Chairman’s Corner: December 2010

I’d Do It All Over Again

by Mario Morino, Co-founder of VPP

Yesterday (December 8), Venture Philanthropy Partners held a special event for our investors to celebrate VPP’s 10th anniversary. Those of you who know me are well aware that I’m not the sentimental or nostalgic type. But this 10th anniversary got me to slow down a bit over the Thanksgiving holiday and do a lot of thinking (and writing) about what VPP has meant for me, for our nonprofit partners, for the children they serve, for our region, and for the social sector.

During the Thanksgiving break, I recalled the work we did in 1998 and 1999, when the wonderful Bob Templin, now the president of Northern Virginia Community College, and I met with scores of individuals to discuss an idea to fundamentally change the support for promising nonprofits seeking to scale their impact—to help them serve children and youth better, and serve more of them. In addition to holding scores of individual meetings, we also brought together business, community, and nonprofit leaders on November 5, 1999, and May 2, 2000, for larger discussions. These convenings produced strong support as well as equally strong questioning of the vision. On the support side, I remember a prominent executive pulled me aside at a break and exclaimed, “I came here expecting to see a photograph, and you’ve produced a movie!” Heady stuff. On the other hand, a community leader I highly respect said, “You made it sound so easy. What you’re up to is good, but you’re going to find it much harder than you think.” Reality spoke.

Sobered but undaunted, now-Senator Mark Warner (D-VA), business leader Raul Fernandez, and I agreed to work together to create what we envisioned as an innovative investment fund to improve the lives of children and youth of low-income families. In October of 2000, it all came together at a provisional board meeting at the 11600 Sunrise building in Reston, VA. Mark, Raul, and I were joined by the Dream Team of Jack Davies, Terri Freeman, Billy Shore, Les Silverman, Lynn Taliento, Bob Boisture, and Bob Templin. At this meeting, which culminated nearly two years of preparation, we voted unanimously to authorize the creation of a venture philanthropy fund and name the organization to manage the fund Venture Philanthropy Partners.

I felt a strong sense of optimism that day. But because of the wise cautions we had heard along the way, I did not have the chutzpah (or the Italian version, which is not as polite a word) to think up, or share with others, ten-year projections like these:

• Imagine that by the end of the decade VPP will mobilize more than $100 million, including $4 million in capital from a White House initiative to spur social innovation, to improve the lives of children and youth in the National Capital region.
• Imagine that VPP will enable 14 breakthrough nonprofits not only to increase the quality of their programs and build more sustainable, high-performing organizations but also to more than double the number of children and youth they serve.
• Imagine that VPP’s nonprofit partners will improve the lives of 50,000 children every year in meaningful, measurable ways—from higher immunization rates to improved performance in school to higher rates of college attendance and success.
• Imagine that VPP will have a positive impact on the mindset of scores of families of significant wealth—helping them to engage more deeply and effectively in a wide range of philanthropic initiatives and civic-leadership roles in our region.
• Imagine that VPP will weave a web of resources—investors, advisors, connectors, officials, executives—that will raise the bar and increase the region’s capacity to help promising nonprofits grow to be better and do more.
• Imagine that VPP’s growth-capital investment approach will be studied broadly, influence many, and will be emulated by organizations around the country and the world.
• Imagine that VPP will become one of the respected voices advocating for bringing greater focus and rigor to the social sector in areas from mission effectiveness to business planning for nonprofits.

I’m pleased (and relieved) to say that all of the above has materialized, thanks to the incredibly hard, innovative work of so many—our nonprofit partners, investors, co-investors, board, advisors, and the VPP team.

My Personal Litmus Test

There are many things I did not anticipate ten years ago when we set out on this journey. I recognized the extensive investment of time (and time separated from my family) that this labor of love would entail. But I sure didn’t anticipate the seismic economic events of the past decade—from the dot.com crash to the near collapse of our financial markets in 2008 and the Great Recession that followed—that would affect the priorities of families and the demand for nonprofit services. In addition, I did not fully appreciate the angst and churning I would go through—and put others through!—when trying to implement VPP’s very different investment approach to philanthropy. And although I expected resistance, I didn’t fully foresee the criticism and rebuke we would provoke by challenging the status quo.

If I had possessed perfect clairvoyance in 2000 and had a full view of what this endeavor would entail, would I do it again? My answer is an emphatic yes.

This is not to say that there were not other worthy causes to tackle, given how tumultuous and volatile the decade proved to be. But at the risk of appearing to be too much of a cheerleader or Kool-Aid drinker, I am convinced in my heart that VPP has lived up to the promise that Mark, Raul, and I saw in this concept ten years ago.

Did we make mistakes? Sure we did! With the benefit of 20/20 hindsight, I see dozens of key missteps I, personally, made. For example, especially in the early years, I alienated potential funding partners with my brash rhetoric. I did not understand what I did not know about the complex organizational, cultural, and political ecosystems nonprofit leaders must navigate each and every day. I struggled to get the right mix of skills and experiences on the VPP team.

It took me years and multiple tries to get it close to being right. And, as I struggled with getting the formula right, my missteps stole precious time I should have devoted to the families who generously invested in our work—engaging them more, leveraging our work to help their efforts, and finding more ways for them to work with and share with one another.

Yet, even with all of my personal “shouldas,” when I step back and take a long view, I am pleased by and thankful for what VPP has evolved to become. For my money (the largest investment I ever made!) and time, VPP has been worth everything I’ve put in—and more.

Beyond the Numbers

Prompted by this 10^th anniversary, VPP will be doing more over the coming year to tell its story and share its hits and misses. But I can’t help but offer a few stories and memories that illustrate why VPP has meant so much to me personally.

• Seeing Young People Thrive: I hope I conveyed this properly to him at the time, but I’ll never forget when James Forman, Jr., a leader I deeply respect and the co-founder of VPP investment partner See Forever Foundation, told us that “every single kid who walks across the stage of our graduation this spring, ready to go to college, is a kid who wouldn’t be walking across the stage without VPP.” At See Forever’s three schools, 80% of graduates go on to college or postsecondary school—a staggering percentage considering that almost all of these kids struggled in previous schools and almost everyone had given up on them.
• Serving Courageous Leaders: As we sat down in late 2004 to discuss the needs resulting from the region’s demographic changes, Maria Gomez, the president and CEO of Mary’s Center, reached across a table, grabbed my hand, and emphatically said, “This is why Mary’s Center has to figure out a way to expand.” She and her talented team then led an ambitious expansion in the region and grew from serving 3,900 children to almost 9,500—with demonstrable educational and health impact.
• Supporting Innovation: I don’t make many site visits, because I don’t like to disrupt our partners’ work or make them feel they need to put on a special show. But this past June, I made a one-day exception. In the morning, I met Donald Hense, Friendship Public Charter School’s Chairman, and visited Friendship’s Southeast Elementary School to review the outcomes reporting system COO Pat Brantley and Chief Academic Officer Michael Cordell developed and that was already experiencing fast adoption. Their work blew me away. Later that afternoon I visited with Lori Kaplan, Latin American Youth Center’s Executive Director, and Isaac Castillo, Director of Learning and Evaluation, and their evaluation team. I got to see first-hand the product of their hard work to define a thoughtful framework for outcomes and leading indictors that is now being hailed as a model for complex, multi-services organizations. Quite a day!
• Realizing Collective Impact: Shortly after VPP was named an inaugural awardee of the White House Social Innovation Fund, I stopped to reflect on VPP’s portfolio of investments and couldn’t help but smile. The SEED School had just been featured on “60 Minutes” for how well it was changing outcomes for its students. See Forever Foundation’s innovative education program in the District of Columbia’s juvenile justice facility (the Maya Angelou Academy) had just been evaluated as “one of the best programs ever seen” by experts. And VPP had just announced the largest investment in its ten-year history, to help the outstanding national organization KIPP expand its presence in the region from seven schools serving approximately 1,550 students to ten schools serving at least 3,400 students. The convergence of these events drove home the collective impact and huge potential of VPP’s investment partners.
• Seeing the VPP Team’s Efforts Acknowledged: I try not to focus too much on these things, but I candidly acknowledge what an honor it was for me and our team to have the iconic Joel Fleishman forecast that social entrepreneurship and venture philanthropy would be major forces for change in the 21^st century and highlight VPP as one of the best examples in the field. It has been a similar honor for us to see Matthew Bishop of The Economist give kudos to VPP in his writings in the magazine and his book Philanthrocapitalism. And, of course, it was a tremendous thrill for us to learn that VPP was recognized as one of only 11 inaugural awardees of the White House’s Social Innovation Fund initiative in a very competitive field.

Gratitude Beyond Words

So many people are responsible for what VPP and its outstanding investment partners have achieved. If I were to acknowledge properly all of the people who have contributed to this work, the list would run into the hundreds. But there are a few whom I must single out.

VPP would not be what it is today without Carol Thompson Cole, VPP’s President and CEO. She brings gravitas, depth of civic experience, the respect of multiple communities, strong management, and natural leadership. I believe Carol is a leader of such tremendous capacity and determination that she is one of the region’s very best—regardless of sector—and a person who will have profound impact on the future of our region. If the test of a great organization is its ability to recruit a great leader to succeed a hard-headed founder, then VPP’s grade is A+.

My co-founders, Mark Warner and Raul Fernandez, as well as their families, have been unwavering in their support since the day we set this course in late 1999. I rarely talk about dollar amounts, but I can’t help but highlight Raul and Jean-Marie Fernandez’s astonishing leap-of-faith gifts totaling $5 million since the inception of VPP—investments I will never forget. And while Mark went on to be one of the most respected governors of his time and now has earned the privilege of serving in the U.S. Senate, he has stayed close to the work of VPP, been informed by it, and he and his wife, Lisa Collis, remain wonderful advocates for VPP. VPP and I could not have asked for two better co-founders.

Meeting Jack Davies through our close mutual friend Len Leader was not only a great day for me but also a pivotally important day for VPP. Jack and I hit it off from the get-go. He brought (and still does) an enthusiasm, executive mindset, and irreverent exuberance as an investor, board member, member of the executive committee, and champion of nonprofits. Jack has become the face of VPP to many families and institutions in the region, provides extraordinary leadership, and is the biggest success factor in VPP’s ability to meet its lofty capital-raising goals.

There are so many others to thank. Les Silverman for the sage advice he has always shared with Carol, the team, the board, and me. Bob Templin for his steady influence and compassionate reality checks. Charito Kruvant for her uncanny sense of what is right. Billy Shore for providing a constant source of inspiration from the very beginning. Ralph Smith for always keeping us mindful of the realities of the communities served and helping us understand and navigate the greater philanthropic world. Ed Skloot for his challenging insights and constructively provocative thinking. Lynn Taliento for probing in a way that always makes us better. Fred Miller for helping us honestly assess our shortcomings and progress.

I can’t possibly do full justice to the contributions of the VPP team, past and present, who have excelled in so many ways and given so much of themselves. The team has accomplished so much despite having to fly the plane as we were still building it. They endured a steady stream of change in a world of ambiguity. More than anything, they operationalized the “secret sauce” that makes VPP so distinctive in the worlds of philanthropy and nonprofit organizations. Thank you!

We owe tremendous gratitude to all the families, individuals, and institutions that have invested in VPP’s mission.  Our founding investors took a chance when VPP was nothing more than a powerful idea.  At the time VPP was established, giving through an intermediary at such high levels of commitment with the sole focus of funding capacity and scale was almost unheard of.  Our investors then and now demonstrate deep compassion toward the children and youth most in need in our region and a visionary, entrepreneurial spirit.  Many have also given their time and talent on behalf of our portfolio organizations and have helped nourish and support our investor community.  I can’t thank them enough for their generosity, encouragement, and willingness to make a difference.  They are remarkable!

Last, and perhaps most significant of all, are our investment partners—including the executive directors, staff members, and boards. You are the ones doing the hardest and often most thankless work to improve the lives of children and youth. Without you, there is no VPP. Many of you have truly taken us into your confidence and have come to use us a trusted resource—and we are deeply grateful for that. Most of all, thank you for what you are doing to change the lives of young people across our region.

A Promising Path

Our journey over this past decade has been described by others as thoughtful, impactful, provocative, halting, empowering, and frustrating. All of these things are true. And all of these attributes flow from this organization and its hard-headed founder’s desire to be exemplary in both the what and how of our work. A strong commitment to our core beliefs has, at times, proved exasperating to others, but more often than not this conviction has kept us well-moored and has stood the test of time.

As VPP embarks on the next ten years, it does so from a position of strength and demonstrated performance. VPP has moved from vision to reality. It has made the difficult transition from a founder-centric creation to an entity with strong and broad-based leadership anchored in its CEO, Carol Thompson Cole. It has learned from mistakes. It has adapted to function within and across the ecosystems of the National Capital region and field.

Today, it moves forward with new vision, one based on its past, but aligned to the future. It will build off its proven investment approach to harness the strengths of multiple nonprofits in partnerships, consolidations, and networks. It has to. The aftershocks of the Great Recession, high unemployment, and a curtailing of state and municipal services will translate into greater need for the kinds of services VPP’s investment partners provide even as the region’s overall funding “pie” shrinks. Nonprofit performance will grow in importance because all funders will need to make difficult choices as to which organizations should get a slice of the smaller pie and which have the strength to sustain the turbulence ahead.

VPP is uniquely equipped to help promising nonprofits navigate the turmoil and respond to the opportunities the next ten years will present. In fact, VPP’s nonprofit partners—current and future—are poised to improve the lives of 100,000 children and youth in our region by 2020.

VPP has a long way to go in order to realize its ultimate aspirations for the children and families of this region and beyond. But we’re on the right path. And I am deeply grateful for all the learning and growth that path has produced for me—and for all those on this journey with VPP.

Happy, healthy holidays to you all