Packard Packs, UPS Delivers, Reader’s Digest Shrinks

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Now you see him, now you don't. That's the story on John Govea brought on board by the Packard Foundation a year ago to frame and implement the foundation's new national youth development agenda. Govea spent the year learning the nuances, organizations and personalities of the field, which expected the Packard Foundation to roll out a portfolio of major national grants this year. But Govea's one-year contract was not renewed and now Program Officer Lydia Sandoval has been tasked with some youth issues. Contact: (650) 948-7658.

Who needs John Beresford Tipton, the fictional TV character of the '50s' show, "The Millionaire," to deliver unexpected cash when you have the United Parcel Service to do the job.

Such was the case on November 10, 1999, when UPS went public for the first time offering 109.4 million shares to investors for $50 per share. That represents just 9 percent of all UPS shares. UPS shares quickly rose to over $70 and as of late January were trading at about $68.75 per share. UPS founder Jim Casey gave his 41.6 million shares to the Annie E. Casey Foundation prior to his death in 1983. The successful Wall St. offering doubled the Baltimore-based foundation's net worth overnight from $1.8 billion to $3.6 billion since UPS stock was previously valued at just $26 a share. Now Casey is the 10th largest philanthropy in the country, up from around # 30 a year ago (with 80 percent of those assets in UPS stock).

So where's your share? Not so fast, say Casey officials. The foundation spent $120 million in 1999 and expects to make grants totaling about $146 million this year. President Doug Nelson, no leap before you look kind of guy, told the Associated Press that the foundation will wait several months to see where UPS stock finally settles before making any budgetary decisions.

Still the bonanza leaves the foundation with the kind of problems and opportunities that made "The Millionaire" a popular TV show for years. Under complicated IRS tax rules foundations must give away a rolling average of 5 percent of their net worth each tax year. If not Uncle Sam pockets the difference through an excise tax. In past recent years, Casey was paying out in grants an average of 7 percent. Just to payout at the minimum 5 percent rate, Casey would have to give away around $180 million in 2000 or eventually face the tax man.

When you've got that kind of money to spend its time to hire more help. The Casey Foundation has done just that adding the following to its 85 member staff.

Delia Carmen, a former MIS and planning official in New York City who will be an evaluator of Casey's jumbo 22 city "Making Connections Initiative." Tom Kelly, a former child protective services worker turned evaluator and technical assistance provider for-profit Maximus (a maximum consumer of federal contracts in the human service field) also joins Casey's evaluation team, along with Susan Batten, a former vice president of the Bala Cynwyd, Pa.-based Center for Assessment and Policy Development.

Promoted at Casey is Lynn White to the new job of Director of Human Resources and Operations. A five-year foundation veteran she previously ran its Children and Family Fellowship program.

Rehired after a two-and-a-half year Dutch interlude is Kathleen Feely, a former vice president who will now head up what one Casey official called "a rapid response team." Senior Fellow Feely will work says Casey "to develop our capacity to provide intensive and strategic assistance to system leaders" when the dung hits the political and media fan at local and state public agencies - which it does with depressing regularity. Casey President Nelson is one of five members of a Special Child Welfare Advisory Panel set up to help straighten out New York City's anemic but improving child welfare services. Contact: (800) 222-1099.

Here's a sort of Reader's Digest account of the still-evolving future direction of the publishing fortune amassed by DeWitt Wallace and his wife Lila Wallace. In 1987 four foundations derived from the 1921 founding of the Reader's Digest Association publishing empire were merged into two philanthropies.

Both Lila's fortune and DeWitt's are merged in the person of Christine De Vita, president since 1987 of both foundations. A visitor to its New York City headquarters was steered to the left for Lila's arts- and-culture focused staff, while youth work and most education groups were guided to the right for the DeWitt staffers.

In 1985 the DeWitt Wallace-Readers's Digest Fund and the Lila Wallace Fund had combined assets of $321.9 million. While Lila wandered off with the arts crowd, DeWitt took on guiding youth development. DeWitt's surge in grantmaking boloed in its early years, often ladling out million of dollar grants, mostly to established national youth serving agencies based on little more than a flimsy three-page proposal. But beginning in 1993, the foundation went through a major upgrade in staff and in its sophistication in grant making. Soon the DeWitt Wallace-Reader's Digest Fund became one of the most influential supporters and molders of positive youth development endeavors, spending $32 to 36 million in recent years to advance youth work.

The results (despite the foundation policy of treating evaluation findings as akin to military secrets) are judged by most close observers to have been excellent, strengthening the field's infrastructure, training capacities and even the youth services' fragile self-esteem.

Now that exceptional commitment to youth development, bracketed by program director Jane Quinn's arrival in 1993 and her departure in late 1999, seems to be winding down. Joining Quinn on the final ride down the elevator shaft was Holly Sidford her counterpart at the Lila Wallace Fund. The two foundations, both hit hard by the steep slide in recent years of Reader's Digest Association's common stock, have just merged into a single operating unit. Henceforth to be known as the Wallace-Readers' Digest Funds it will control combined assets of $1.5 billion. The new fund expects to make grants of nearly $100 million in 2000 up 19 percent over 1999.

The changes, says director of communications Bruce Trachtenberg, are mostly "a matter of how we present ourselves" to the outside world.

What is being presented are three priorities where, says Trachtenberg, the combined funds can "make a difference." Two are education and arts/culture. A third is "what we're loosely calling for the moment 'communities'" and the likely roost for whatever survives of the positive youth development agenda. While one in-the-loop observer says the priority of grantmaking to youth organizations remains "unresolved," a reassuring Trachtenberg is emphatic that "youth will continue to be important." But he observes that the revamped focus "will take us in a variety of directions"

Heading up the funds move into the already crowded educational leadership world is Mary Lee Fitzgerald, a former teacher, principal and schools superintendent who was New Jersey's state commissioner of education under Democratic governor Jim Florio. Promoted to director of the Arts Program is Michael Moore, a staffer with the Lila Wallace fund since 1994. Finally the new funds "Communities" portfolio has been assigned on "an interim basis" to Sheila Murphy, a staffer at the DeWitt fund for the past decade.

Looming large in this still in-motion picture is Ed Pauly, the foundation's director of evaluation who, say insiders, now calls the program shots in the post-Quinn era.

Closing the book on its pre-merger youth development focus, the DeWitt-Wallace fund in November made a $5.4 million package of grants to encourage public libraries to be seen as "cool places" for teens. Nine library systems from Philadelphia to Richmond, Texas received $400,000 over three years for youth work in libraries located in low-income neighborhoods. The Urban Libraries Councils in Evanston, Ill. (not the often asleep at the reference desk American Library Association) got $800,000 to manage a technical assistance initiative, while the Chapin Hall Center for Children in Chicago received $1.2 million over three years for one of those top secret evaluations this one to be led by Sam Whalen. Contact: (212) 251-9700.