Maya Angelou School Installs Public Art

Board and Investors: Insights from Surdna's Ed Skloot

Two Washingtonians of the Year Near and Dear to VPP

US Conference of Mayors Sounds Alarm

Although New Year’s resolutions are of course personal matters, I want to put forward a resolution I’m hoping that many individual donors and foundations will consider making along with me and VPP. The resolution is to do a better job of acknowledging the role that we all can and should play in advocating for the vital interests of community-based organizations at a time of fiscal crisis.

Nonprofit organizations across the country are taking it on the chin right now. Every day we see new evidence of the rise in community needs—from emergency food and shelter to healthcare and job services. Simultaneously, on top of tight budgets at the federal level we are now in the midst of the worst fiscal crisis at the state and local level since World War II.

The squeeze on several of our own grantees is acute. Deep cuts in DC’s allocation to the Children and Youth Investment Trust Corporation mean a loss of $120,000 for Heads Up this year and a deficit of nearly $200,000 in funds for after school and summer programs at Calvary Bilingual Multicultural Learning Center. Restrictions to the city’s child care reimbursement program will also affect these two nonprofits significantly.

The situation is not likely to improve any time soon. According to the highly respected Center on Budget and Policy Priorities, states are now facing deficits in their general-fund budgets of 13 to 18 percent—more than twice the size of the gaps they confronted in the recession of the early 1990s.

To understand the implications of these numbers for nonprofit organizations and the children and families they serve, you must keep in mind a few important facts:

• Almost all community-based organizations are dependent upon government funding streams.

• Unlike the federal government, most states—including Virginia and Maryland (and DC, for that matter)—must balance their budgets and therefore cannot run deficits from one year to the next.

• Even if they wanted to, governors and state legislators do not have the power to distribute the pain of budget cuts evenly. Most of the programs that fund the work of community-based organizations are included in “discretionary” budgets and are far easier for legislators to cut than, say, Medicaid or other “entitlement” programs.

• Despite the threat of major service cuts, citizens in many states showed in the midterm elections that they have little appetite for tax increases.

We at VPP believe this is the kind of moment when groups of like-minded citizens, including those in the philanthropic community with clout and influence, need to discuss actions that go beyond correspondence and op-eds. We and others need to decide how far we should go in pressing what we believe are crucial civic interests. We know that as a tax-exempt organization we are forbidden to do direct lobbying. But we have to keep in mind that this lobbying restriction prevents us only from pushing lawmakers to vote a particular way on a particular piece of legislation. It leaves a wide swath of other options open to us—all of which we need to consider in the year ahead.

For example, we here in the National Capital Region need to consider how business and philanthropic leaders can use appropriate influence to help community-based organizations amplify their voices in the District, Annapolis, Richmond, and even with the Bush Administration and on Capitol Hill. We need to gain a better understanding of the pressure points for tipping important fiscal policy decisions at the state, city, and county level. We need to consider ways we can create more stable funding streams for meeting key social needs, as California voters recently did by approving increased state funding of before- and after-school care through a citizen ballot initiative.

Locally, we should gather and analyze comprehensive data to track the spread of poverty within the National Capital Region and gain a better understanding of which organizations are serving children in our region and how they are supported. With this data, we could make reasonable predictions about budget cuts and policy options across the region and better target our philanthropic and civic efforts.

The founding concept of VPP was bringing together people who wanted to do more than write a check. With that in mind, we believe that 2003 is the year for VPP to begin to think about our strategy more expansively to incorporate greater support for our investment partners in the area of advocacy—and to be prepared to join them in public venues to support their efforts. As important as private money is, our investment partners have little chance to fulfill their ambitious aspirations for the children and families they serve without strong support from the public sector. We hope that a wide range of organizations and individuals who care about children will join us in becoming squeakier wheels in this new year.

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Maya Angelou School Installs Public Art

On December 17, several students from the Maya Angelou Public Charter School who have been studying public art and the history of the Shaw neighborhood, installed a plywood mural in a lot behind the Metro station at 13th and U Streets, NW. The lot, owned by Manna Inc., a community development organization, is the former site of “Temperance Row,” one of several alley slums that dotted the city in the first half of the 1900s. In recent years the lot has been used for a weekly farmer’s market. Manna plans to build townhouses for low-income families on the property in 2004.

The students’ colorful mural depicts the past, present, and future of that property, offering an encouraging view of what the neighborhood can become. Maya Angelou’s art instructor, Marissa Hoechstetter, said the students were “pleasantly surprised by their work. They liked the idea of showing real life as well as their ideals for the future.”

“Many of our students have grown up in Shaw and Columbia Heights, and the mural project helped them maintain a sense of place and relevance, even as the neighborhood is changing,” said David Domenici, executive director of the See Forever Foundation, which operates the charter school.


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Board and Investors: Insights from Surdna's Ed Skloot

As always, Edward Skloot, executive director of the Surdna Foundation and a VPP board member, is challenging philanthropy to stretch its definition of itself. In a recent speech at the annual meeting of the Minnesota Council on Foundations, Ed said that in the wake of today’s economic stress, funders must be more action-oriented, moving beyond simply offering charity to becoming actively involved in the communities they support. Ed urges philanthropists to roll up their sleeves and work with others to find solutions to problems. The mark of distinguished philanthropy, he says, is taking action and “going after root causes of poverty, inequity, and disadvantage, and, by doing it, making institutional and social change.” Read Ed’s speech at



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Raul Fernandez: Charting His New Course

Raul Fernandez has imagination and ambition, but he certainly didn’t expect to be sitting on top of a goldmine or to be one of the owners of Washington’s professional hockey and basketball teams before his 40th birthday. Today he faces both the luxury and the challenge of making the next right moves in business, in philanthropy, and as a new father.
For Raul, one of the original founding investors of Venture Philanthropy Partners, 2001 was a very, very good year. That year, Proxicom, the technology services company he founded ten years earlier, was sold to Dimension Data for $450 million. It was the year that he and his wife, Jean Marie, learned that they were expecting their first child (their daughter, Sofia Marie, was born last April. And it was also the year that the social venture fund he and now- Governor Mark Warner of Virginia helped Mario Morino develop became operational as Venture Philanthropy Partners.

Raul’s is a story of a local guy making good. He was born in Washington, DC. His father is a Cuban agronomist who worked for the International Development Bank. His mother is from Ecuador. The family lived in Brazil for a few years and then returned to the Washington area, where Raul and his sister were raised. Raul received a solid Catholic education at St. John’s College High School and went on to earn an economics degree at the University of Maryland. He has a deep appreciation for the cultural richness of this region. He says it offers many of the international and multicultural advantages of bigger cities, “but the smaller size of Washington makes it easier to enjoy—like a boutique restaurant.”

The region has accommodated the seasons of Raul’s growth and exploration. In 1984 his father took him to a fundraiser sponsored by Hispanic Republicans. He met an aide to New York Congressman Jack Kemp and was wooed into politics. Raul worked as a legislative assistant for Kemp until 1988. He then traded politics for business, joining an emerging technology firm. In the 1990s he decided he wanted to be his own boss, so with $40,000 in savings he started Proxicom in 1991.

By the end of the decade, Proxicom was providing e-business solutions to Fortune 500 companies including AOL and Marriott, and had 1400 employees in seven countries. “I was always paranoid that we wouldn’t be able to keep the business growing at an incredibly fast pace,” Raul recalls. “We were good, but we wanted to be great… The paranoia was real helpful, but it burns you out.” The company was so successful that both Compaq and Dimension Data wanted to buy it. “That was very flattering,” Raul says. “When DiData raised their bid 30 percent at the last minute, it was testament to the good value of the people who worked here.”

Raul’s success also captured the attention of the GOP, which invited Raul to make a prime-time television address during the 2000 convention. He shrugs. “I was a minority, in technology, a Republican, and well-off—it’s a small gene pool to pick from. It was a blast!”

Today, as the chairman emeritus of Dimension Data, Raul is contemplating his future. From the incessant ringing of his cell phone, it seems that the world is calling. While he’s deciding his next moves, he’s enjoying having time to spend with his wife and baby daughter and focusing on ways to give back.

He and Jean Marie are particularly interested in supporting quality education programs for children. They are prominent supporters of Washington’s Center City Consortium, an initiative aimed at shoring up Catholic schools in the region by strengthening their back-office operations.

Now Raul is also able to give more time and attention to VPP. His involvement with VPP grew out of a working relationship with Mario Morino, whom he met in 1996. Mario hired Raul’s company to provide the technological platform for the Morino Institute’s Netpreneur online forum, and Proxicom became the anchor tenant in the office building that Mario developed in Reston.

Mario and Raul became fast friends, and Raul was willing to be an early investor in VPP. “I was attracted to VPP because the approach was fresh and new, and I like the exhaustive analytics that Mario has brought to its development,” Raul says. Raul has been a vocal board member and says he is pleased that VPP is finding its rhythm. “I’m looking forward to rolling up my sleeves and getting personally involved with one of [VPP’s] investment partners in the new year.”


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Two Washingtonians of the Year Near and Dear to VPP

The January 2003 issue of Washingtonian magazine honors “people who make Washington a better place…who make a difference [and] inspire others.” Among those honored as Washingtonians of the Year 2002 are two special friends of VPP: Terri Lee Freeman, president of the Community Foundation and a VPP board member, and W. Lyles Carr II, who runs the McCormick Group, an executive search firm that works closely with VPP investment partners to identify and recruit the talent they need to build their organizations.
Terri Freeman continues to receive kudos for her quick work in establishing the Survivors’ Fund to meet the needs of local families affected by the September 11th attacks. But, as the article notes, “Freeman never forgets that the city’s neediest citizens live in a permanent state of crisis,” and she works hard to help donors meet some of those needs.

Some might think Lyles Carr never sleeps. He serves on numerous boards and is the consummate volunteer. Washing-tonian recounts the day that Lyles showed up in overalls and a tuxedo jacket, riding a tractor, to jump-start a successful gala garage sale for Jubilee Housing a few years ago. He is also the force behind the Greater Washington Collaborative, which brought together the Board of Trade, Leadership Washington, Junior Achievement, and Greater DC Cares under one roof in downtown DC.
We at VPP are tremendously proud of Terri and Lyles. They richly deserve this recognition, and we add our own hearty “Amen!”

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US Conference of Mayors Sounds Alarm
According to The New York Times, a survey released last month by the U.S. Conference of Mayors indicates that the increase in the need for emergency food and shelter is higher than it has been in a decade. The survey reported that the demand for food aid rose throughout the country by 19 percent. The demand for emergency shelter was more varied, with St. Louis reporting the greatest increase-64 percent-while the overall average increase was 19 percent. (free registration required)

If you have questions or comments about VPP News, please direct them to Sandra Gregg.

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