Transcript: "Public Interest With Kojo Nnamdi."

Mario Morino discusses VPP and innovations in philanthropy on radio station WAMU July 9, 2002

NNAMDI: Washington, this is public interest. I'm Kojo Nnamdi. At a time when many corporate executives in the United States finds themselves the object of suspicion, sometimes scorn and outrage, along comes Mario Morino, who says, I am essentially going to be changing my life and no longer will you know me as a high tech entrepreneur, because right now I am concentrating more on a concept that he calls venture philanthropy. This software entrepreneur who started out in his basement in the 1970's and moved on, for those of you who join us on Tech Tuesday, moved on to being, becoming a major player in the software market, especially in the Washington region, joins us this hour. Mario Morino, welcome.

MORINO: Thank you, Kojo. Thank you very much.

NNAMDI: Good to have you here. You, too, can join this Tech Tuesday conversation. 1-800-433-8850 is the number to call. That's 1-800-433-8850. The e- mail address, PI@wamu.org. Mario Morino, a week or two ago you stunned many in the Washington region by announcing that you were severely scaling back your involvement with the technology community here. You've got a real estate company to take over your management of 11600 Sunrise, you announced you'd spin off the Netrepreneur project, and you're focusing the goals of the well-known Morino Institute to more closely align with your Venture Philanthropy goals. What's going on?

MORINO: Really what's going on is a continuation of a process that's been happening probably for several years, and it goes back to our roots, what we wanted to do to begin with, and I wouldn't suggest that the involvement is going down, it's changing.

NNAMDI: The nature of the involvement is changing.

MORINO: The nature, because we very much are still involved with the business community, because I think the business people actually still represent one of the key leverage points to helping a lot of the nonprofit sector today, in terms of support and financing and need, so it's still a very important piece, so yes, I've changed direction a lot, sharpened focus, but not reducing.

NNAMDI: When did you decide to do this? I've been reading that this has been taking place over the course of the last 18 months.

MORINO: Oh, easily 18 months. Actually, even longer than that. I mean, in many respects it's probably been going on for at least 3 years in some respects, but it goes back to the roots of actually what we started about -- when I left business in 1992, I really left with basically a concept of three things, children, learning, and communities, what we would do in those, and we were fortunate to get involved in a lot of the business side, but while we were doing those things, people didn't know we were actually doing things that dealt with children and inner city issues at the same time. It was in Nebraska and New Haven, Connecticut, and so our heart was always there, and working with the business community proved to be very useful, because it broadened our contact base, it gave us inroads to a lot of people, but our focus was always around issues of children, and now we're finally getting there with intensity.

NNAMDI: Children, learning, and communities, not very often the kind of projects that are associated with the corporate world today, even though we know that a lot of that does take place. It has certainly been your focus. What does that have to do with the way you grew up in Cleveland? You were born in a part of Pennsylvania. You were born poor. Your parents never really got past elementary school. Does that have anything to do with what you're doing now?

MORINO: Oh, probably everything at the end of the day. I use my growing up maybe as a metaphor of what we're doing today. It goes back to a comment. When I broke out in 1992 to go from the corporate world, I spent a year going out and talking to people, and somebody put me onto an article that Howard Gardiner wrote, a person of multiple intelligence, a theory person, and he had a comment, and he said, our schools never failed our communities, our communities failed our schools, and it was so striking, because at that time I had just been back to Cleveland, and I was back in my old neighborhood, and it was so apparent -- I could -- if I could just for a moment just describe the 1950's versus the 1990's. When I grew up, we grew up in a low income area. We were probably legally poor, but we were not in poverty. I want to make a very big -- there's a big distinction, and many people don't understand how deep that runs. We were predominantly a blue collar environment, people working in the mills, working in refineries, in the classical tough ethnic neighborhood, but with the shortage of money, we had everything else. You really had neighbors, you had extended family, you had playgrounds, we could play ball in one corner, we could play hoops, we had YMCA's rec centers, we had libraries, we had great teachers. If you went back to the same environment today --

NNAMDI: And you did.

MORINO: -- and I did, and you go back to the same house, let's say the same child is born to a family, with the same intelligence, my argument is that child won't have one one-thousandth of the opportunities I had in my life, because the infrastructure around that family is so different. If you took that neighborhood today -- the school is there, and it's been remodeled, but I'll bet it's a less effective school than it was 37 years ago.

NNAMDI: The library no longer exists.

MORINO: The library is gone, the Y is a shambles, the rec center where we played ball is gone, the fields are gone, many of the stores are boarded up because all of the manufacturing jobs are gone, so what we knew as the middle class low income jobs just -- the economic base was ruined, and you have all the inherent issues that surround those kind of economic cases, so it's a dramatically different environment.

NNAMDI: Nevertheless, you decided a couple of years ago to move your family back to Cleveland.

MORINO: Oh, yes.

NNAMDI: How come?

MORINO: Well, we're not in the same neighborhood, number 1. (Laughter.)

MORINO: Although I bring my kids there on purpose. We moved back for really a lot of reasons. First of all, we love this region, and when I say the region, the Washington region. We have gotten so much out of this region that benefited me and my family, and I want to make that really clear, and why our focus stays here, but it was a much more rounded point. It was getting back to my roots. It was important to me, and my wife, Dana, was very supportive of that to begin with, and two, we have a large extended family. My wife's family is here. We're very close to that family. Mine is even more extended, and I was trying to connect back to my brother and sister, my elder ones. We lost my parents in 1995. But getting back to that broader ethnic family tradition, getting back to where life is a little more basic. Our important points were our family.

NNAMDI: But indeed, as you pointed out, your focus will largely be here in the Washington region.

MORINO: Right.

NNAMDI: You're going to be spending 3 or 4 days a week here, even as your family lives in Cleveland. A lot of people have on their minds, in the wake of Enron and the WorldCom scandals, exactly what the proper role of the business community is, and of course President Bush just made a speech in which he talks about how these institutions should be regulated in the future, but back in February, after the Enron collapse, you called on Congress to proactively enact major reforms to protect consumers. You said at the time you were convinced that a number of corporations had problems similar to Enron and Arthur Andersen. Obviously, you've been proven right. What should Congress do?

MORINO: I'm not sure I'm smart enough to answer that question, and I think the issue goes much deeper than even what the President discussed today, not to take anything away from his talk. I think there does need to be measures, because I mean, capitalism is wonderful and it's great, but it's not a panacea, so some restrictions have to be put -- my fear is that there's not an overreaction today. At the core of this issue, it gets down to the moral fabric of business. You can legislate all you want, you've got to get at the character base, and I think what's needed more than Congress are business leaders, the right business leaders today that have the moral conviction and have the ethics to step forward and claim their flag. I think that's more important than anything else right now.

NNAMDI: You can join this conversation with Mario Morino by calling 1-800-433-8850. That's 1-800- 433-8850, or you can communicate with us by e-mail at PI@WAMU.org. Venture philanthropy. It's a concept, a phrase that most people I can assume are unfamiliar with. What does it mean to you? Venture philanthropy from our standpoint is away to leverage the grants, the money we would offer to a nonprofit organization to help them gain size, strengthen themselves, to serve children more effectively, better, and it goes beyond just a check. It involves being somewhat strategic in the selection of who you work with. It's very clear that we get engaged in a nonintrusive way, and that we leverage the things that we can bring to the table to combine with their skills and their leadership to create a better goal going forward, all for the benefit of children.

NNAMDI: There are two aspects of nonprofits that concern people these days. One is how much time they have to spend raising money, to the point where people believe that their clients tend to be not necessarily first and foremost the people they serve, but the people from whom they get grants and funding. How can you change that?

MORINO: Hopefully over time that's what we would like to influence, and I think what you described is a very appropriate definition. First of all, organizations themselves have the liberty to strengthen themselves. We today don't allow a nonprofit organization easily to have the same kind of tools that their counterpart in the business world would have. That means access to capital, access to talent, access to the resources, once it's formed. We have all kinds of support to help them get formed, but once there's a good model in the community, they seldom have the resources to allow that model to really grow and benefit many children. I think if anything happens, changing the funding mechanisms, reorienting those to allow that funding of growth and improvement becomes a huge issue for the field, and I think that's what's one of the really critical changes that could take place over time, and I think if that was done, we would see an increase in the flow of capital and talent into the nonprofit sector.

NNAMDI: Is there a nonprofit culture, if you will, that is resistant to that? Some people would be concerned about venture philanthropy blurring the lines between nonprofits and for-profits. Is that something you have to take into consideration?

MORINO: Oh, absolutely, and very justified, too. I mean, I think there are such cultural differences, number 1, and I think one of the biggest issues is overcoming the cultural barriers and getting to the trust of the organizations, but yes, there is great fear, and there's much debate today about whether, should a nonprofit in fact be financially sustainable by fees or not, and I think that's relevant to a sector and to a nonprofit as opposed to a generic issue, but the reality is today that whether it's a more professional funded element, or whether it's better advocacy, working with Capitol Hill or government and state agencies for public- private funding, or whether it's simply more fee-based structures they can engage, there needs to be a more strategic way of looking at helping a nonprofit get a sustainable financial base.

NNAMDI: How open will nonprofits be to that? On the one hand they say, here comes Mario Morino. Well, he at the very least can give us the money. Wait a minute, he's telling us how to run our nonprofit. We don't know if that's what we want to do.

MORINO: Again, a very valid criticism, or observation. The last thing we would want to be accused of is telling somebody how to run their operation. I think that's the inherent mistake of a lot of people like ourselves. I'll be very candid about that. What I think has to happen, though, is that we can only work with somebody who's receptive to the model. We could never go to somebody who didn't accept the premise. It would be foolish. It just wouldn't work. Contrary to what many people think, there are very few people in our nonprofit sector, the leaders, that are not receptive to the support in a public versus a private setting. There are many concerns about it, don't get me wrong, and especially -- and justified concerns, because of how many people approach us, but when you get down to saying, we're going to help in a non-intrusive way, we tend to get a very good reaction.

NNAMDI: How, if you can make a clear distinction, would you make one between venture philanthropy and traditional philanthropy?

MORINO: Well, it may be hard to do, candidly. I mean, I think there's been too much focus on terminology in all of this. It may be one of the biggest disservices we all did in the last 5 years. If you went back to --

NNAMDI: Which means, I guess, the focus should be on performance.

MORINO: Exactly right, or I don't know exactly right. What you're doing today in the field, and not on the terms. In many respects, venture philanthropy is not new at all. Rockefeller did it probably better than any of us can dream about, and he did exactly -- Rockefeller in (inaudible), they got very engaged. They were very strategic. They leveraged things. So we're not as new as everybody thinks we are, number 1. I would say that what is different is the engagement, getting directly involved with the grantee. It's not totally unique, but it's more unique than most, but also leveraging the resources is actually quite unique, and also the size of your funding that's dedicated to help an organization grow and strengthen itself. It's those combination of factors that make it more unique in the process than the traditional philanthropy.

NNAMDI: We're talking with Mario Morino. He is a former software entrepreneur. He is chairman of the Morino Institute, chairman of Venture Philanthropy Partners, and a special partner of the private equity investment firm, General Atlantic Partners. You can join our conversation. Just e-mail us at PI@WAMU.org, or call us at 1-800-433-8850. Does your reputation for taking or having innovative approaches to problems help in this situation to open doors for you?

MORINO: Maybe you give me too much credit, number 1, but I'm not too sure it does. What I think has opened doors for us, candidly, is connections. I mean, very candidly. One of the striking realities that I came to about 4 years ago is, in spite of all the things that I thought we did, and did well, the reality is, our single biggest strength was our tie to the business community to get access to resources and make neutral connections for the nonprofits we're working with.

NNAMDI: We're going to take a short break in our conversation with Mario Morino. When we come back, we will continue the discussion of what's known as venture philanthropy, the definition not being as important as the ultimate reality. We'll be right back. Welcome back. We're talking with Mario Morino. You know him well as a software entrepreneur and chairman of the Morino Institute. He's also chairman of Venture Philanthropy Partners, and he's talking mostly this hour about venture philanthropy, but you can't get Mario Morino here without talking some technology, but let's go back before that. Tell us about the way you found to finance your higher education when you were in college? (Laughter.)

MORINO: Well, I'm laughing because we didn't have much money to pay for my college education, so I scrounged and got a number of small scholarships, you know. I went to Ohio University in Southern Ohio, and between the scholarships, working summer jobs, number 1, and then at school I was a tutor, I washed dishes, and I was a counselor, and collectively I found myself working more than 40 hours a week for 30 cents an hour, I realized by the time I was a sophomore. (Laughter.)

NNAMDI: Well, of course, your first job was cutting grass at a reservoir, it's my understanding, but one of the ways you reportedly financed your higher education was, you got a job doing data processing at General Motors, and you found some loopholes in the rules of the education reimbursement program, that somehow ended up with GM paying your tuition.

MORINO: That's true. What happened is, again, I mentioned I was at Ohio University. My first 2 years I was working all these odd jobs, and it dawned on me that I was making 30 cents an hour and working ridiculous hours, so I thought if I'm going to do this, I might as well get a real job and make a real salary, and I was very fortunate to land a job with General Motors, and then with Eaton Manufacturing, and in both cases, what occurred -- and I didn't realize it -- I was taking a full course load, 15 to 18 hours at that time, and working full time, and supposedly no one had ever done that and applied for tuition refund, and at both companies I got full tuition refund while I was going to school, and supposedly both policies were changed once I left the firms.

NNAMDI: They said, Morino's been here, those policies have to change. What did you start doing in your basement in the 1970's?

MORINO: Basically, the way the Morino Company was formed was around the issue of managing technology of corporations. If you went back -- if you took a company today like a Boeing or a General Motors, their annual budget for the use of technology is well over $1 billion for computers, networks. If you went way back, the sixties and seventies were the beginning of that, and people were beginning to realize that it was tough to manage the technology itself, and so we began to build tools and products that would, in fact, measure how a computer was being used, when it went down, how it broke, what its problems were, and we'd be able to report that to the organizations so that we would begin to manage that resource for the company. And that became -- between ourselves and maybe 10 other firms in that period of time, late sixties, early seventies, that emerged and became what is today a systems management industry. It's a multibillion dollar industry.

NNAMDI: And it has shown the emergence of two different cultures, if you will, in the Washington region. You have spoken about the two-technology world that exists in this area. Can you describe them?

MORINO: Well, I'm not so sure that there are two now.

NNAMDI: They're merging now, aren't they?

MORINO: Oh, yes. They're really -- but if went back to the early nineties, and probably preceding the nineties, but no one really paid attention to it, is that by the time of the early nineties, you really had the more traditional technology businesses, which by the way today are holding up the rock for us, I might add, which was the consulting business, the systems integration business that was initially serving the federal government, and then moved out to the US State governments, global governments, et cetera, and you had the more irreverent entrepreneurial force coming up that was the software industry here. By the mid-nineties, though, that became the Internet industries here, and it was very formidable. I mean, it was the MCI's and the AOL's and tons of other companies. In fact, I think the number was 4,000 or 5,000 businesses, actually, in that region, and that really were two cultures for a while, and the cultures were the more irreverent base, and the more traditional base. They both merged, they both have come together, and they both have a little of each other's characteristics today.

NNAMDI: Indeed, and Mario Morino was here while that process of evolution took place here in the Washington region. He has now moved his family to Cleveland, even though his focus in venture philanthropy will continue in the Washington region. Let's go to the telephones and start in Cleveland with Ken. Ken, you're on the air. Go ahead, please.

CALLER: Hey there, Bobcat. Yes, I'm -- Bobcat is the mascot for OU, and I'm an alumni there, too. There's too many quirky kinds of parallels. I'm calling from the Cleveland area, and I'm in technology. I'm also heading up a group of guys called Cleveland Lenix Users Group --

MORINO: Right.

CALLER: -- and we just incorporated about a year ago, but we've been around for, I don't know, 5 or 10 years, and this kind of philanthropy work comes around to us, comes, you know, up as a topic all the time, but the City of Cleveland's archaic computer system, I personally tried to get in contact with people there to volunteer efforts that the members of our group wanted to put in for the City of Cleveland. In fact, I got an e-mail from somebody this morning in our group who said, I've got all this hardware, what we ought to have is a list of people that accept donations of it, and this is by no means a new topic. You know, this kind of thing pops up every once in a while, so we're looking for outlets to do things, and we need contacts.

MORINO: You want to go -- first of all, on the West Side, it's 62nd, a store, Bill Callahan, a long time --

CALLER: 62nd is a store?

MORINO: Yes, 62nd is a store on the West Side. Bill Callahan runs something called the Cleveland Stockyard Area Development Association, and I'm sure he can tap you into all the resources in Cleveland. Bill is a community activist supreme. He's been the person with individual vision, efforts in Cleveland, or one of the people I should say. He would be very effective. I'd also tie into the Cleveland Housing Network, who has actually done some excellent work in technology in the region, and of course you could probably with the Northeastern Ohio Software Association. I think it's Ron Kofler who runs that, an excellent man, that could give you good insights.

CALLER: Okay.

NNAMDI: And he's not reading from any notes at all, Ken.

CALLER: Pardon me?

NNAMDI: He's not reading from any notes at al.

CALLER: I'm trying to take the notes. I missed the last one. That was Steve who?

MORINO: The last one, and I hope I'm saying his name right, his name is Ron Kofler. There's a Northeastern Ohio Software Association.

CALLER: Oh, yeah.

MORINO: And I think they could connect you in the groups as well.

NNAMDI: Okay, Ken, thank you for your call.

CALLER: Hey, thanks much.

NNAMDI: Back in Washington, here is Jennifer. Jennifer, you're on the air. Go ahead, please.

CALLER: Hi, This is Jennifer. I work at City Community IT Innovators. I think you know what we do.

MORINO: Right.

CALLER: We provide tech support to nonprofits here, and my question is, what do we tell our nonprofit clients who repeatedly say that it's hard to raise dollars for technology infrastructure? They say that funders like yourself, like foundations, don't really want to pay for the boring stuff, the ongoing maintenance, new servers, redesigning a web site, and that kind of thing. Unless it's related to programs, funders are reluctant to pay for the high cost of the infrastructure.

MORINO: Unfortunately, what you describe is too accurate. Getting money for technology projects is quite slim, not only here, but nationally. There are some foundations who focus on it to a certain degree, Surdna out of New York, Kellogg, Battle Creek, Packard on the West Coast, et cetera. But the advice I'd give is, you have to turn it inside out, and it's not unlike what happened in the commercial world. I think if we just try to get money for technology by itself, it's really hard.

CALLER: Right.

MORINO: If you can couple that into a benefit, or to a solution of the nonprofit, it's somewhat easier, but it's still problematic.

CALLER: The nonprofits I think still feel they have to hide that inside of a program request and hope that people aren't noticing that there's an extra five computers stuck in there.

MORINO: That's okay. We did that in business for years. (Laughter.)

NNAMDI: Jennifer, thank you for your call.

CALLER: Thank you, Kojo.

NNAMDI: An ongoing problem. I guess one has to show the relationship between the technological infrastructure and the service to, in your cases, children and learning and communities.

MORINO: Absolutely, Kojo. We actually are sometimes a critic of much of the technology, where it's going, because it's so technology oriented, as opposed to really dealing with the issues of children. We were fortunate, we undertook project in the mid-nineties with a group in New Haven, Connecticut, LEAP, which is one of the better city programs in the country, and we learned first- hand that technology was probably the least of the issues. It was about all the social issues that we had to deal with in function, and recognize, but the power was enormous, too. I mean, I could tell you, there was one story that just still today rivets me.

The idea was a national network of inner city centers, and the two groups, the learning center that we supported that was built by LEAP, a third grade class, fourth grade that would come in weekly to do an exercise, and one of the individuals, Andrea Schorr, who ran the program, created a program called Journey Across the Country. And imagine the nature of this. The kids would come in, and for an hour would get on the Internet, and they would start in New Haven, Connecticut, and the other kids started in Oakland, and they had to traverse the United States, and each day they would take a new city and research that city, find things about the city, its mores, people like them, and they would have to write what they found in a journal. They would communicate that to their counterpart on the East or West Coast. The kids in this process learned history, they learned research, and you could actually see the quality of their writing and communication change as they traversed the country. Now, it was a very simple element of technology involved, but it was remarkably educational in its value. It was basically project-based inquiry. It was very interactive, it was something relevant to their life, and it was one of the most marvelous programs that we've seen.

NNAMDI: Do you find that there is a tendency -- and I guess you would observe this better than most other people, that there might be a tendency among some nonprofits to focus on the technology itself, rather than, as you just pointed out, what the relatively simple technology can do in terms of the kids' learning processes.

MORINO: Yes, but that's just not nonprofits. I mean, that's people. And go back, you want to talk about part of the bubble. Part of the bubble was focused on technology, versus what it was going to do.

NNAMDI: Back to Cleveland. Here's Dave. Dave, you're on the air. Go ahead, please.

CALLER: Hello. Thank you for having me on.

NNAMDI: You're welcome.

CALLER: Mario, first thing is, I teach at Case Western at Weatherhead here in Cleveland --

MORINO: All right, Dave.

CALLER: -- on entrepreneurship and things.

MORINO: Right.

CALLER: We need somebody to teach nonprofit entrepreneurship, so -- (Laughter.)

CALLER: -- keep that in mind.

MORINO: What's your phone number?

CALLER: We had an excellent person doing it, but unfortunately we lost him.

MORINO: I know you did. He was great.

CALLER: Yes, so if you're going to be in the area --

MORINO: You know I'm on the board.

CALLER: I've heard that rumor.

MORINO: You've heard that rumor, Dave? We're getting involved with Lev Gonick’s efforts there with Technology Commons, which is a great project going on.

CALLER: What do you think about the role of entrepreneurship in rejuvenating rebuilding both the inner cities and older cities like Cleveland? I am thinking of some of the work that you're doing at the NCLE and others.

MORINO: I think it's very important, and I think it often gets overlooked. The problem Cleveland faces is one of culture, candidly. I mean, and it's one that the dots don't connect well. You know, I've said this -- I try to stay off the radar screen, but you have a lot of established players that see business a certain way, and the entrepreneurs hardly make the radar screen up there, and what needs to happen is, some of the people who have been successful have to step forward and take a much stronger role in entrepreneurship. I think entrepreneurs need to be led by entrepreneurs.

CALLER: Yes. Yes, I agree. I'm glad to have you in the area. Thank you.

MORINO: Thank you.

NNAMDI: Dave, thank you very much for your call. We come back to Washington, where John in Washington, of course, awaits us. John, your turn.

CALLER: Yes, it's a very interesting discussion, and I am into information. Having published my own book in 1978, and making sure I was clear on copyright sources, I discovered a lot of copyright information -- for 20 years I've cleared information that can be digitized, but found that out of used books and textbooks and things like that, which I've cleared, and my own personal library is around 2,500, plus titles I've cleared out of the Library of Congress, which makes me a potential publisher, maybe 80,000.

NNAMDI: John, where are you going with this?

CALLER: Well, that's why I'm interested in this nonprofit thing, because I'm sure that nonprofit companies like everybody else has to pay huge publishing premiums from textbooks that are available. Most of the basics, mathematics, for instance short-cut mathematics, all that stuff has been done before. So I talked to a professor of mathematics sometime ago. I said, well, how did you print up and copyright a book on every 5 years on the campus when the Greeks discovered it 2,000 years ago, and he said, an interesting question. He said, what we do is, we take one, or several items, the source of which can be either before 1923, which is automatic public domain --

NNAMDI: I'm not understanding you at all, John.

CALLER: Well, I'm saying that there's a lot of free information that's available cost-wise that I come from the bottom up. In other words, I can create so- called software from other more or less empirical --

NNAMDI: I'm not sure if Mario Morino understands you, do you?

MORINO: I understand what you're talking about, but I guess, what's the question or point you would like to talk about?

CALLER: The contribution of software to nonprofit companies, where I think, as a gentleman earlier pointed out, that nonprofit companies that nonprofit companies are really costwise, cost-concerned, and if they have to pay textbook poachers, all kinds of --

MORINO: Oh, so you're saying instead of paying textbook publishers, you just contribute software to them. Well, I see where you're going. It's not as simple, maybe, as you imagining. The largest consumers of books would be the schools, and that's highly problematic to unfortunately do what you're suggesting just because of all the bureaucracies that exist there. I wouldn't defeat it, but it's very difficult. In the nonprofit sector itself, candidly, their problem isn't free software, their problem is even having the resources to even run the software.

NNAMDI: Thank you for your call, John. This is Public Interest. I'm Kojo Nnamdi. I mentioned innovation earlier, and you implied that you might have gotten more credit than you really deserve. You do take an innovative approach to creating a unique office environment. Talk about 11600 Sunrise, what it offers, and why.

MORINO: 11600 Sunrise is a building we built, I guess in the late 1990's as our home for the Morino Institute, actually, and although many people think it was new, it was simply building on the very things we did all the way through the late seventies and early eighties. It's predicated on several premises. It's about 160,000 square foot. We have about 18 client- tenants in the building, all of which are on a subject area about technology, so we have the population is split, with half venture capital firms and half technology businesses, or either Internet, IT software type firms. The idea behind it is really simple. It's called a knowledge cluster, and it's working with people who have a like mind, and you find things just happen, because whether it's in the hallway or playing a ball game, you're in the same space. You know, there actually is a fusion of ideas. We almost call it sometimes it's a physical web.

NNAMDI: Well, they also called it Planet Mario, didn't they, a few people did? (Laughter.)

MORINO: But we also have a lot of -- I mean, it's designed to have a fun environment -- now it's close to number 1. It's about a fun environment, number 2, not to be fun, but to be productive. The comment I give you on this is that typically in the software industry, not that other industries aren't the same, but you saw it publicized with this in the bubble, but if I went to back to the seventies, the sixties, and the eighties, we slept on the floors, we worked 100-hour weeks, we did all that stuff and we did it a lot. We didn't do it for a couple of weeks, we did it for long periods of time. If you're going to kill yourself like that, you want to take a break, and you want to get some enjoyment out of it, so we have things like a nice cafe, we have a fitness center, we have a gym, we have big convening areas that people can get together, and it creates a sense of community, and it's about creating a sense of community, and I think that's really important. I think real estate, people who look at it as a building miss the concept that it's about people, and how people interact together.

NNAMDI: Well, the people in the Washington region who have tended, before a software industry and high tech came here to dominate, were people like lawyers, accountants. Any of those in Planet Mario?

MORINO: No. No. Then again, not -- actually, and I say that because it's actually part of the design. It's not to exclude them. They're very much needed, and they're very much there, but what I go back to is a premise that even surrounding the entrepreneur program that we did, we focused the entrepreneur program -- I think purity of audience is critical to creating a community, and so the idea was to get people who were entrepreneurs, or those people who were directly working with them, the funders, to be the first community, your second derivative community, all of the service providers who support them, but if you don't have the first, there's nothing to come to the trough for.

NNAMDI: And if there are no lawyers in 11600 Sunrise right now, even though Mario Morino isn't operating it, by the time this broadcast is over, there will be enough lawsuits filed against it to make sure that there are. We're going to take a short break. Our conversation with Mario Morino about venture philanthropy and other things that he's involved in right now will continue. You can still join us. We have some lines open, 1-800-433-8850. For those of you already on the line, stay there. If you can't get through, you can e- mail your question or comment to us at PI@wamu.org. Even lawyers permitted. We will come right back to our conversation with Mario Morino, former software entrepreneur and chairman of the Morino Institute, also chairman of Venture Philanthropy Partners, and a special partner of the private equity investment firm, General Atlantic Partners. Mario Morino, some people would argue that not all of business strategies translate well in the philanthropic realm. What kinds of business strategies are employed which can be adapted, and others which may not apply at all?

MORINO: Well, again, I think your comment is very true, and I think sometimes is grossly oversimplified. I'd sometimes like to say it's less about business than it is about management, and I think it's really about managing one's organization. I don't think there's anything inherently different in the management process, per se. I'm not talking about mission and spirit, but the management process between an organization when it's a for-profit or a nonprofit, but what happens in the nonprofit world oftentimes is, the leaders aren't given the resources to manage the way a person in the for- profit world would have. They're not encouraged to take that time, they're not funded to do quality analysis, they're not funded to do long range planning. It's really simple why the differences exist. It's not that the desire and intelligence is not there. It is there, and actually quite good, but the encouragement to do it doesn't exist, and I think that's the fundamental difference. The encouragement and support to, in fact, implement very similar practices, and not all business things work in the nonprofit world, in the same way that certain nonprofit practices would not work in the commercial world. The question is, to look at things. The management of people is people management no matter where you are at, and there are high similarities to things like that. Looking at marketing -- everybody avoids the term, marketing in the nonprofit world. The reality is, fundraising in the nonprofit world is fundamentally good marketing. Can't we couch that in a less -- you know, so it's not high level advertising glitz stuff, but fundamental ways of knowing who are you trying to target, and can we be more effective in our fundraising approaches with targeted direct mail response. That's fundamental marketing, and that can have great impact on an organization's fundraising ability, so I mean, there's a whole series of things that can help with nonprofits, but I'm careful to say that one is better than another. What you see is that not having the encouragement and the support to implement those approaches.

NNAMDI: What you're doing now clearly has to be based on a certain confidence, and optimism, because in the final analysis, when you're talking about children, and learning, and communities, you're talking about having a fundamental effect on communities such as the one you grew up in in Cleveland that can ultimately transform those communities in a way that nonprofits have not been able to do that in the past. What's the basis of your confidence?

MORINO: Well, first of all let me be pretty clear, Up First Fund is a $35 million fund, and for us to assume we're going to have systemic change in any community, even in the neighborhood with that amount of money is just a far reach, or a foolish assumption. We're trying to take $35 million and work with a number of organizations here, let's say it's 12 or 15, to demonstrate the value of their leadership and our support to see greater benefits for children. Longer range, what we hope that translates to are differences in the psyche of the donor on a national scale, so that nonprofits will be encouraged more to look at their management, those models that are more effective are funded easier, they're able to get capital easier, they're able to get the right talent easier on a national scale basis. If the change is to occur, the nonprofits -- there's parts of the nonprofit sector that simply have to scale, and row, and become stronger, because there's been a gradual shift of services from Government to the nonprofit sector, but not a corresponding investment in the infrastructure of those sectors.

NNAMDI: We got an e-mail from Micah who says, the Morino Institute sponsored me as the African delegate along with other young Internet enthusiasts from all over the world to the 1998 Internet Society Conference in Geneva, Switzerland. It opened a new world for me. For that I will always be grateful. My question for Mario, is the Morino Institute involved in any philanthropic technology ventures in Africa?

MORINO: No, we're not. All of our work here is focused in the United States, and the vast majority of our work is focused right here in the Greater Washington Region, and by the way, just in closing, you should owe the thanks for that trip to Laura Breeden, who organized it and convinced us to do that.

NNAMDI: Okay. On to Mike in Cleveland. Mike, you're on the air. Go ahead, please.

CALLER: Hi. Thank you for taking my call. I believe I have a clarification. The previous caller, John from Washington --

NNAMDI: Yes.

CALLER: -- was trying to suggest, I believe, a philanthropic enterprise in which you would download information, free information from the Net, or from whatever source, to supplant or replace textbooks --

NNAMDI: Yes.

CALLER: -- which are a major cost for school districts and grassroots organizations. I believe that's what he was driving at.

NNAMDI: Okay.

CALLER: And I just wanted to thank you again for your philanthropic work.

MORINO: Thank you.

NNAMDI: Heya, Mike, thank you for your call, and for clarifying the point that John was trying to make earlier. We move on to Pam, in Maryland. Pam, you're on the air. Go ahead, please.

CALLER: Hello. I am the artistic director of a new nonprofit chamber ensemble, and 99 percent of our funding at this time goes to support our projects, and I am looking for advice as a new nonprofit to employ the practices of venture philanthropy.

MORINO: Well, let me just start -- well, I'll try and give you some advice. In terms of our approach is, we work out ourselves, and we're looking at basically co-organizations dealing with fundamental issues around charter schools, educational issues, after-school programs is our funding base who we look at, and we don't accept applications, we go out and we learn from the community, by the way, who to deal with and who to approach. Others in the region who are doing a lot of very good work, you have the Meyer Foundation, run by Julie Rogers, is doing excellent work in helping younger organizations deal with capacity funding issues. Marian Holohean has done some of the leading work there as well, and more recently the Washington Regional Grantmakers Association, led by Kae Dakin, has won a $1.2 million grant from the Ford Foundation to help nonprofits with capacity building in the region.

CALLER: Very good. How can we -- we've also tried to use the personal relationships that you mentioned. Do you have any advice how we can further those relationships?

MORINO: I think there's where -- the way you compose your board of directors becomes really critical, getting people on the board that can add value to your organization, but also people on the board who will open you up to new contact bases. I mean, getting leverage to different contact points, different pockets within the region is very critical.

NNAMDI: Pam, thank you for your call.

CALLER: Thank you.

NNAMDI: Ed, in Cleveland. Ed, you're on the air. Go ahead, please.

CALLER: Thank you for taking my call, Kojo. While I'm at it, say hello to H. Beecher Hicks for me.

NNAMDI: Sure. H. Beecher Hicks is a very prominent pastor in Washington. Go ahead.

CALLER: Right. We discussed him on your visit here in Cleveland one time when I had a chance to meet you.

NNAMDI: Yes, Public Interest did visit Cleveland a couple of years ago.

CALLER: Right. Thank you for coming. I'm calling because I sort of come at your double-breasted. For some years I was very close to the nonprofit field, and for the past 15 years I have been working with what is essentially called middle market entrepreneurs. I work with presidents and CEO's. In addition, I've had a management consulting practice in which I've done considerable skill-building from Fortune 100 companies down to just the ordinary middle market company.

NNAMDI: So you've worked both sides of that street.

CALLER: I have worked both sides of the street, And I really do applaud the effort that is going on here. I picked up on the conversation a little late. I didn't know if the institute was located in Washington or in Cleveland. I wasn't quite sure about that.

NNAMDI: It's located in Washington, DC

CALLER: You are in Washington. Well, our organization is an international organization, over 7,000 middle market CEO's that are involved, and in the Cleveland area one of mine, for an example, has started Project Love. I don't know if you're familiar with Project Love or not. It has grown substantially in terms of working with high school young people, giving them a sense of how to work together and to set goals for future plans, things along this line. It has its own executive director. So the field is wide open in terms of this, and I just wanted to say that one of the efforts of people who are trying to reach out don't think terms of the Fortune 100's, or 500 companies. I have probably dealt with 100 middle market companies that have revenues anywhere from $8, $10 million up to $250 million, and I find these people very much committed not only to building fine organizations, but they have a community conscience as well. Some have been leaders in the Cleveland community in small business enterprise, areas like that.

NNAMDI: Is there a tendency, Mario Morino, for nonprofits to focus on Fortune 500 companies?

MORINO: I'm not sure the focus is there much at all, if you want a candid opinion, and I mean, it gets back to the point about who you're chasing. More money comes from people than companies, first of all. I think that's a misconception out there, and I think to the point the gentleman is making here in Cleveland, a group that I'd refer you to that is just forming now is the Cleveland Social Venture Partners Group, which emanated out of Seattle, but I believe the founder, one of the founders is Bob Brumbaker. It's being supported by the Cleveland Foundation, and its objective is to pool individuals, entrepreneurs, and business people from the Cleveland region to in fact help in smaller projects, much as you're describing, and I think getting at that middle base business you're describing is a tremendous resource to open up, not so much to get the business, but to get the people in those businesses, and I think your point, you're on target, and I would suggest you look at the SBP model as being emerged in Cleveland right now.

NNAMDI: Ed, thank you very much for your call. This is Public Interest. I'm Kojo Nnamdi. Nonprofits obviously will make mistakes from time to time, but what are some of the more common mistakes that philanthropists make?

MORINO: Boy, putting me on the spot on that one.

NNAMDI: Well, actually, I'm leading up to trying to tell you a story about philanthropists who often try to do good without knowing their communities that well, and you had at some point a seminarian -- (Laughter.)

NNAMDI: -- in your hometown who tried to help out the kids in your neighborhood. That's the story I'm trying to --

MORINO: Let me tell you that story. Again, I'm very careful to say that we weren't a totally poverty based area, but it was a tough area, and you didn't get away with a lot of stuff, and we always resented people coming in to tell us how they were going to help us, you know.

NNAMDI: I know that.

MORINO: And you would get cops and priests and teachers coming into the playgrounds in summer, and a lot of them were really good, and you knew right away that they were sincere, and you got along with them and you respected them, but every once in a while you'd get one of these people come in, and they were going to -- they were the do-gooders, they were the righteous ones, and you know, you had zero tolerance for them. When I was a small kid -- I was probably about 10 or 11, but I played ball, and all the guys we played ball with were a lot older than me. Well, they really got ticked off at this guy. He was a brother from the seminary, so the way the school was structured, the back of the school you couldn't see from the road, so they took the guy, and they tied him to a third floor fire escape, and they left him there for about 2 days, you know. Suffice it to say, he didn't show up to help us any more.

NNAMDI: That's because he didn't know the community that he was dealing with --

MORINO: Exactly right.

NNAMDI: -- consisting of Morino's thugs, but that's okay. (Laughter.)

NNAMDI: Let's move on to Vanessa in Rockville, Maryland. Vanessa, you're on the air. Go ahead, please.

CALLER: Hi. My name is Vanessa. I work for a national nonprofit organization in the education department, and one of the difficulties that we have getting funding for some of our initiatives is trying to educate the funders about the impact that teacher's training has, and using technology for teacher training. A lot of the funders would rather have their money go directly to children and local nonprofits, but as a national nonprofit, our philosophy is to work with the groups themselves, rather than with the clients themselves, so that the group will be in a better capacity and better shape to then be able to service their clients, which are usually minority communities, so I was wondering if you could help us, give us some ideas of how maybe we can frame the issue. The main use that we want to use technology for right now is to create a virtual community of teacher training, especially for new teachers that are going into urban centers to teach, and so they don't seem to understand that a better teacher eventually helps a better kid, or the kids themselves.

MORINO: Well, let me point you to something that we've developed and is now sitting with the Educational Development Corporation in Boston. It's called the Youthlearn, a web site. It's at Youthlearn.org, and it is actually an online community of people who work with children, and many of which are teachers, and you might find it to be right on target to what you're looking at. We developed that over the years. It has actually gotten to be a fairly prominent resource for people in after-school programs, and programs for in school and the use of technology, and as I have indicated, we have basically moved our intellectual property up to the EDC Group, who I'm sure you know in the nonprofit space, one of the premier groups in that space, and we help fund the effort for them to staff that, and Vivian Gilfoy, the executive there, and Laura Breeden, have done an excellent job of moving that out into the field, and Tony Streit has come on as its executive director, so that's point number 1. Point Number 2, groups that focused in this area are people like Zoe Baird, at the Markle Foundation, the Children's Partnership, one of our groups from the West Coast, other groups like Daniel Ben Horin's Compumentor out of San Francisco, but the problem you're going to face is that it's difficult enough to get money for funding of technology to start with, and it's even more difficult for an intermediary to get that money, because it's one step away. It's not impossible, but what I'd urge you to do is do very careful donor screening so you can find an individual who is going to have a heart about teachers, about teacher development, and about some linkage of technology, and then focus your fund development efforts on those people.

NNAMDI: Vanessa, thank you for your call.

CALLER: Yes, sir.

NNAMDI: Mark Warner is now Governor of the Commonwealth of Virginia. Before then, he was a well- known businessman. This is his first elected office. You partnered with him. Still partners?

MORINO: Friends. I can't say partner.

NNAMDI: Not business partners.

MORINO: We were never business partners. Mark and I first met in 1992, actually over a program for children, Medical Care for Children's Partnership in Virginia, which is one of the really great, innovative programs that provides insurance for children of the working poor, and that actually led to one of the Virginia health care programs in the State, from that effort. Mark and I became closer friends over the years. Mark was very instrumental in the funding of Venture Philanthropy Partners, and previous to that we had worked together on some economic issues, and I mean, since he's been Governor, of course, we stay in touch, but I wouldn't put it in the partner category. I have a lot of respect for Mark and what he's doing and what he's facing today.

NNAMDI: Mario Morino is chairman of Venture Philanthropy Partners. He's a former software entrepreneur, chairman of the Morino Institute, and a special partner to the private equity investment fund, General Atlantic Partners. Thank you for joining us. This has been Public Interest. I'm Kojo Nnamdi.