run the David and Laura Merage Foundation, which focuses on community development and early childhood education. Visit the family’s philanthropic page, though, and you’ll notice a constellation of other Merage foundations and nonprofit ventures. The Andre and Katherine Merage Foundation bears the name of David’s parents. Merage Israel partners with innovative social entrepreneurs dedicated to the prosperity of the State of Israel and its people.

The David and Laura Merage Foundation, meanwhile, sets its sights on Colorado as well as national causes, and takes a venture philanthropy approach. As we’ve covered, venture philanthropy first came onto the scene about two decades ago and harnesses business ideas hoping to create bigger, better organizations that operate with more rigor and achieve greater impact.

Early philanthropic days

For David and Laura Merage, their philanthropic roots can be traced back to their native Iran. “My father was born to a very poor family. The only reason he was able to succeed in his life was because of his education and understanding that education was the tool for him to get ahead,” David told me in our recent virtual interview. His father understood that hard work mattered, but also knew that the education he was able to receive facilitated it.

These important lifelines were fostered by their Jewish community. Patriarch Andre attended Alliance Israelite Universelle (AIU), a group of schools set up by affluent French Jews to provide education to Mizrahi Jews living in a number of Islamic countries. Naturally, the Merages have supported AIU.

“His father was able to stand on the shoulders of people before, and we, too, are standing on the shoulders of our fathers and mothers, and we continue to pay it forward,” Laura explained.

David immigrated to the United States in the late 1960s, and attended California State University. Later, as the Merages rose in business, they started to give back. And when Chef America sold in the early 2000s, the couple decided to deepen their giving and set up a formal foundation, endowing it with funds from the sale. They sat down over coffee and discussed exactly how they wanted to make an impact. Ultimately, education, especially early education, resonated with them after their research revealed the extent to which those early years could set the trajectory.

The Merages contributed $30 million to the foundation in its first year, per tax records. They aimed to make their mark in the social impact space, just as they had in business with sound entrepreneurial principles. Notably, David’s company, CIG, actively supports the foundation’s work by providing office space, resources and human capital to ensure that it can focus on tackling complex societal problems and creating lasting solutions within the community.

Venture philanthropy

“This our DNA… We go along with the check. We feel that it is essential for organizations that we help succeed to lend our expertise, our knowledge, and our years,” Laura tells me. With the nonprofit and for-profit arms working in tandem, employees working at CIG also find meaning in working for the Merage Foundation, contributing their own time, energy and knowledge.

For instance, when Laura launched RedLine Contemporary Arts Center, CIG’s real estate department helped with remodeling and contracts, and its legal department helped start the 501(c)(3).

Looking around the business world, the Merages see an untapped pool of talent and human capital that can be harnessed for philanthropy, particularly for donors who run large companies. “Can you imagine if everyone embraced this model and brought their knowledge and experience? You have a thousand people. What a tremendous force,” David says.

As a longtime artist, Laura takes the lead with the foundation’s arts work, including RedLine, an urban art laboratory promoting the creative expression of resident artists. Laura has focused on advancing arts education and also empowering artists’ careers, hoping to bolster the pipeline. “If we don’t have the artist, and we don’t empower their career, we can’t say that arts education is important,” she tells me.

She’s also conscious that overall arts education in this country is underfunded, even though the arts hold critical value in unlocking creative thinking that can prove vital in school and far beyond. Surprised to find out that more than 90% of people in the United States have not walked into a gallery or museum, Laura also launched Black Cube, a nomadic art museum to take art outside of the typical galleries and museums.

The organization started with art installations around Colorado, and more recently has expanded to other states and internationally in places like Mexico. And in a time of social distance, Laura notes that Black Cube is positioned to have a strong impact.

Early childhood allies

In 2008, the foundation launched Early Learning Ventures (ELV), which aims to enrich education for children ages birth to five years old. ELV works to bring young children into the public education system, while also investing in building up the nation’s supply of quality childcare providers, which are often small mom-and-pop operations. Twelve years in, ELV serves more than 600 childcare programs, impacting some 46,000 children, and works with providers in Colorado, South Carolina, New York, Michigan, Nebraska, Wisconsin, Wyoming and Hawaii.

ELV might typify Merage’s venture philanthropy work. Initially, the foundation helped build out the nonprofit and later spun it off as a public foundation, allowing ELV to pull in funding from other sources. Still, Merage continues to provide pro-bono space, administrative services and management guidance.

Another key aspect of Merage philanthropy is tapping a range of partners, including governments and their leaders. Consider Colorado Governor Jared Polis, who puts early childhood education at the top of his policy priorities and has set his sights on the ambitious goal of universal preschool. “He is a truly dedicated advocate for children, which aligns with our goal,” David says.

Earlier this year, the Merage Foundation launched Care for All Children, a national public awareness campaign to shine a light on the childcare affordability crisis. The campaign aims to organize a movement of parents and their allies, and make a direct plea for childcare cost relief to lawmakers. The Merages believe these efforts are all the more critical during a pandemic, where quality child care is more scarce and even more expensive.

The Merage Foundation is influencing policy on the ground. More than two-thirds of Colorado voters voted for Proposition EE, a tobacco and e-cigarette tax that will generate over $2 billion in the first decade to support universal preschool for all four-year-olds. The Merages are hopeful that they’re building momentum and that other states will build on Colorado’s success with Prop EE.

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Before we ended our conversation, the Merages mentioned Equitas Project, now a part of Mental Health Colorado (MHC), which ensures that law enforcement and the justice system are fully informed, empowered and engaged to proactively support and care for people with mental illnesses rather than funnel them into the criminal justice system. Just like early education, the Merages were attracted by this neglected funding space and were truly moved by the stakes.

“We became aware of the mayhem of mental health and the justice system tangled together. Once we found out, we couldn't look away. Enough,” Laura told me.

The third generation of Merage family philanthropy is already in full swing through the Jonathan Merage Foundation and the Sabrina Merage Foundation. Sabrina was only a teenager at the time her foundation launched, but for this Iran-born family with an entrepreneurial bent, that’s exactly how they prefer it.