FW: The Onion: John D. And Catherine T. MacArthur Foundation Goes On Wild Endowment Binge

 

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From: Wacker, Craig
Sent: Monday, January 07, 2008 11:59 AM
To: HCD Program Officers
Subject: The Onion: John D. And Catherine T. MacArthur Foundation Goes On Wild Endowment Binge

John D. And Catherine T. MacArthur Foundation Goes On Wild Endowment Binge

May 15, 2002 | Issue 38•18

CHICAGO—The John D. and Catherine T. MacArthur Foundation went on a wild endowment binge last weekend, recklessly giving away more than $170 million in grants and fellowships in a 48-hour span.

Enlarge Image

Fanton and Hutton in the midst of their wild endowing spree.

"We got pretty out of control there with the endowing," said foundation president Jonathon Fanton, icing down his check-writing hand while recovering Monday. "It started Friday afternoon, when [Vice President and Chief Financial Officer] Lyn [Hutton] suggested we give a grant to the Foundation for Urban Renewal for their tireless efforts to rebuild America's struggling inner cities. Then, [Treasurer] Marc [Yanchura] said Save Our Cities was doing even better work, so we threw them on the pile, too. Things kind of snowballed from there, and by 4 a.m., we'd given $81 million in grants to 16 different groups. I think we even gave a few million to [rival philanthropic organization] Pew Charitable Trusts."

After a brief pause Saturday afternoon, the endowing resumed. The generous support of nonprofit activities in the arts and culture, education, the environment, health and human services, and public policy continued deep into the night.

"Saturday, around 3 p.m., we all went out for breakfast. Over eggs and Bloody Marys, we talked about the night before and how crazy we'd gotten," Fanton said. "But when the sun went down that night, we started right back up again with the endowing. Mostly to public radio networks under the General Program, but also 20 or 30 theater companies and a _____ of PBS fellowships. Half the people who've ever appeared on Sesame Street are MacArthur Fellows now."

While the bulk of the money went to groups falling under the foundation's Program on Human and Community Development, a considerable portion went to less noble causes, including the 3-2-1 Contact Preservation Society and the Recumbent Bicycling Hall Of Fame.

"At the time, it felt like the right thing to do," Fanton said of the binge. "It wasn't until we woke up Sunday morning that we were like, 'Holy ____... how much did we endow this weekend?'"

According to Vice-Chairman Elizabeth McCormack, the endowment binge is a result of the foundation's low self-esteem.

"It seems like the only time we feel good is when we're awarding endowments," McCormack said. "The pain and pressures of the outside world vanish, and it's as though you and the beneficiary are all that exist. That's a tough high to come down from. Deep down, we knew it was reckless, but we kept making rationalizations like, 'Well, the Program on Global Security and Sustainability is of heightened importance during this crossroads moment in world history.'"

McCormack's concern was echoed by experts in the field of grant-writing.

"When the stress of operating a charitable foundation gets to be too much, the urge to endow often takes control, overriding all logic and common sense," said Martin Wingreen, author of Giving Their All: The Secret Shame Of Compulsive Philanthropy. "Under the sway of such an intense sensation, the grant giver just can't resist funding every non-profit in sight."

Acknowledging that his group "has a problem," Fanton pledged that the foundation's Board of Directors would seek endowment counseling and join a philanthropy-addiction support group.

"After hearing about our endowment binge, the chair of the Andrew W. Mellon Foundation gave me a really encouraging phone call, saying they'd gone through the same thing in the '80s," Fanton said. "He said they eventually learned not just to think about world betterment, but also to take time for themselves, and that was their turning point. Now, they're a solvent and robust organization again. I really needed to hear that."

"As a charitable foundation, we can do a lot of good in the world," Fanton added. "We just need to make sure not to do too much good at once."

 

Program pairs experienced execs with start-up entrepreneurs

www.chicagotribune.com/technology/chi-mon_notebook_1217dec17,1,4245138.story

chicagotribune.com

INSIDE TECHNOLOGY

Program pairs experienced execs with start-up entrepreneurs

BY JON VAN

December 17, 2007

 

When approaching the Valley of Death, most entrepreneurs don't seek comfort from the Psalms. They prefer cash.

The valley is what start-up companies call the period when their original "angel" investor cash begins to run out, but the young firms haven't matured to the point where venture capitalists or others are prepared to invest.

"Almost any young entrepreneur you ask will have the same answer to the question of what they need to succeed," said Tom Churchwell, managing director of the Chicago-based ARCH Development Partners venture fund. "They say it's money."

That's inexperience talking, he said. While money is essential to fueling a start-up, sound management, good planning and smart execution of a strong business plan not only will put a young firm on the path to success but also will attract funding from savvy investors.

To impart these lessons, several experienced chief executives have joined together to offer a mentoring program for Chicago-area firms. After a competition among several young firms, three have been selected to receive intense mentoring for the next six months.

The firms are RevStor LLC, a Schaumburg-based data storage firm; ParkWhiz LLC, a Chicago-based firm that uses the Internet to match people wanting to rent out parking spaces with motorists needing a place to park; and PrepMe Inc., a Chicago firm that helps people prepare to take standardized tests.

"We see this as a pilot program," said Churchwell, president-elect of TiE Midwest, the group sponsoring the project. "After six months, we'll see how well this scales up."

The effort is tailored after experiences of Silicon Valley entrepreneurs who take their firms to success, make bundles of money and jump back into the fray either by starting other firms or investing with young innovators while acting as mentors, said Churchwell.

"Serial entrepreneurs know pitfalls they can help younger guys avoid," he said. "They also recognize and avoid blind alleys."

Knowing how the game is played can be more helpful than being handed a bag of money, Churchwell said. To pave the way for future investment once initial funding runs low, an experienced entrepreneur plans ahead.

"You contact potential investors way before you're ready to ask for money," he said. "You explain your business plan and tell them the milestones you intend to hit over the next six months. When you go back, if you can say you hit those milestones, plus some other accomplishments, an investor appreciates that. You'll get serious consideration."

Even though most entrepreneurs are in love with the bright idea that causes them to start a new company and the technology behind it, Churchwell said, investors aren't impressed. Instead of listening to descriptions of slick technology and rosy sales projections, they look for solid management with a proven success record.

"When you put up your money, it's always about the management team," Churchwell said.



jvan@tribune.com

Copyright © 2007, Chicago Tribune

Brickhouse: Yahoo's Innovation Incubator

anyone had any interaction with this?

 

 Brickhouse: Yahoo's Innovation Incubator
By Reena Jana

November 20, 2007 9:42AM

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How does Yahoo's Brickhouse model work? Any of Yahoo's 13,000 employees can submit proposals for possible new products. Up to 200 ideas are submitted each month. With boosts from Brickhouse, the pace of innovation at Yahoo may be accelerating -- but will it be fast enough to catch Valley rival Google?  

Within Silicon Valley, Yahoo has a reputation for being bureaucratic and slow to innovate, especially in contrast to rival Google. To infuse itself with startup energy, Yahoo began an offsite incubator late last year called Brickhouse.

Its job is to shorten the time it takes to bring new ideas to market. "The goal is to take the idea, develop it, and make sure it's seen by senior management quickly," says Salim Ismail, whose business card reads, simply, "Head of Brickhouse." "We need to iterate, see customer reactions, and launch fast," he says.

In the rapidly moving world of search, that's the way to go. Various Yahoo researchers voiced similar ideas for a fast-paced product-development incubator over the years, but it took an outsider's initiative to make it real. Caterina Fake, co-founder of Flickr, the photo-sharing site acquired by Yahoo in 2005, is credited with doing so. She wanted to keep Flickr's startup culture alive inside the bigger, slower parent company. Now it's up to Yahoo to make that culture its own.

Brickhouse is located in the South of Market district, where the hip digerati live and work in San Francisco, more than 40 miles from Yahoo's Sunnyvale (Calif.) campus. There are the cliched trappings of geeky culture: beanbag chairs, a foosball table, and Nerf darts. One wall has a huge sheet of paper covered with countless iterations of a lightbulb, the symbol of a great idea. Cheap shoji screens separate different areas of the large, loft-like office. "It's deliberately low-budget," says Ismail.

Brickhouse employees share space with other divisions of Yahoo, such as Yahoo! Video, which develops software applications for Web-based video, and Yhaus, which focuses on user-interface design. But the shop also opens its conference room to Bay Area entrepreneurs for large meetings. And Brickhouse holds "Wii Wednesdays" when friends of Yahoo workers gather to play video games. The idea is to build informal social contacts with other startups.

How does the Brickhouse model work? Any of Yahoo's 13,000 employees can submit proposals for possible new products. Up to 200 ideas are submitted each month. A council of five top company executives, including CEO Jerry Yang and his co-founder, David Filo, vets only the best five to 10. Before Brickhouse began, there were far fewer suggestions and they tended to be brief one-liners. Now, says Ismail, "employees post screenshots, create mock-ups, present cases, and describe potential hurdles."

In February, Brickhouse unveiled its first product, Pipes, a free software tool that lets users gather and mix RSS feeds from many Web sites. Pipes received critical raves by bloggers for its ease of use. The site was so busy its first day that it crashed. But how Yahoo will monetize the venture is unclear.

Next up is Fire Eagle, set for this fall. It's a Web-based software platform that, for example, lets people meet up with co-workers and friends more easily by broadcasting their whereabouts, often tracked by GPS, in online posts or cell-phone text messages. Fire Eagle took only three months to develop -- about 65% less time than the fastest development of typical Yahoo products. With boosts from Brickhouse, the pace of innovation at Yahoo may be accelerating -- but will it be fast enough to catch Valley rival Google?

Meeting Miser

http://www.payscale.com/meeting-miser