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Children's homes and orphanages run by voluntary organisations were a prominent feature of the Melbourne landscape from the 1850s to the 1970s. To those on the outside they stood as sites of benevolence, evidence that the city honoured its obligations towards children in need, but for those who were the objects of such charity they could also be sites of deprivation and abuse.

The earliest institutions, the Melbourne Orphan Asylum founded in 1851 (now part of Oz Child), and the Catholic Orphanage founded in 1855 (the predecessor of St Vincents, South Melbourne and St Vincents, Black Rock), were based upon similar British institutions, offering accommodation to children of respectable parentage deprived by death of their male breadwinner. The model was the boarding school, with children grouped according to age and gender, and offered an education sufficient for them to be apprenticed as domestic servants or agricultural labourers at an early age. They remained in contact with surviving family members who often contributed towards the cost of their care.

Most Melbourne children's homes, however, owe their origin to the child rescue movement which, in the last quarter of the 19th century, focused attention on children at risk who did not meet the strict eligibility requirements of the orphanages. Although they identified their target population as the 'street arabs' and 'gutter children' of the inner city, the denominationally based societies which founded these institutions were most commonly approached by poor parents, sole fathers and single mothers anxious to have their children taken into care. Their model was not the institution but the home, preferably a family placement but, if this was not possible, a small institution in which the matron and her staff stood in the place of parents. Because such societies saw 'unfit' parents as a danger to the child, they assumed full guardianship, breaking all family ties except in the rare instances where parents paid maintenance for their children while in care.

During the first half of the 20th century the two systems came closer together as orphanages experimented with smaller group care and child rescue homes became larger. In both sectors there was a move towards specialisation. Advances in artificial feeding facilitated an expansion in the number of babies' homes, often linked to adoption agencies. Housing reformer F. Oswald Barnett inspired young Methodist men to fund a home in South Yarra designed to rescue 'slum babies' and prepare them for placement in middle-class homes. Children who were unsuited or unavailable for adoption moved on to toddlers' homes, homes for school-age children, often with a school attached, stricter boys' and girls' institutions for difficult adolescents and hostels for young workers. Remaining differences were eliminated in the period after World War II when the introduction of direct government funding, and, in some cases, financial gains from participation in child migration schemes, allowed for major rebuilding. Most organisations adopted the cottage model with children living in family groups in smaller homes built on a village model or scattered throughout the suburbs.

A decrease in poverty levels and the incidence of premature death lessened the demand for private placements, leaving voluntary children's homes increasingly dependent on state wards placed through the Children's Welfare Department. Having closed its own institutions following the introduction of boarding-out in the 1870s, the department had faced serious overcrowding problems at its Royal Park depot when the number of children coming into care had increased during the depression, a time when foster parents were also in short supply. It was keen to form an alliance with the more progressive voluntary sector, establishing during the 1950s a Child Welfare Advisory Council through which heads of voluntary organisations could have an input into policy-making. However, when during the 1970s the department moved its emphasis away from institutional care, voluntary organisations were left in a vulnerable position. Some had pioneered community-based foster care or preventative or supportive programs directed at families, but the continuing decline in the number of children in care in the 1980s forced them to compete against each other for government funding, with closures, relocations and amalgamations as a result. The survivors of this process (Anglicare, Berry St Inc., Kildonan, Mackillop Family Services, Orana and Oz Child), while no longer so visible in the urban environment, are still central to the provision of child and family services in the city.

Shurlee Swain