Charter School Brief
As a result of our ongoing efforts to examine different educational models, we have prepared a brief on charter schools, which provides an overview of the current status of charter schools in the District of Columbia.

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Chairman’s Corner: Hard Times Provide New Opportunity for Nonprofits
Last month, 18 experts in the fields of federal, state, and municipal financing; regional and national foundation funding; charitable giving; high-net-worth donors; and public policy gathered for a day-long workshop hosted by Venture Philanthropy Partners and facilitated by McKinsey & Company. The purpose of the workshop was to understand what the leaders and supporters of community-based nonprofits might do to help their organizations survive and respond to the increased demand for their services in the face of an extremely challenging funding environment.

The discussion was sobering and confirmed how radically the playing field has changed between the time VPP was created in 1999-2000 and today. Participants noted that the stresses on low-income and working poor families and the nonprofit organizations that support them are deep and serious. The funding crisis is real and getting worse.

Yet, amid the participants’ gloomy confirmation of the harsh climate for low-income and working poor families and the deepening of the funding crisis, participants also discussed some proposed responses and strategies. After reflecting upon the issues and strategies raised during the day, we at VPP see some opportunities for the field to capitalize on these points of disruption and discontinuity so as to advance positive change for organizations and communities overall. Some of these opportunities are summarized below. The complete report will be available on VPP’s website the week of July 14, 2003.

Advocacy
Community-based organizations and their stakeholders certainly can and do have a role to play in improving the lives of children and families. However, the participants overwhelmingly agreed that without mobilization within the public sector, we ’re just “tinkering at the edges.” Getting to the root of the problem—the declining financial health of low-income and working poor families—requires far more dollars and commitment from the public sector. The group voiced strong support for improving and increasing advocacy on behalf of all children, especially children of low-income families. Although the impediments to progress here are formidable, efforts must be made to drive change and unlock public funding. In a sense, we need to advocate in support of advocacy.

Participants explored a number of ideas on advocacy, including:

• Persuade funders to support advocacy initiatives, be more present in the public policy arena themselves, and encourage nonprofits, their leaders, boards, and constituencies to be more directly engaged.
• Develop thoughtful communications with sharpened messages around the needs of all children, including children of low-income families, to shape public opinion and better inform legislators.
• Create initiatives to improve research that clearly identifies needs and demonstrates program results. And, more important, disseminate this research to the relevant audiences.
• Make linkages among research organizations, advocacy efforts, and the people “on the ground” who are most affected by public policy and funding.

Collaboration and Consolidation
Today’s funding crisis could be the trigger that drives systemic change in the nonprofit sector. One of the more aggressive responses to this funding crisis is to strengthen the service delivery system for children through the consolidation of, and collaboration among, public agencies and nonprofits. Many states are looking at how they can promote systems integration, consider the consolidation of departments, and explore the blending of funding streams. This approach should be pushed further, beyond just internal public department consolidation. For example, there are opportunities for government agencies to outsource more service delivery to qualified nonprofit providers or provider coalitions with demonstrated performance and the potential to provide the same or better services at lower cost. Furthermore, innovative strategic alliances could be formed that blend and integrate public, private, and nonprofit entities to provide more comprehensive services.

Addressing Geographic Imbalances
Today in the National Capital Region there is an imbalance between the needs in particular areas of the region and the social, health and human, and educational services available. Public and private funders need to be more aware of demographic changes in the region and gaps in services. Strategies to achieve this awareness include:

• Through research, examine the existing services in light of the region’s changing demographics.
• Help high-quality service providers expand their programs in other parts of the region and form strategic alliances with government agencies or emerging community-based organizations already present in underserved areas.

Talent Recruitment and Development
Both nonprofit organizations and grass-roots advocacy movements will need new leaders and programs that support the development and training of emerging leaders in their communities. Recruitment and retention tactics must be better developed at the community-based organization level, including incentives for working in the nonprofit sector. Special attention should be placed on the creation of a second line of management within community-based organizations, one that includes chief operating officers, chief financial officers, and fund development directors. Without building senior management breadth and depth, these organizations will continue to lack the ability to grow to scale.

While these opportunities and strategies may be a good start, the challenges we’re facing are difficult and complex and require a more comprehensive response. We must not lose sight of the fact that, in the here and now, many high-quality nonprofits need our support simply to survive, let alone respond to the increased demand for their services. Yet this difficult funding environment is creating a disruption upon which broader, system-wide change may emerge. While we continue to support those in the trenches, let’s also ask the larger questions of ourselves and of the field and be open and prepared to capitalize on the unanticipated opportunities that may emerge.

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In preparation for the next school term, See Forever has initiated a partnership with Urban Alliance, a local nonprofit that provides internship-based learning programs for Washington, DC teens. Job readiness is an important cornerstone of the educational program at Maya Angelou Public Charter School. Students currently get work experience at a catering business and a technology center owned by the school. This fall seniors will gain additional experience through the partnership with Urban Alliance, which will place Maya Angelou students in internships with local businesses and nonprofit organizations. Those students will receive at least 70 hours of instruction per year on how to improve their oral and written communication skills. They will focus on college essay writing, business writing, oral presentation skills, and professional conduct. Students will also be introduced to the concept of financial literacy and taught the importance of building assets for the future.

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In today’s economy, Rick’s situation is enviable. He owned about 40 percent of OTG when Legato Systems bought the company last year for $403 million. He has had the luxury of experiencing some of the surprises and complexities of life with young children—his are ages 9, 7, and 3 (twins!). He recently began setting up a new business, Strategic Management Consultants, LLC, where he will provide business consulting services. He says he is particularly interested in helping people who are developing new businesses. There’s a good deal they can learn from his success as well as his mistakes, he says.

Last month, in jeans and a sweatshirt, Rick organized books and pictures in his new White Flint office and looked back on his last ten years. He readily admits that he has just been in the right place at the right time. He has acted more on his gut than on any formal training. “No one ever thought this kid was going anywhere,” says Rick. He was born in Washington, DC, and raised in Montgomery County, Maryland. After graduating from the University of Maryland, he went to work at his father’s printing company and then at a telephone service reseller. A friend introduced him to the software business in 1992. They realized that increasing reliance on computers and the explosion of data on the Internet meant that people needed a way to store and access a great deal of information offline. Their new company landed an early contract with GTE and Microsoft to develop a Windows storage product. OTG was able to adapt the software to work with hardware from leading manufacturers like IBM and HP. “The market requirements assisted in our growth,” Rick said. “It was a combination of luck, timing, a little bit of money, and great people.”

The business grew to 450 employees with 12,000 customers, including more than 1,000 credit unions and over 500 hospitals. The company went public in 2000 on the day that the NASDAQ reached an all-time high. “For six months we were floating,” Rick says with a chuckle. Their IPO that day, and subsequent offerings, raised $100 million in capital, enabling OTG to make three acquisitions. Then, in 2002, Legato, an international data storage company, stepped in to acquire OTG. Rick joined Legato’s board and provided strategic direction to help the organization through a transition period.

Now he’s on to other things, including nurturing his interest in nonprofit organizations. He credits his involvement with VPP for what he has learned about nonprofits to date. He is intrigued by the “hands on” approach to helping organizations build capacity. And “if Jack Davies has anything to do about it, I’ll end up on a board soon,” he says of Davies, one of his most enthusiastic investment partners in both VPP and Washington sports. Rick and his wife, Rebecca, are also focusing more attention on their family foundation, which funds youth literacy and programs that help children with learning disabilities.

Rick also has more time to focus on his investment in the Washington Capitals and the Washington Wizards (Lincoln Holdings). Raul Fernandez, the colleague who introduced Rick to VPP, also convinced him to buy into the sports partnership. “He told me it would be an opportunity to be in a special sports ownership club and that the Lincoln Partners were all passionate, competitive, and fun. He was right. Ted [Leonsis] is the best partner you could have. He created a real belief that we each have value to offer and he respects each of our investments.”

Rick looks around at the vintage photographs and posters he’s begun to hang in his new office and shakes his head slowly, still surprised by his own story. “I remember every day how fortunate I am.”

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Both Carol and Steve bring demonstrated leadership and excellent reputations within the region, along with experience, knowledge, and contacts. These assets will help VPP better support the high-quality nonprofits we serve and more effectively scale and grow our own organization. Although they will maintain their own firms—Carol as President of The Curtex Group and Steve as Founder and CEO of Humanitas Consulting, LLC—they will spend most of their time on VPP's work.

Carol, a former District of Columbia city administrator, will lead the efforts to expand VPP's scope and impact. She will advise and assist in VPP's involvement in public policy and funding, and will help in overall board and investor relations. She will also assist the VPP investment team in supporting our investment partners.

Steve, who served as deputy superintendent for Montgomery County Schools and chief of staff for public schools in the District, will advise and assist the VPP investment team in managing the portfolio and supporting our investment partners. He will work directly with these nonprofit leaders to help them strengthen their organizations so as to increase their positive impact on the lives of the children in their communities.

We are excited about having Carol and Steve on our team, and we are looking forward to capitalizing on their expertise, accomplishments, and great reputations in the region and in their fields.

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In late June, Senators Barbara Mikulski (D-MD) and Kit Bond (R-MO) called for $200,000 in emergency funding to stabilize the 2004 AmeriCorps membership level at 50,000. Two hundred corporate and nonprofit leaders, including VPP chairman Mario Morino and board member Bill Shore, signed an ad in The New York Times asking President Bush and Congress to approve the emergency funding legislation. For more information, please visit the AmeriCorps website.

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Brookings, Community Foundation Study Region’s Immigrants
The Washington region now ranks seventh among US metropolitan areas in the size of its immigrant population, with one in six residents born in a foreign country, says a new report from the Brookings Greater Washington Research Program. The area’s immigrant population grew 50 percent during the 1990s. Thirty-six percent of immigrants are from Asia and the Middle East, compared with 26 percent nationally; 39 percent are from Latin America and the Caribbean, below the national average of 52 percent. Immigrants are drawn to this region’s international institutions, embassies, high-tech industry, and universities. While the study found that a majority of newly arrived adults speak English, many other adults and children need greater access to ESL (English as a second language) classes.

“This survey affirms the fact that diversity in the Greater Washington region today cannot be seen in just black and white terms. Today, we are a region where residents come from almost every country in the world,” said Terri Freeman, president of The Community Foundation and a VPP board member. “These factors make the Greater Washington region a special place with special challenges.” The Community Foundation supported the research project through the Washington Area Partnership for Immigrants. This funding collaborative has granted more than $1.2 million over the past four years to immigrant-serving organizations throughout the Washington metropolitan area. More information on the study is available through the Brookings website.

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Kids Count Report Looks at Family Poverty
This year, the Annie E. Casey Foundation’s 2003 Kids Count Data Book looks at “The High Cost of Being Poor,” and finds that while many families have left state welfare rolls and are working, they are doing so at great expense. The report’s essay provides sobering examples of the overwhelming costs that the working poor bear to get to work, to buy food, and to find housing. These obstacles are a result of scant resources such as grocery stores and banks in poor neighborhoods, as well as extra fees charged to low-wage earners. Such impediments make it hard for working families to save money and build assets for their future. Explore the wealth of information on the state of America’s children in the 2003 Kids Count Data Book.

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