Call Carl

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The Kansas City, Mo.-based Ewing Marion Kauffman Foundation (assets: $1.7 billion) is in the midst of a major overhaul of how and with whom it does business.

Hired last April as the foundation’s fourth president was Carl Schramm, former head of the Health Insurance Association of America. He’s worked as executive vice president of Fortis Health, a 110-year-old company with $1.5 billion in revenue. In 1996, he founded Baltimore-based Greenspring Advisors, a consulting firm with expertise in health care and insurance. Schramm’s clients at Greenspring Advisors included Ford Motor Co. and the Child Health Corporation of America.

Says Bob Rodgers, a former Kauffman president and until recently a trustee, “First and foremost he’s an entrepreneur.” That appears to be a good fit for a foundation that spent $36.3 million in 2001 through its Kauffman’s Center for Entrepreneurial Leadership on just that. But Schramm, says a well-informed Missouri observer, brings “a completely different culture” to Kauffman’s civil Midwestern precincts.

When the trustees drew up a job description for the successor to President Lou Smith, it tilted the search toward an outsider. That also tilted the job away from Steve Roling, a Kauffman Foundation senior staffer since 1991 and the foundation’s senior vice president of its Youth Development division, which made $34.4 million in grants in 2001.

Nowhere in the foundation – a major funder of youth work over the past decade – will the change be more profound than in youth development. In September Schramm reorganized the entire foundation, in part by eliminating its two semi-autonomous divisions – Youth Development and Entrepreneurial Leadership (and their separate boards of directors).

Roling is now senior counsel to the president.

Roling’s predecessor at the Youth Development shop, Gene Wilson, writes Schramm, will “champion our outreach efforts to other foundations” – an astute assignment, given Wilson’s sterling professional reputation. Under the new Schramm setup, the foundation staff will be assigned to one of seven “program area teams.” Several will relate closely to youth services. (See below.)
Kauffman’s 2001 Annual Report’s “vision” for the foundation is “focusing on youth development and entrepreneurship.” But youth work in the new Kauffman scheme will play second fiddle to education.

Writes Schramm in an August letter to grantees, “The Foundation remains committed to our two lines of interest – education and entrepreneurship.” Missing from the commitment list is youth development. To Schramm, the difference between “education” and “youth development” is a distinction without a difference. In a recent interview, he observed “Ninety-five percent of what we [Kauffman] do is youth development.”

Former president Rodgers says Schramm asks, “Where can we make a difference?” For Schramm, the answer is, above all, about entrepreneurship. The Kauffman Foundation, he writes “must shift away from looking at needs and concentrate on pivotal opportunities that bring about lasting change.” He also writes to Kauffman’s stakeholders, “We will create our own unique, uncommon approach,” and “We also want to take more risks at the foundation. We can’t work on every problem and have a lasting, durable impact on any. That’s what focus is all about.”

Each of the seven new program area teams is working on its own business plan. The idea, says Schramm, is to intervene at “just the right moment” in an area that “holds potential to effect large-scale change.”

That’s all well and good, but Schramm is steering the foundation away from the hyper-entrepreneurial world of nonprofit youth work and into the languorous embrace of education reform. Says Schramm, “Our part of youth development is education.” That emphasis, he says, is simply “just sharpening up our vocabulary.”

That path into the thicket of education reform was taken in past years by the Wallace-Reader’s Digest Fund (assets: $737 million) in New York City. Then doing business as the DeWitt Wallace Reader’s Digest Fund, the philanthropy spent about $25 million a year in grants to local and national youth-serving agencies that had profound, positive and lasting effects on the field, including training (aka, “education”) of youth workers and building organizational capacity to serve youth.

But that marvelously focused program was unceremoniously dumped in favor of education reform, whatever that is, and disappeared into the sinkhole of paying career educators to do what they should already be doing through myriad taxpayer-sponsored programs.

Then there’s the Annenberg Foundation (assets: $2.2 billion), which pumped $500 million into urban and rural public schools, only to conclude that its best return on investment came from training teachers and supervisors to operate more like program managers in the nonprofit youth field. Now the St. David, Pa., foundation (which just received about $1 billion from the estate of its founder, Walter Annenberg) is eyeing youth work as a key to raising the performance of teens at school and in life.

Schramm’s interest in education research will be cheered by the 23,000 members of the American Educational Research Association. When they gathered in New Orleans last April, the small-print conference program was 369 pages long. While it would take a platoon of laid-off Arthur Andersen accountants to locate more than a few million dollars in federal spending on positive youth development, the budget at the U.S. Office of Education Research and Improvement is nudging toward a half-billion dollars.

Former Kauffman president Rodgers calls Schramm “a researcher” looking for a “high level of risk” in his grant making. That, of course, is a characterization that fits thousands of nonprofit community-based youth-serving agencies, including hundreds in the Kansas City area. Unlike public schools, there is typically no de facto guarantee of future funding for almost all community-based organizations. For them, this year’s budget is a triumph. Next year’s is a hope; after that, a prayer.

One case in point is the 90-year-old Kansas City Boys & Girls Club, which received more than $2 million through eight grants in 2001 from Kauffman to serve 5,000 children and youth. Executive Director David Smith has run the $6.7 million agency for eight years. Even before his election to the Kansas City School Board, Smith was a high-profile and respected citywide leader.

The changes at Kauffman don’t phase Smith, who says, “Entrepreneurship is a daily occurrence for us.” Smith is a realist, noting, “We depend on the generosity of others.” That dependence is necessitated by an annual membership fee of $10 per child that is often waived. Like all Boys & Girls Clubs, the agency targets low-income neighborhoods – a take-from-the-rich, give-to-the-poor strategy pursued by other national groups, such as the YMCA and the Girl Scouts.

Boys & Girls Clubs of America estimates its affiliates spend, on average, $1,800 plus a year on each club member. The Kansas City club’s dues cover 0.55 percent of that. Notes Smith, “We don’t have any place to go,” except for the generosity of others.

Schramm grew up in Syracuse, N.Y. He belonged to several youth development groups, including the Boy Scouts and the Catholic Youth Organization, was a summer camper and school debater – a skill in full evidence during a recent telephone interview. Challenged on his tepid support for youth work, attorney Schramm sliced right into the field’s soft underbelly by declaring, “Almost anything becomes youth development,” rendering the term as meaningless as “education reform.”

For advice, he looks to Children’s Defense Fund (CDF) President Marian Wright Edelman, retired Robert Wood Johnson Foundation Vice President Ruby Hearn, University of Maryland Baltimore County President Freeman A. Hrabowski III, and W.T. Grant Foundation President Dr. Karen Hein – who like Schramm (and RWJ’s new president, Dr. Risa Lavizzo-Mourey) is a former RWJ fellow.

Among the children and youth programs that impress Schramm are CDF’s summer Freedom Schools, the whole-school reform approach of First Things First and mentoring programs.

Rodgers, who helped hire Schramm, says, “He’s not going to be like other foundation” leaders and will search for a “high level of risk” in new grantees. Writes Schramm to his current 600 grantees, “I hope we are different, not in the commitment, but in the vigor we bring to thinking about how we improve our society.”

Combine “vigor” with Schramm’s “much tighter focus,” and the Kansas City Boys & Girls Club and national youth-serving organizations will be busy sharpening up their business plans. Smith’s club might want to kick up its dues to $11 in order to demonstrate its entrepreneurial spirit.

Guidelines for new grantees, says Schramm, will be out in February. But one of the seven program area teams, led by Judith Cone, is Program Transitions, where jettisoned grantees are ominously promised “a graceful ending or another scenario.”

Schramm writes, “I welcome your thoughts, comments and/or questions about this information. Please send me an e-mail message at to share your views.” If the reply is from Cone’s shop, it may be time for grantees to Call Carl and have their program towed off to the junkyard. Contact: (816)-932-1000

Kauffman Foundation: Selected 2001 Grants

• Boys & Girls Clubs, Greater Kansas City – $2,049,750 in grants for organizational development of four hub sites, the Powerup computer initiative, youth leadership and mentoring, and to restore the Satchel Paige Memorial Park.
• Camp Fire Boys and Girls, National Office – $450,000 for the Community/Family Club Model to build assets in youth, families and communities.
• Citizens for Missouri’s Children – $388,800 to build public support for increased public spending on high-quality early education.
• Developmental Studies Center – $400,000 for further development and dissemination of KidzLit, an after-school reading program.
• El Centro Inc. – $205,000 for equipment upgrades for the “Keyboards to Success” employment and training effort.
• Girl Scouts, Mid-Continent Council – $500,000 for Project Within Reach, focusing on girl scouting in the “urban core.”
• Junior Achievement Inc., Middle America – $250,000 for expansion to help youth learn about business programming.
• Kansas Action for Children – $1.2 million for the Kansas Children’s Campaign.
• Kansas City 4-H, After-School Academic Program – $271,152 to increase the developmental assets of urban Kansas City children and teens.
• Kansas City’s Promise – $170,000 to expand delivery of “the five promises” to greater Kansas City youth.
• Learning First Alliance – $350,000 for this collaboration of education organizations to improve reading and math achievement in Kansas and Missouri.
• Little Flower Community Computer Center – $90,000 for core operating support.
• Manchester Craftsmen’s Guild – $2.4 million for operations and infrastructure development of the Denali Initiative to accelerate the development of not-for-profit executives.
• Mini-Society for Youth Organizations – $883,934 to disseminate the Mini-Society program to youth organizations and provide for instructor training.
• National Network for Youth – $150,000 for an annual forum on and for journals about community youth development.
• National Youth Information Network – $125,000 for the national Youth Information Line in Kansas City, providing information about positive youth-serving resources.
• YMCA, Greater Kansas City – $560,000 for grants for AmeriCorps/Vista volunteers to staff Powerup sites and for planning and implementation of youth development programs.
• YWCA, Kansas City, Kan. – $256,000 to implement Community Change for Youth Development, an effort to bring youth and adults together to plan for youth development.
• Young Americans Education Foundation – $250,000 to update technology for enhanced programs.
• Young Entrepreneurs’ Organization – $675,000 to diversify and expand programming for members and other entrepreneurs.
• Youth Net, Greater Kansas City – $250,000 for quality youth development.
• Youth Service America – $200,000 for day-to-day operations to help youth improve their leadership skills.
• Youth Today – $300,000 to support publication of the newspaper.

The New Team Area Leaders at the Kauffman Foundation:
Policy and Research – Jay Kayne
Entrepreneurial Development – Rhonda Holman
Kansas City’s New Economy – Kurt Mueller
Early Education – Lisa Klein
K-12 Education – Susan Wally
Mentoring – Janine Lee
Program Transitions – Judith Cone