Ready, Fire, Aim! - Mihail's Public Blog

Martha Stewart takes her case to the people via a new website, MarthaTalks.com according to this New York Times story (registration required):

"After more than a year, the government has decided to bring charges against me for matters that are personal and entirely unrelated to the business of Martha Stewart Living Omnimedia," Ms. Stewart wrote in an open letter posted on a Web site that began operating early yesterday. "I want you to know that I am innocent — and that I will fight to clear my name."

...A statement from her lawyers that was issued after the indictment on Wednesday is posted on the site, and visitors can send her e-mail. In its first 16 hours or so, the Web site received more than a million hits and about 12,000 e-mail messages, the spokesman said, including one from a federal agent who wrote encouraging Ms. Stewart not to settle.

Scott Knowles has an interesting blog called WebSense on Marketing, Advertising, Media and Business -- Reshaped. He's got a blogroll going on all the bloggers who're currently attending the Jupiter conference and covering it in their blogs.

Met Marc Canter at the conference...wasn't able to make it back for his talk which is outlined nicely by Jay of iCite.

This is the best of my other blog Net Present Value that I started when BN was still in beta....on September 11, 2002

Why this name

I just read a great article on nonprofits and the need for them to give away their money faster, even at the expense of shutting themselves down once the money runs out. The two name contenders that were inspired by this article were:

5 Percent - This comes from the minimum foundations are required to give away each year; most of these foundations are set up to exist in perpetuity since their founders want immortality.

Net Present Value - The term used to ascribe the value of all future giving, with the farther out the giving, the lower its current value. Thus a $100M foundation that gives away only the minimum 5% of its assets each year is in fact worth only $50M.

Enjoy Net Present Value!

From Wednesday, September 11, 2002

A great article by David Bank from the Wall Street Journal (subscription required) yesterday that really encapsulates many of my own thoughts on foundations and giving and the dire need for funds now. This article is one of the reasons I started this separate blog and talks about the new trend among donors:

...Applying business practices to their giving, they are analyzing the "time value" of their money and concluding that a dollar spent now can be worth more than one, or even two, spent later. They argue there is plenty of money on hand to accelerate spending on today's critical problems. They also say that despite the recent downturn in the stock market, long-term economic growth will generate plenty more to deal with tomorrow's issues.

One such donor is Charles F. Feeney, the reclusive millionaire who co-founded the Duty Free Shoppers Group Ltd. chain of airport stores. Earlier this year, Mr. Feeney pushed his foundation, the Atlantic Philanthropies, to adopt a plan to exhaust its $4 billion endowment over 15 years or so. Now 70 years old, Mr. Feeney told his board that the prospect of going out of business would focus the foundation on bold problem-solving rather than self-perpetuation.

...Atlantic is among a small group of charities that are bucking the prevailing approach of established foundations, which have traditionally sought to sustain their endowments and their grant-making forever. A federal tax-code change in 1981 relieved foundations of the obligation to distribute at least as much as they earned on their assets each year. Since then, overall foundation "payout" rates have drifted down to near the legal minimum of 5% of assets.

In the same period, according to the Foundation Center in New York, foundation assets have greatly increased, from $47.6 billion in 1981 to $486.1 billion in 2000, the most recent year for which full information is available. Last year, foundations paid out about $29 billion in grants.

...Weighing social and financial returns, Mr. Jansen [Director of McKinsey's Institute on the Nonprofit Sector] says, forces foundations to confront a provocative question: "Would we all have been better off if you had given that money out last year and had it deliver benefits, than we are now, with your having lost 15% to 30% of it in the stock-market decline?"

In making his calculations, Mr. Jansen used a standard business analysis of the time value of money. Just as financial returns need to be more heavily discounted the further in the future they are likely to occur, so must social returns that are delayed by conservative spending policies. Factoring in a typical discount rate, Mr. Jansen found that a $100 million endowment of a foundation that paid out only 5%, or $5 million, a year in grants really had a "net present value" of just $50 million or so.

From Saturday, September 21, 2002

The New York Times story on the other fallout from corporate scandals:

Amid the myriad scandals sweeping corporate America, the fact that at least one chief executive took credit for a company's beneficence — and that others blur the line — may seem minor. But why shouldn't investors know where their money goes? And shouldn't the company, not the executive, get the glory, the good will and the power that a contribution brings?

Not only is corporate philanthropy coming out of the pockets of shareholders, it is also coming from taxpayers. The AAFRC Trust for Philanthropy in Indianapolis, which promotes ethics in fund-raising, estimates that corporations spent $9.05 billion, or 1.3 percent of pretax profits, on philanthropy last year. It notes that many forms of corporate charity, like volunteer time and sponsorships, cannot be tracked.

...But the cult of the C.E.O. has blurred the distinction between the personal and the corporate — so much so that it is hard to separate, say, John T. Chambers from Cisco Systems, Steven P. Jobs from Apple Computer or John F. Welch Jr. from General Electric.

Charitable institutions are somewhat to blame for this phenomenon. Nominating committees at the most exclusive charities make no bones about what is expected in terms of fund-raising but are agnostic about where the money comes from, a policy called "give or get."

If you join the board of the Whitney Museum of American Art, for example — as [Tyco's] Mr. Kozlowski did despite little knowledge of art — you personally must make a $100,000 annual contribution and either give personally or raise $5 million in all. At the Lincoln Center, the minimum personal contribution is $250,000.

[According to Randall Bourscheidt, the president of the Alliance for the Arts in New York City,] "The nonprofit board frankly cannot afford to worry about the distinctions between corporate and individual contributions."...Or, as one of the most prominent fund-raisers in New York says, "Face it: money is fungible."

From Friday, October 04, 2002

Yesterday, I got to tour the underconstruction San Francisco Asian Art Museum. The private tour (which have been limited since the museum is trying to complete construction and get its occupancy permit from the city later this month, I think) was arranged by Holden Lee of the Trust for Public Land, who worked on the museum's Strategic Plan.

I didn't live in San Francisco when this building housed the San Francisco Public Library (now housed in a new, somewhat uninspiring building across the street) so I never saw the before. But the after is wonderful. What a great space. You walk up a grand staircase to arrive at the grandest space of the building with a spectacular ceiling. Gaye Aulenti of Paris' Musee d'Orsay fame has put in signature v-shape skylights (which is also reflected in the form of the low gallery ceilings) between the wings closing out what used to be open space.

The museum has raised $153M to get the building retrofitted (which includes a 16 foot deep air pocket or moat around the building, that ensures that during an earthquake the building won't bump against anything concrete). And the collection will cover all of Asia not just East Asia. I'm looking forward to the opening!

One of the trustees who went on the tour with us had this to say when I commented that it must be really useful to have a building to raise money around. She told us about an LA-based major donor's comment that he was giving because of the programs...that there are lots of beautiful museum buldings in LA but it is the programs that are important to him. That's very cool!

From Tuesday, October 15, 2002

New York Times story on Robert Smithson's ''Spiral Jetty'', which is overseen by the Dia Art Foundation*, one of the influential contemporary art institutions in the world.

Smithson, one of the most prominent spokespersons for "Earth art" which "brought 1960's Minimalism out of the art gallery and into the American West, literally, on a scale to match the landscape," died at the young age of 35 in a plane crash but his legacy lives on...although some of it is invisible at times:

The most famous work of American art that almost nobody has ever seen in the flesh is Robert Smithson's ''Spiral Jetty'': 6,650 tons of black basalt and earth in the shape of a gigantic coil, 1,500 feet long, projecting into the remote shallows of the Great Salt Lake in Utah, where the water is rose red from algae.

The sculpture became an icon immediately after Smithson finished it in 1970. He made a film about it, enhancing the myth: trucks and loaders moving rocks like dinosaurs lumbering across a prehistoric panorama; the modern artist as primordial designer.

Smithson anticipated that the lake would rise and fall, the residue of salt crystals causing the black rocks to glisten white whenever the water level dropped. But he miscalculated. ''Spiral Jetty'' was visible for about two years, then became submerged and stayed that way except for a few brief reappearances.

With the drought in the West, however, the water in the lake has dropped to its lowest level in many years, and so the jetty has emerged, a brackish Brigadoon.

*Background on the Dia Art Foundation:

Dia’s permanent holdings include pivotal artworks by major artists who came to prominence during the 1960s and 1970s, including Joseph Beuys, Walter De Maria, Dan Flavin, Donald Judd, and Andy Warhol. The art of this period represented a radical departure in practice—unlike any witnessed since the birth of modernism. Often large-scale, the work was also occasionally ephemeral or site-specific. The name “Dia,” taken from the Greek word meaning “through,” was chosen to suggest the institution’s role in enabling extraordinary artistic projects that might not otherwise be realized.

Heiner Friedrich and Philippa de Menil, who founded Dia in 1974, wished to extend the boundaries of the modern museum in order to respond to the specific requirements of a few of the most ambitious and promising artists of this generation. Today, Dia continues to commission, support, and present site-specific installations and long-term exhibitions of work by artists who first came to recognition during the 1960s and 1970s, as well as by younger artists whose work reflects the achievements of the older generation.

From Tuesday, October 15, 2002

An earlier New York Times article on the perennial issue of teacher shortage.

Education analysts often say the nation faces a looming teacher shortage. Growing enrollment and the retirement of baby-boom teachers will aggravate the need, as will a new federal law that bans unqualified teachers.

But this year in New York City, the shortage mostly disappeared, despite the difficult conditions in many urban schools. Qualified teachers flocked to New York for starting salaries of $39,000 a year, up from $32,000 in 2001. Those with experience elsewhere started as high as $61,000. Certified teachers left parochial schools, the suburbs and other professions to work for the city. A slow economy helped by offering college graduates fewer options in the private sector.

New York's experience suggests there never was a shortage, only an unwillingness of qualified teachers to work at previous pay levels. This will come as no surprise to economists, who say that real shortages are rare in a market economy. At the right price, supply grows to meet demand. There might have been a temporary real shortage if there were no qualified teachers willing to work at any price. But this was never the case.

Nationwide, only about two-thirds of new education graduates take teaching jobs. Of those who do teach, nearly one-third quit within five years. Although some may have been unsuited for the role, many leave education because they get better offers elsewhere. So there is a big pool of qualified teachers out there, ready to re-enter the profession when the price is right.

From Wednesday, October 23, 2002

A Washington Post story on how KIPP charter schools are achieving substantial gains in test scores according to a study released earlier this week.

The fall-to-spring gains at the KIPP DC/KEY Academy were more than twice the increases that students typically achieve from one spring to the next on the exam, the study says. About 80 percent of the school's students qualify for federally subsidized lunches....

KIPP, which stands for Knowledge Is Power Program, has an approach that emphasizes long school days, strict discipline and material rewards -- students can earn points for purchases from a student store and a year-end trip.

Education analysts said the test results and an announcement expected today of $8 million challenge grant to expand KIPP's network of schools raise the profile of a program challenging Edison Schools Inc. as the best known national model for educating low-income children.

Edison, a for-profit company, has been hurt by a drop in its stock price and resistance from teacher unions and officials in some cities, while KIPP has grown rapidly with grants from Doris and Don Fisher, founders of the Gap clothing stores. KIPP opened 10 schools this past summer and plans to open at least another 19 in 2003.

KIPP began in Houston in 1994, started by two teachers who were then in their twenties, Mike Feinberg and Dave Levin. The passing rate on Texas state tests for the first group of KIPP fifth-graders jumped from 50 percent to 98 percent in one year.

From Thursday, October 24, 2002

The Wall Street Journal (subscription required) on the problems facing Edison (which lost $86 million on $465 million in revenue in the fiscal year that ended in June) as it tries to finetune its strategy for running public schools and facing increasing challenges from organizations like the Gap founders-funded KIPP network of schools.

Edison Schools, private enterprise's biggest effort to change the face of public education, is confronting questions about its ability to survive.

The brainchild of media and advertising entrepreneur Christopher Whittle, Edison Schools Inc. has management contracts to operate more than 100 schools enrolling 80,000 students. Touted at its inception in 1992 as an innovative way to reform education while at the same time rewarding investors, Edison is praised by many educators who say that its curriculum is well conceived and its insistence on technology, longer school days and increased teacher training can only help students.

...Edison in recent months has said it would overhaul its operating strategy, cut unprofitable contracts and rein in its rapid expansion. Mr. Whittle, who bought Esquire magazine in the 1970s and brought the controversial, commercial-sponsored Channel One into public schools in the 1980s, brushes off questions about Edison's long-term viability. Focusing on the short term, he says, "by order of magnitude, this is going to be our best financial year." Edison has forecast earnings before interest, taxes, depreciation and amortization of at least $20 million in its current fiscal year.

From Tuesday, October 29, 2002

As the weather gets colder in San Francisco and two propositions are on the ballot related to the fate of the homeless, a city tradition remains alive in the face of inaccurate data on the growing homlessness in the city, according to this San Francisco Chroncile story:

George Smith, director of Mayor Willie Brown's Office on Homelessness, said up to 300 volunteers would canvas the city for the unscientific census, which starts at 8 p.m., after the city shelters close for curfew.

Smith said this would be his last hand-count. In future years, he said, San Francisco will rely on data collected by a newly installed computerized system that tracks the use of homeless services.

The annual fall count was born out of frustration with the city's wide- ranging estimates of how many residents are truly down and out. The estimates run from 8,000 to 15,000 people who are homeless or marginally housed, such as on a friend's couch or in a hospital.

...Last October's homeless census found 7,305 people, compared with 5,376 in October 2000. Of those homeless people found last year, 3,136 people were outside, and the rest were in shelters, hospitals, jails and treatment programs.

From Wednesday, October 30, 2002

The Gates Foundation continues to do good work vis a vis the HIV epidemic according to this Bloomberg story in the San Jose Mercury News. I believe the foundation has even declared that were a vaccine to be found, they would help get it distributed throughout Africa (and hopefully the rest of the world including the US).

The Bill & Melinda Gates Foundation has given a $6.5 million grant to an international health organization to evaluate Gilead Sciences' drug Viread as an AIDS-prevention treatment.

The Gates Foundation award to Family Health International will help fund clinical trials testing Viread in poor countries with high rates of the disease.

Viread won U.S. approval last year after studies showed it works in patients with drug-resistant forms of HIV, the virus that causes AIDS. The studies will evaluate the drug's safety and effectiveness in blocking HIV infection in sexually active adults who aren't infected though may be exposed to the virus, the Gates foundation said.

From Wednesday, October 30, 2002

With over $100M in donations from corporation and foundations during the life of this initiative founded by Steve Case with $10M in startup money, PowerUP will be powering down as of tomorrow leaving the nearly 1,000 community-based technology centers across the country to fend for themselves, according to this New York Times story (registration required). The Boys and Girls Clubs of America will step up to the plate for many but others may not fare as well.

When Stephen M. Case, then the chairman of America Online, and many other high-technology executives announced an initiative called PowerUP less than three years ago, they said that their donated millions would help bridge the "digital divide" between rich and poor.

"We must take steps now so that in the Internet century, no children are left behind," Mr. Case said...."We recognize that there are many projects under way in communities across the nation that seek to bridge the digital divide," Mr. Case said in November 1999, "but they are fragmented and lack the scale necessary to attract significant resources. PowerUP will help knit these initiatives into a national tapestry and jump-start a crusade that can change the lives of millions of kids, bringing together an unprecedented combination of people, skills and resources."

...Some experts in bringing technology tools to the poor said that there were problems from the start. Larry Irving, a former Clinton administration official who was a prominent strategist in digital divide efforts, called PowerUP a " McDonald's-style, top-down franchise operation," which he said is not the best method for community development.

From Wednesday, November 06, 2002

There's a growing trend among Americans in their 20s and 30s to take their entrepreneurial skills and apply them to building better schools according to this Washington Post story a few days back. For example, Stacy Boyd worked for the for-profit Ediston Project a few years ago, then started a successful charter school in her last year of business school and created a computerized system for aligning each student's lessons with state standards.

Now, five days short of her 33rd birthday, Boyd has her own company in San Francisco, Project Achieve, and is involved in a $3.5 million, federally funded effort to place her lesson-tracking system throughout the country.

She may have an unusual life story so far, but experts say there are many more like her. In the last few years, young Americans have been swept up in a national movement to fix public schools and are finding new career paths created by, among other things, the Bush administration's No Child Left Behind law.

Some of these educational entrepreneurs are involved in the more than 2,400 independent, but tax-supported, charter schools that have blossomed since Boyd read Chubb and Moe. Some have joined think tanks and foundations that promote educational experiments. Some are in technology firms, Web site businesses, teacher associations and universities.

From Wednesday, November 06, 2002

That is an astonishing number, and reflects the rapid growth of the network since it was invented in the 1970s.

However, that still leaves about 5.5 billion people who do not use the net and who have no access.

Most of these people live outside the developed Western countries. While over half of UK households are online, only 0.1% of homes in Bangladesh can claim the same.

From Saturday, November 16, 2002

The cost of getting into preschool in NYC can be very high as detailed in the recently released Jack Grubman emails to Citigroup CEO Sandy Weill according to this New York Times story (registration required):

Citigroup pledged to give $1 million over five years to the 92nd Street Y, which runs the nursery school Mr. Grubman's twins ultimately attended. The gift, which is to underwrite lectures and other events at the Y, was announced in the summer of 2000, and the Grubman twins started school a few months later.

...Members of prestigious nonprofit boards around the city are following the story with great interest but have no desire to discuss it publicly. "The fact that Sandy has been so incredibly generous himself makes it difficult to talk about it," one said. "The one thing that just doesn't feel right, whether it violates any rules or principles, is that this was shareholders' money."

..."Look, it's a well-known fact that when you send your child to an independent school in the city, if you have the money, you're expected to pay a lot more than the $20,000 tuition," said a board member at one school. "In many cases, parents are paying $50,000 to $100,000 a year."

From Saturday, November 16, 2002

I just bought Dave Eggers' new book, YSKOV or You Shall Know Our Velocity and have been laughing out loud at cafes across San Francisco. It is printed beautifully in some northern European/Scandanavian country, I believe, and very tactile, with an unusual cover (or lack thereof) which allows the novel to start on the hardbound casing/cover of the book itself. I'm enjoying it much more than AHWOSG even though some of the reviews on Amazon don't seem as favorable.

Eggers is my favorite contemporary author who I first heard at the recently concluded Litquake. He's not only a brilliant writer but has also taken the proceeds from his first book's success and set up 826 Valencia and is involved with Youth Speaks. The annual  Youth Speaks "Friendraiser" is on Monday and I'm hosting a table of 10 with all my friends coming along.

Here's an excerpt from the Time magazine review a few weeks ago (which was read thanks to the Google cache which completely disrupts the premium service offering of Time magazine in some cases):

Even before the success of Heartbreaking Work, a moving and fiercely intelligent account of taking care of his younger brother after the death of their parents, Eggers was a literary Johnny Appleseed who put substantial amounts of his own money into founding the literary journal McSweeney's and starting a publishing imprint, McSweeney's Books. Earlier this year he established 826 Valencia, a non-profit center in San Francisco where students can go for tutoring in writing. At the same time he has slipped into self-imposed obscurity, avoiding the press — he returned Time's phone calls but asked not to be quoted — and staging his readings as cryptic, Andy Kaufman — style happenings. And then there's his jars-of-dirt store. It could just be clever marketing — this kind of behavior discourages media attention the way napalm discourages fire — but even Velocity is being brought out coyly, in an initial printing of a mere 10,000 copies, available only at alternative bookstores. Is Eggers — not to put too fine a point on it — messing with us?

These and other questions are answered in You Shall Know Our Velocity. Like Heartbreaking Work, it is a book about mourning, but it eschews any of the metafictional skylarking of the earlier book; Eggers is through kidding around....

From Monday, November 18, 2002

A New York Times story (registration required) on how some nonprofits' fundraising is thriving thanks to new and/or younger blood.

In these difficult times, the right names for New York City's big-ticket charity benefits are, even more than ever, the ones with money behind them.

Many names are familiar, boldfaced ones like Sanford I. Weill, Blaine Trump, Felix G. and Elizabeth Rohayton and Oscar and Annette de la Renta, who continue to play important roles as organizers and donors to gala events.

But now they have more company, and for a number of reasons...

[And] Event organizers are using different strategies, too, including naming multiple chairmen and chairwomen and multiple honorees for major events. On the party front, more begets more. That is especially important now, when organizations are trying to make up for cuts in city financing and a general falloff in revenue.