VPP News  
  February 2005 · volume 6 · issue 2  
 
Feature
Investor Profile: Richard Hanlon
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Investment Partners

Mary's Center: Listening, Learning, and Growing

Heads Up Read & Create Packs in Local Michaels Stores

Board and Investors
In2Books in the News

Communications
VPP Announces New Management Roles

Social Edge Discussion on Securing Corporate Sponsors

Feature
  
    Investor Profile: Richard Hanlon

The eclectic collection of memorabilia in VPP Investor Richard Hanlon’s home office provides a glimpse into a peripatetic life that has landed him in extraordinary places during pivotal moments in time. Between spending his teenage years in Hong Kong during the Cultural Revolution, becoming a journalist in London, and then moving to Dallas through the nascent technology years and Washington during the Internet boom, both serendipity and wise choices have produced an adventurous life with many twists and turns. He shares a favorite Chinese quote, "Neither argument nor protest will sway the hand of destiny,” and explains, “I love the idea that we all have our own destiny. But, it also represents a challenge; I like to think that each of us has the power to affect our destiny.”

Recently retired as Senior Vice President, Investor Relations for AOL Time Warner, Richard followed an equally unusual path through a career that he describes as ”more accident than design.” After a childhood in the West Indies, Richard spent most of the Sixties in Hong Kong, leaving only when the Red Guard started seriously threatening the Colony’s equilibrium. While there he had the good fortune to study under the poet Edmund Blunden at the University of Hong Kong. Later, a poetry prize won at the University of London caught the eye of the business editor of The Sunday Telegraph, who offered him a job with the encouragement that he’d be more successful “writing about the objective than the subjective world.” A few years later at The Economist, with the British economy seriously floundering, Richard found, “there were too few stories of dreams and actions, of risks being taken.” He and new wife Pam—the girlfriend he’d first met back in Hong Kong—decided to move to Dallas, Texas, in search of new opportunities.

Dallas was booming, which came as a breath of economic fresh air. “It seemed every other company was either going public, unveiling a new technology, or acquiring someone else,” Richard recalls. And, while in the mid-1970s investor relations had yet to become a recognized profession, these companies all competed not just for capital, but for attention from Wall Street. He found himself drawn to the challenge of helping many of them gain a following in the financial community, identifying the right analysts and building their shareholder constituencies. "Primitive work by today's standards," recalls Hanlon, "but quite similar to financial journalism in that both require keeping the audience’s interest beyond that opening sentence. And, with my background, I liked the fact that this was always far more art than pure science.”

He was also intrigued with companies that changed not only business but also the everyday activities of consumers. In 1980, "absolutely certain" that it would transform the way people did their banking, Hanlon became head of corporate communications for Docutel Corporation, the company that pioneered the use of ATM's. From there he joined Uccel Corporation, one of the original leaders of the enterprise software industry, where he worked closely with VPP Founding Investor Peter Barris.

Early in 1988 he and Peter both joined Morino Associates, which brought Richard, Pam, and their family to the Washington, DC area. He served on the core team that led the firm through a number of acquisitions to eventually become Legent Corporation, working alongside other fellow VPP Founding Investors Mario Morino, Len Leader, and John Burton; all of whom later went on to lead their own ventures, as well as with VPP Founding Investor, Steve Denning of General Atlantic Partners.

It was 1994 when Len Leader, with America Online passing its first million subscriber mark, felt the time had come for the young Internet provider to establish a permanent investor relations position and turned to his former colleague from Legent. Richard describes it as the happiest move of his business life; “also the easiest, since AOL’s tiny offices were literally just across the parking lot.” Five years later, in addition to becoming one of its industry’s acknowledged leaders and the first Internet company to list on the New York Stock Exchange, AOL was the most actively followed and widely owned stock in the country. After moving to New York for a year after the AOL and Time Warner merger to assist in the transition, Richard and Pam came home to Northern Virginia, “to open another chapter in the story.”

These days, in addition to “taking fitful stabs at serious writing,” spending precious time with his three grandchildren, and traveling with Pam, he serves on a number of corporate and nonprofit boards including The Washington Ballet and Michaels Stores, Inc. the nation’s largest arts and crafts retailer, where he has been instrumental in forging a partnership to benefit VPP investment partner Heads Up (see November VPPNews for additional information).

It was during his time at AOL that Mario Morino first approached him about becoming involved in VPP, then called Youth Social Ventures. Richard was attracted to this new philanthropic model, which he interpreted as “philanthropy with an activist twist.” He had just started formalizing his own philanthropic work with the formation of the Hanlon Foundation, formed with Pam, sons Blake and Reid and daughter Brooke, who now serves as the Executive Director of the foundation. “Seeing VPP operate and watching its own progress has caused us to be more precise with our own activities. It has also helped us to think and plan in a longer-term framework than we did at first. We’ve learned that, in the nonprofit world, things simply take longer.”

That isn’t all they’ve learned. Richard has become a big believer in the value of bringing together people and organizations that at first appear to have little in common. “When you scratch the surface, it’s fascinating to see how much seemingly disparate organizations can further their own goals by working with others,” he says. “And it’s especially satisfying to watch the multiplier effect at work, where money becomes simply a catalyst to put bigger things in motion.”

One example is the project Richard initiated with Heads Up and Michaels Stores. It began one afternoon in early 2003, when Jack Davies and Heads Up Executive Director Darin McKeever were giving Richard a tour of Davis Elementary School in the District. “Once you saw the children reading the books that Jack had arranged through Scholastic, Inc. (Jack’s on that company’s Board), it didn’t take much imagination to see that crafts could fit nicely.” The first step was getting Michaels to donate products for Heads Up’s summer camps. Since then, the two organizations have been joined by Scholastic and Crayola in the creation of a unique series of kits that hit the shelves of Michaels’ stores throughout the Washington, DC region last month. Books like “Is Your Mama A Llama?” tell the stories, Heads Up’s curriculum describes the projects that bring them to life, the craft supplies make it possible, and the children do the rest: all in a package that sells for less than $10. Better yet, explains Richard, each of the three participating companies is donating a portion of every sale to Heads Up.

Even more ambitious is a project the Hanlon Foundation has been working on with the government of Trinidad and Tobago. After taking their proposal to the Caribbean nation’s embassy in Washington and visiting Port of Spain last year, the foundation has been at work developing a series of programs whose purpose is to encourage young men and women to pursue careers in the fire services, and to recognize exemplary personal performance with a significant annual scholarship. A glimpse at the grainy black and white photographs in Richard’s office makes the choice of Trinidad and Tobago more obvious. In the 1950s, Richard’s father was responsible for building the stations, buying the equipment, and training many of the firefighters who have gone on to lead the department. Fittingly, they plan to name their Firefighter of the Year award in his honor.

All of which reflects another lesson Richard and his family have learned from their “activist” philanthropy. He puts it this way: “You soon arrive at the painful realization that the very best you can do is scarcely a drop in the ocean, after which you take a special comfort from causes that touch you in ways that are intensely personal.”

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Investment Partners
   
   

Mary's Center: Listening, Learning, and Growing

Walking along Ontario Road in Northwest Washington, it’s almost impossible not to notice the hot pink stucco building amid the plain red brick townhouses that line the street. Once a former warehouse storing art works for the Smithsonian Institution, that bright, inviting building is the administrative hub of VPP investment partner Mary’s Center for Maternal and Child Care. Just as the building stands out from its surroundings so does Mary’s Center in its ability to deliver top quality healthcare and other services to Latino families living the District of Columbia. Late last year, Mary’s Center was designated as the third “Federally Qualified Health Center” in DC, which entitles it to substantial federal funding for the next four years, federal coverage of its malpractice insurance premiums, and substantial increases in Medicaid reimbursements.

Founded in 1988, Mary’s Center serves more than 5,000 patients annually, providing comprehensive medical and mental health services to adults, children, and adolescents including prenatal care by certified nurse midwives and comprehensive medical care by nurse practitioners in an elementary school. Coupled with these services are outreach services provided by a mobile van with dental services on board, home visits, case management, early intervention services for children with special needs and their families, a multiservice program for teens and their parents to achieve school success, and an adult literacy program to improve the economic opportunity of families and encourage early family communication. This is all part of the holistic health approach that the Center takes in ensuring excellent health outcomes.

Gomez and a handful of dedicated healthcare providers started Mary’s Center largely to meet the needs of Latina women who were being neglected by the healthcare system. At that time, explains Gomez, there were not many places that offered healthcare for Spanish-speaking individuals in the District, whose numbers were growing rapidly. The Columbia Road Health Clinic had been providing these services, but it was shifting direction to focus more intensively on the growing homeless population. Gomez, who fled Colombia with her mother in the late 60s, was one of two Spanish-speaking nurses working at the DC Department of Health in the 1980s.

“You would see so many desperate young women, who had been raped crossing the US border and who had tremendous physical and social needs. But the Department of Health was like a hospital assembly line,” Gomez says. “You just didn’t have time to spend with people; you didn’t have the resources to get the specialty care they really needed and a system that was unwilling to recognize this population. My hands were tied.”

Frustrated, Gomez says she did what lots of people do when they don’t know what to do; she went back to school, heading to UC/Berkeley to earn a Master’s in Public Health. (She earned an undergraduate degree in nursing from Georgetown University.) After 18 months, she returned to DC where her mother, her only relative in this country, was living, and got a job with an HMO as a phone triage nurse. That didn’t last too long as Gomez felt she was just a technician whose job was to keep people away from the health system, and she missed the direct patient contact. Gomez got involved with the Mayor’s Office of Latino Affairs. It was here Gomez realized that without health data collection on Latinos and culturally appropriate services, this population would continue to be neglected, ultimately and unnecessarily affecting the well-being of entire generations to come.

So Gomez and the handful of colleagues started Mary’s Center in a basement apartment on Columbia Road to provide prenatal care to Latina women in a culturally appropriate setting. True to her larger goals, Gomez and her colleagues started to collect data and realized that 80 to 90% of the girls coming to the Center were under 18 and many were having their second pregnancies while still breastfeeding their first infant. She realized it wasn’t enough to help women have healthy babies—they had to help them in other ways as well.

“Once people felt comfortable, clients told us how we should grow. They would say, `How can you take care of us when we are pregnant and not provide family planning?’ so we started a family planning program. And then a pediatric program followed by the early intervention program for children with special needs and bringing our program into the school setting to support parents, teachers, and enhance children’s opportunities for learning and so on,” Gomez says.

The home visits were particularly important because they give the medical staff a true picture of their clients’ lives. A home visit, for example, will reveal that the pregnant women who says she is on bed rest actually has to climb several flights of stairs to get to her apartment and that she cares for several other children during the day, making bed rest all but impossible. With an understanding of what a client faces, the medical and other supportive staff at Mary’s Center can adjust their treatment and advocate for other appropriate services to ensure the birth of a healthy infant ready to learn and succeed in life.

Gomez, who lives in the neighborhood where the clinic is located, and her team continually take the pulse of the community, whether at the supermarket or on the street to understand what people want and need. She says that the clients were eager to have a community center dedicated to women and children. However, as time went by, many of the younger women wanted their boyfriends, brothers, and cousins to be able to come to Mary’s Center as well. That sentiment from the clients led the Center to start the teen clinic, where, on any given teen day, 60% of its clients may be men.

From the beginning, Gomez has been able to listen and to navigate the sometimes choppy waters of competing agendas that every nonprofit faces. A good example can be found in the way Mary’s Center got its name. At its inception, the Center received money from the DC government and was in partnership with Providence Hospital, a Catholic institution. The City wanted the center to have a nonreligious name while the hospital pushed hard for a religious name and suggested Vincent DePaul. Gomez was in the middle of a heated battle. She didn’t want to “name a Center dedicated to women’s health after a gentleman” but, at the same time, she wanted to be sensitive to the hospital’s position. And so the idea came to her to name it Mary’s Center, a name that satisfied both parties; depending on your perspective, Mary could refer to any woman or be a religious symbol.

Gomez’ ability to find common ground in her effort to advocate and serve Latino families has helped her build a formidable institution that is growing fast. Being named as a Federally Qualified Health Center late last year brings many benefits—from additional funding of $650,000 a year for each of the next four years to increases in Medicaid reimbursements and, perhaps most significant, the federal government now shoulders the burden of paying for malpractice insurance. In addition, Mary’s Center is now part of a network of other Federally Qualified Health Centers nationwide that provides opportunities for technical assistance and professional development.

The partnership with VPP has come at a good time, when the organization is wrestling with enormous opportunities for growth and change. Mary’s Center just completed an extensive business planning process that has both challenged and energized Gomez and her team.

“What the planning process did is stretch me to think about the kind of growth that Mary’s Center could really achieve,” Gomez said. “In the past we’d grown phenomenally but with little planning. Going through the process and analyzing why do we do this, whom do we do this with, and what we are doing has been reaffirming. I knew it instinctively but now it’s on paper. We now have a guide to help us achieve our goals and to remind us above all to hold on to our core values. We’re planning for 2009, which is unheard of for many of us in this field due to time and financial constraints. Before I acted as a nurse, doing triage. This process has helped me grow as a leader and not just to think about how much money we need today but what our organization can really become tomorrow.”

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    Heads Up Craft Packs in Local Michaels Stores

The Read & Create Craft Pack initiative spearheaded by VPP investment partner Heads Up and its corporate partners, Michaels, Scholastic, and Crayola is off to a great start, according to Executive Director Darin McKeever. “Six hundred of the craft packs were sold in the first four weeks of the test. We’ve been told that is about twice the average sales rate for Crayola's product offering group,” he said.

On Saturday, January 15, 2005, participating Michaels Stores also had a special benefit to promote the craft packs and the collaboration. Over 400 children and their parents came out to hear a reading of Pigsty by Mark Teague (a title in the craft pack series) and practice their crafting skills. “We’re thrilled at the results of this innovative collaborative effort,” Darin said. “The product puts the tools to provide the kind of rich, hands-on learning experiences that Heads Up is known for in the homes and classrooms of kids, parents, and teachers around the region.”

The six titles of the Read & Create Craft Packs are still available. Heads Up receives a corporate donation of 75 cents for each craft pack sold.

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Board and Investors
 
    In2Books in the News

In2Books, an innovative literacy program founded by VPP Founding Investors Nina Zolt and Miles Gilburne, was featured in recent positive profiles in Education Week ("Entrepreneurs' Literacy Program Takes Off in D.C. Schools," Jan. 5, 2005) and The Washington Post (“Online Mentoring Stimulates D.C. Students,” Jan. 24, 2005).

Both profiles document the success of the In2Books program, which uses the Internet to connect adult pen pals with some 6,000 second through fifth grade students in almost 70 District of Columbia public schools, as well as schools in Chicago. Students correspond with pen pals about carefully selected books they both read, which encourages them to think critically about the books they’re reading, to share their opinions, to develop ideas, to ask and answer questions, and to construct meaningful and expressive letters. Students also participate in a related literacy-rich curriculum in their classroom, about which their teachers receive special training, built around the research-based practices of some of the nation's leading educators and rooted in reading and writing about books.

The Education Week piece included an endorsement from William H. Teale, a professor of education at the University of Illinois at Chicago, who has worked with and studied the program, “In2Books helps raise achievement levels, but more fundamentally [it helps] kids in urban areas and in a poverty environment ... stretch their boundaries. These kids don’t have experiences or the associated vocabulary skills because they’re poor, ... but they develop an attachment to their pen pals, and they go places through their books.”

In addition, Nina Zolt recently authored an op-ed for Education Week (“Urban Mythbusters, Rethinking Some Things We 'Know' About Urban Schools,” Jan. 12, 2005) that sought to debunk certain myths about urban public schools, including:

The community doesn't care about urban schools:
Zolt cites the approximately 3,000 DC-area In2Books volunteer pen pals and substantial financial donations to In2Books as proof to the contrary.

Teachers in urban public schools are unable or unwilling to learn new skills:

Zolt cites the more than 300 teachers in In2Books classrooms who will voluntarily commit themselves to 21 hours of intensive professional development in six three-hour sessions throughout the school year.

To raise student achievement, urban teachers need to stick to the script:

Zolt argues that corresponding with a pen pal ultimately encourages students to become enthusiastic readers and writers at an early age—surely a benchmark of success, and cites an independent evaluation of Stanford Achievement Test-9th Edition test scores of a sample of over 2,000 2nd, 3rd, and 4th grade In2Books students who significantly outperformed district students not in the program.

Visit the In2Books website for more information.

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Communications
 
    VPP Announces New Management Roles

As a four-year-old entrepreneurial organization, VPP is moving to the next stage of its evolution by implementing a number of management role changes. Mario Morino continues his active role as VPP Chairman, relinquishing the Managing Partner role, to focus exclusively on the strategic planning, capital raising, and consensus building essential to evolving VPP and its continuation beyond 2006. Carol Thompson Cole assumes the role of Acting Managing Partner to manage the VPP portfolio and investment team, with this role to evolve to Managing Partner later in 2005. Steve Seleznow continues as VPP Partner, as well as the additional role of Chief Investment Officer, responsible for managing the new investment process and the development of investment strategies to guide and cultivate new investments and leverage portfolio investment partnerships. Shirley Marcus Allen, Fred Bollerer, and Eleanor Rutland continue as VPP Partners focusing on their areas of specialization—Shirley in public funding and appropriations; Fred in financing and asset management; and Eleanor as VPP Partner and Chief Financial Officer. Bios for team members are available on the VPP website.

Mario said, “We face some of the same issues as our investment partners as we seek to move beyond our first stage, where we have been a founder-centric organization, to our next stage with a management team in place. Fortunately, these changes are based on the quality of the people involved and the relationships, understanding, and trust we now have in one another that only time and tested interaction allow. These actions are the right ones at the right time.”

These actions, effective January 18, allow VPP to provide additional management focus and attention toward increasing its effectiveness in supporting the investment portfolio and a management structure and foundation upon which the next stage of VPP will evolve.

VPP advisor Les Silverman, Director Emeritus of McKinsey and Company, said, "These management changes reflect the commitment that the whole VPP team has to its mission—making a real difference in the lives of kids in the DC region and in the field. The team is willing to 'walk the walk' to ensure VPP's success."

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    Social Edge Discussion: Securing Corporate Sponsors

Kyle Zimmer, Co-Founder and President of First Book, hosts a discussion on the Skoll Foundation's Social Edge on how social sector innovators are partnering with private sector counterparts to propose value-based opportunities. She suggests five strategies for developing mutually beneficial partnerships.

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