Some Thoughts About the Buffett-Gates Foundation Philanthropic Action

Since Warren Buffett announced plans to give a large portion of his wealth to the Bill & Melinda Gates Foundation, countless analysis and commentaries, both favorable and unfavorable, have been offered. The wide range of comments, criticisms, and postulations clearly illustrates that “beauty is in the eye of the beholder.” To me, however, it is a much less complicated deed than most have suggested.

New Content for VPP Website; New Look for VPPNews

In VPP’s ongoing efforts to share what we’re learning, we have added content throughout the VPP website, including a new Impact section that provides detailed information on the progress and accomplishments of the 12 organizations in the VPP portfolio. Within the section, you’ll learn how VPP works with these organizations to assess performance and track the progress of each individual nonprofit investment partner, how the VPP portfolio is increasing in organizational effectiveness, and how VPP defines key areas of organizational development.

Some Thoughts About the Buffett-Gates Foundation Philanthropic Action

Since Warren Buffett announced plans to give a large portion of his wealth to the Bill & Melinda Gates Foundation, countless analysis and commentaries, both favorable and unfavorable, have been offered. The wide range of comments, criticisms, and postulations clearly illustrates that “beauty is in the eye of the beholder.” To me, however, it is a much less complicated deed than most have suggested. Buffet’s action, at least on the surface, appears to be consistent with a man who has made well-grounded, common sense decisions in amassing his wealth over the years. Let me quickly qualify that the comments that follow are pure conjecture, as I’ve not met either person nor been privy to their views or thinking.

To me, the beauty and value lie in the clear focus and sheer simplicity of the action. And, Buffett has set a path for others to consider, regardless of the size of the donation. Here are the inferences I draw:

• He understood that enormous leverage would occur from pooling his resources with those of the Foundation, obviously financial but, especially, as a catalyst/influencer.

• He turned to someone he knows and respects (and I have to believe the value of the relationship was a large factor).

• He chose to benefit from an established organization, rather than build one himself, thus avoiding the dilution of resources for impact.

• He went with an organization that was developing a rigor and discipline in its grantmaking which resonated with his expectations for how an organization should manage its affairs, make decisions, and hold itself accountable.

• He chose to “give while still living,” no doubt against the urgings of his tax advisors.

• And, he wisely recognized that he may not have the patience or enduring interest for philanthropy and had the honesty to say so and then act.

Now the onus is on the Gates Foundation to build on what they’ve already done and to use the very large infusion of capital from Buffett wisely. Unfortunately, there are many who will be ready to pounce on every failure or misstep. Again, here are some observations from one who hopes they succeed:

• The Foundation has been roundly criticized for its highly controlled and centralized decision-making—as one said, “The three or four at the top make all the decisions.” Yet, I hope they don’t change this approach for their most strategic decisions and initiatives. Ceding the authority to make bold, audacious decisions means they run the risk of sub-optimizing their decisions, growing a bureaucratic process, and calcifying their effectiveness.

• The Foundation has not been afraid to take on some of the most intractable social issues, knowing that they will make mistakes yet willing to learn from them; I hope they do more to cultivate this culture. Their efforts in education have not been without difficulties, but they at least try to understand what went wrong and make adjustments. Further developing an innovative, learning culture within the Foundation may well be one of their largest challenges.

• I hope the Foundation will not rush to build up the organization in order to “move the money” required for annual distribution and instead stay focused on wise philanthropic investing. The reality is that the type of talent the Foundation needs to bring onboard is scarce and the price of getting the wrong talent is steep. The private sector world of investing has shown how difficult it is to scale a venture capital or private equity firm to go from investing $500 million to $1 billion annually (comparable to Buffett’s gift which almost doubled the Foundation’s “philanthropic investment capital”). Staying with large investments of capital into several, very important initiatives is one way to help smooth this difficult transition.

• Finally, and perhaps most important, the Foundation cannot become an excuse for governments to not do what they need to do in serving society’s needs. It must leverage its brand and assets to move governments to do their part in providing the public funding and resources many of society’s social problems require. It is absolutely vital that the Foundation—especially with its larger capital base, thanks to Buffett—not be viewed as a replacement or substitute for public dollars and resources. As Philanthropy Roundtable CEO Adam Meyerson said, “Even with the Buffett gift, the Gates Foundation will still account for only 1 percent of American charitable giving.” Gates can and must be a great catalyst, both in the US and globally, to help ensure public and private funding play critical roles.

My hat is off to Warren Buffett. His action, something no tax advisor would ever recommend, illustrates he felt it was the right thing to do, irrespective of the financial consequences. His approach to philanthropy also seems consistent with how he lives his life—investing wisely in others without the need for personal acclaim.

Similarly, I applaud the Gates Foundation’s decision to accept the formidable challenge Buffett’s action has presented. A lesson I hold close, based on my own experience, is “Leadership is everything” and the Gates Foundation can and should be a premier example. Since 1997, the Foundation, under the guidance of Patty Stonesifer and William Gates, Sr., has used “passion with pragmatism” to respond to some of society’s most daunting challenges. Now, with Bill and Melinda Gates focusing their full-time attention on the Foundation’s work, I am even more optimistic that this team of leaders can indeed make the important and strategic decisions that will lead to long-term systemic change.

- Mario Morino

New Content for VPP Website; New Look for VPPNews

In VPP’s ongoing efforts to share what we’re learning, we have added content throughout the VPP website, including:

• A new Impact section that provides detailed information on the progress and accomplishments of the 12 organizations in the VPP portfolio. Within the section, you’ll learn how VPP works with these organizations to assess performance and track the progress of each individual nonprofit investment partner, how the VPP portfolio is increasing in organizational effectiveness, and how VPP defines key areas of organizational development.

• A section for downloading our new core collateral documents including PDF versions of two reports, VPP: A Summary of Our First Five Years and VPP Portfolio Performance and Accomplishments.

• Packets of information on each of the 12 investment partners, which provide a concise overview and key information and accomplishments.

• A reorganized and expanded Investor section that highlights the philanthropic efforts of VPP’s Founding Investors.
• An improved News section that now includes all VPP announcements and press, along with easy access to our materials for press.

“We now have a portfolio of 12 organizations and, while half are still in the mid- to early stage of the partnership, we are beginning to be able to report more comprehensively on their progress,” said Managing Partner Carol Thompson Cole.

You’ll also notice a slightly different look for VPPNews beginning with this issue. Giving our readers a quick way to see what’s in each issue and a quick way to access stories were primary goals.

These updates to the website and the newsletter represent the first phase of our plans to make information on VPP and our investment partners available for broader dissemination.

Feedback on either the website or VPPNews? Write to editor@vppartners.org. We’d welcome hearing from you.

- The VPP Communications Team

VPP Chairman Mario Morino Receives the 2006 Theodor Herzl Award

In July, Mario Morino received the Theodor Herzl Award, which honors politicians, business leaders, and journalists who have demonstrated willpower and determination in achieving ambitious goals and making the world a better place. Former Attorney General John Ashcroft and Governor Tommy Thompson were honored with the Friend of Zion Award, which recognizes leaders who have played a key role in promoting a close alliance between the United States and Israel. They were joined by six business and academic leaders who received the Albert Einstein Award, which recognizes path-breaking leaders whose vision and commitment have contributed to the critical advancement of vital life-saving and life-enhancing technology to the benefit of mankind. The awards, presented by Former Prime Minister Benjamin Netanyahu, were part of a five-day Mission of Peace/Life Sciences Mission to Israel. The private ceremony in Jerusalem was keynoted by former Prime Minister Shimon Peres.

The mission was organized by Global Capital Associates and sponsored by Greenberg Traurig, LLP. Proceeds from the event benefit Words Can Heal, a national campaign to eliminate verbal violence and promote the healing power of words to enhance relationships at every level. Words Can Heal is led by its founder Rabbi Irwin Katsof. Mario first learned about the organization and Rabbi Katsof’s work from Len Leader, one of the senior executives who helped build America Online and a VPP Founding Investor.

Mario received the award for the combined impact of his business career and his contributions to philanthropy. In Rabbi Katsof’s words, “Mario’s life exemplifies our belief that business success alone does not define a great man. In addition to his success in business, Mario’s work with Venture Philanthropy Partners has made a real difference in improving the lives of people who have not had the same opportunities he’s had. Most importantly, his groundbreaking work with VPP is changing the leverage equation for philanthropic dollars, which will impact the larger world of philanthropy for years to come.”

The nine award winners recognized in this mission join an impressive list of past recipients including: Len Leader (1999); Jack London, Chairman, CACI International Inc (2004); Howard Schultz, Founder, Starbucks Coffee Company (1998); John Kluge, Chairman & President, Metromedia Company (2002); Sanford Weill, Chairman & Co-CEO, Citigroup Inc. (1997); Jocelyn Elders (2005), Former US Surgeon General; Jeanne J. Kirkpatrick, Former Ambassador to the United Nations (1996); and Margaret Thatcher, Former Prime Minister of Great Britain (1998).

Expansion

LAYC Opens New Facility in Prince George's County
Thanks to Jim Whitney, Director of Communications, for this update.

LAYC's Maryland Multicultural Youth Centers (MMYC) continued to expand its footprint in Prince George's County this summer, launching the Center for Educational Partnership, in partnership with the University of Maryland.

The new facility in Riverdale was officially launched with a July ribbon-cutting, where University of Maryland President C. D. Mote, Jr., LAYC Executive Director Lori Kaplan, and Maryland State Senator Paul Pinsky, who was instrumental in securing bond funding to renovate the former elementary school, outlined the plans for the new center to a gathering of community leaders, elected officials, and young people. Several youth who participated in a summer camp at the new facility planted two apple trees in front of the Center to mark the beginning of a growing, lasting partnership with the community.

Most recently used as a university warehouse, the Center for Educational Partnership has been renovated to serve as a community-based portal through which residents in the northern part of Prince George's County can access community resources and programs and tap into the expertise available through the University of Maryland.

Kaplan said, "This partnership among the University of Maryland, the MMYC, elected leaders, and the community is a wonderful, powerful model for providing vital community services to youth and their families. We each bring something distinct and valuable to the Center, and the result is a new resource for the community that will help young people learn, grow, build confidence, overcome challenges, and become successful young adults."

A summer camp, which focused on mural painting, gardening, and food preparation, was offered at the new facility to students attending William Wirt Middle School, just adjacent to the Center. This fall, youth and families will be able to take advantage of programs that will include job training and placement; computer training; case management and counseling; GED instruction; arts activities; after-school programs for youth; summer educational camps; life skills training; gang prevention; early-intervention activities; and recreational programs.

Board Changes

CMHS Adds Three New Members to its Board of Directors
Thanks to Dennis Hunt, Executive Director, for this update.

The Center for Multicultural Human Services elected Dordaneh (Dory) Halati, Anne Heald, and Beverly Hodges Little to its Board.

Dory Halati, MBA, is a Vice President in the Commercial Real Estate Group of Chevy Chase Bank. Halati brings 20 years of financial and relationship management and marketing experience to CMHS’s Board. An Iranian immigrant, fluent in Farsi, and proficient in Italian, she has a passion for issues affecting immigrant women and children and significant experience in organizing, implementing, and marketing outreach and fundraising events in the US and abroad. She serves on the Montgomery County Commission for Women’s Subcommittee on Immigrant Women and also holds a Master’s degree in Counseling Psychology.

Anne Heald holds a Master’s degree in City and Regional Planning from Harvard University and is the former Director of New Ventures in Philanthropy, Forum of Regional Association of Grantmakers, Washington, DC. With a lifelong passion for refugee and immigrant issues, Heald has served in a number of positions involving strategic program initiatives in youth development and education and emerging trends in philanthropy. She was Executive Director of the Center for Learning and Competitiveness, Graduate School of Public Affairs, University of Maryland; a Program Officer of the German Marshall Fund of the US; President of the Convenience Store Foundation for Education and Research; and Program Director of the Indochina Refugee Action Center.

Beverly Hodges Little, winner of the 2004 National Women of Color Technology Award in Product Development and Management, served until recently as Director, Product Development/Management at Sprint Nextel Communications. She brings to the CMHS Board expertise in strategic marketing, financial management, and operations honed over a 16-year career in the telecommunications arena. Hodges Little holds an MBA with a concentration in Marketing from Old Dominion University, Strategic Leadership Certification from the Georgetown University Executive Program, Leadership Challenge Certification from the Wharton Executive Education Program, and Leading Creatively Certification from the Center for Creative Leadership. She has been a member of the Nextel Inclusion Advisory Council since 2003.

Management Changes

See Forever Foundation Fills Two Critical Leadership Positions
Thanks to Cynthia Robbins, Executive Director, for this update.

In July, Carrie Miller joined the See Forever Foundation as Director of Academics, Principal Support, and Accountability. Miller brings experience in school leadership, including seven years as a school principal, eight years as an assistant principal, and 15 years as a teacher. Most recently, she worked as a Principal Mentor for Montgomery County Public Schools. She also has provided consulting services to the Fund for Educational Excellence and the National Association of Secondary School Principals. At See Forever/MAPCS, her primary responsibilities including training, supporting, and supervising school leaders, while ensuring system-wide accountability. This new leadership position will bring instructional expertise into SFF’s central office.

Additionally, Sunny Lee will become Development Director in early September. She recently served as the Development Director for Teach for America, DC and has an understanding of the education sector and the DC funding community. Her other experience includes development work at the University of California, Berkeley and Junior Achievement.

Programs & Services

AALEAD Holds 8th Summer Talent Show
Thanks to Rosetta Lai, Vice President for Development and External Affairs, for this update.

The culmination of all AALEAD’s summer programs was the Summer Talent Show held for the first time at the Sacred Heart School Auditorium on August 4, 2006. The program, “A Celebration of Cultures,” showcased music, songs, and dances. For the first time, under the direction of Young Playwrights, students also wrote and performed their own plays. About 100 parents and guests attended the performances with a cast of 120 children.

CFNC Teams with Comcast for July Film Fest
Thanks to Kate Lyng, Manager of Development, for this update.

The Child and Family Network Centers (CFNC) partnered with Comcast and the City of Alexandria to present the Third Annual Comcast Outdoor Film Festival at Brenman Park on July 28, 29, and 30. About 250 children and their families braved the heat each night to enjoy popcorn and other treats as they watched new family classics under the stars. Harry Potter and the Goblet of Fire, Madagascar, and Cheaper by the Dozen 2 entertained a crowd of young and old while area restaurants including Generous George’s, Cameron Perks Coffeehouse, Quizno’s, and Ben & Jerry’s provided food and drinks for the event.

CFNC is gearing up for the September 5 start of its school year and will be serving more than 200 children and their families.

Mary's Center Partners with DCPS on Immunization
Thanks to Vanessa DeCarbo, Director of Advocacy and Communications, for this update.

Mary’s Center is working with the District of Columbia Public Schools (DCPS) to meet the immediate needs of the 2,500 DCPS students who are currently out of compliance with the Immunization of School Student Act of Immunization Records. DCPS recently announced that 94.9% of students are currently up-to-date and immunized in the District, leaving approximately 5% of students out of compliance.

“Mary’s Center is committed to working with the DC public schools to provide all families access to free immunizations,” said Alvaro Simmons, Chief Operating Officer for Mary’s Center for Maternal and Child Care. “Many families in the District remain underserved and it is our responsibility to provide quality care. Our goal is to assist families in establishing medical homes, supporting them with consistent quality health care, educational, and social services to foster stability and strength in our community.”

The Center is focused on the back to school buzz, preparing children and families for a healthy school year. Due to organizational expansion and increased outreach efforts, Mary’s Center is experiencing a 65% plus increase in children examined for back-to-school physicals in 2006 and a 66% increase in immunizations administered, compared to 2005. Mary’s Center patients are taking earlier action with accurate information to ensure the health of their children for the upcoming year. With the DCPS collaboration will also come proactive planning for 2008 and beyond to increase immunization compliance in the District and the building of medical homes for families to receive culturally sensitive quality care.

SEED Holds Alumni Workshop
Thanks to Elizabeth Frazier, Director of Communications, for this update.

As part of its mission to ensure that alumni stay on track to graduate from college, SEED hosted its first annual Alumni Summer Institute, entitled “Still on the Journey: Planning Your Financial and Professional Future.” Throughout the weekend, members of the classes of 2004, 2005, and 2006 engaged in professional, personal, and financial development sessions which included: Lessons Learned: Life After SEED; Getting Financially Fit for the Future; Creating a Financial Action Plan; Networking with Career Professionals; Indicators for Future Success: Goal Setting; and the Resume & Interview Clinic. Through lectures, interactive exercises, and individual counseling sessions, experts from various fields worked with alumni to identify proactive steps that alumni can take to shape their future. Many SEED staff participated in the weekend’s activities, and alumni voiced their appreciation at the opportunity to engage with other graduates on critical life skills lessons.

Awards & Recognition

Heads Up Presents Hero Awards
Thanks to Sara Brandspigel, Development Manager, for this update.

On July 29, Heads Up honored five extraordinary people who have played a vital role in the organization’s history. These “Heads Up Heroes” represent the elements that make the program successful – students, parents, tutors, principals, and college partners.

Executive Director Darin McKeever presented the awards at the 2006 Heads Up project fair and 10th anniversary celebration.

Former Heads Up student William Boney was acknowledged as an example of what all Heads Up students can achieve. He has attended Heads Up programs since third grade – first as a student and later as a tutor. Today, he is an honor roll student entering the 12th grade and planning to start college next fall. When asked what Heads Up means to him, William responded, “Heads Up is a safe place through life’s storms.”

Nicole Bryan’s experience as a Heads Up tutor inspired her to pursue a career in teaching. Nine years ago, she was a member of the first corps of summer tutors. Now Nicole teaches at Marie Reed Community Learning Center, a Heads Up partner schools. “Through Heads Up I learned to believe in myself and the potential impact that I could make on student’s lives as a teacher,” she said.

The other Heads Up heroes were Verter Smith, a parent partner and role model at Bowen elementary school; Dan Porterfield, a Vice President with Georgetown University; and Yvonne Morse, the first principal to partner with Heads Up 10 years ago. Morse continues to champion children as a staff liaison between Heads Up and its partner schools.