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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.
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