That sage of American life, Will Rogers, once observed, “I’m not a member of any organized party – I’m a Democrat.” Today he could say of non-unionized left-leaning children and youth supporters, “I’m not a member of any organized PAC – I’m a liberal.”
Almost 4,000 PACs (political action committees) have dominated the “I’m for sale” climate of federal elections for a quarter-century. Conservative pro-family PACs pull in millions of dollars for anti-abortion, abstinence-until-marriage, anti-gay and pro-school-prayer congressional candidates.
In the 2002 election cycle, two groups (the Cambridge, Mass.-based KidsPAC and the D.C.-based Every Child Matters) barely put a dent in the left vs. right (and for all practical purposes, the Democrats vs. GOP) spending gap on the kids’ front of the nation’s cultural and political wars.
KidsPAC was launched in 1981 by Bill Harris. In the last campaign the group donated $286,121 to 111 candidates for Congress. Just two Republicans, Sens. Pete Domenici (N.M.) and Ted Stevens (Alaska), each receiving $5,000, made the KidPAC’s list.
KidsPAC contributors included Walter Mondale ($500), donated a year before his unexpected Senate campaign; Ellen Malcolm ($500), president of the leading Democratic women’s PAC, Emily’s List; former MacArthur Foundation President Adele Simmons; former Health and Human Services Clinton-era political appointee Ann Rosewater ($500); two relatives of financier George Soros ($5,000 each); Family Resource Coalition of America (now Family Support America) founder Bernice Weissbourd ($250); Boston child abuse expert Dr. Barry Zuckerman ($4,500); and Center on Budget and Policy Priorities President Bob Greenstein ($400).
As in the past, Harris’ relatives were big donors. One, Benjamin Harris, an intern at the Yale Child Study Center, gave $10,000.
As for KidsPAC’s return on investment this fall, a truculent Harris would only say, “It was not a good election for kids.”
Eschewing Harris’ strategy of giving only to candidates is Every Child Matters (ECM), run by Mike Petit. He served for eight years as commissioner of Maine’s Department of Human Services and was most recently a deputy director of the Child Welfare League of America.
While Harris’ PAC has the feel of a rich guy’s hobby, Petit’s group (formerly known as the Children First Campaign) has the tough demeanor of an audacious behind-the-enemy-lines operation besieging a much stronger foe.
Petit’s would-be commandos have set up two groups, both guided by the premise that, as Petit says in a statement, “smart policy making for children happens when its also seen as smart politics.” One is a 501(c)3 organization called the Every Child Matters Education Fund that, like all groups with that IRS tax status, is barred from engaging in partisan political activities. The other is a 501(c)4 which can, through a device called a 527 account, engage is such activities. But here’s the rub: So-called “soft money” donations to this type of nonprofit are not charitable tax deductions for the donor.
First, Petit secured his base (that’s the D.C. office and a staff of four) with donations to the 501(c)3. Topping the donors’ list are the David and Lucile Packard Foundation ($249,920), the Robert Wood Johnson Foundation ($49,980), the Fidelity Charitable Gift Fund ($50,000) and Action Against Crime and Violence ($75,000). The latter does business as Fight Crime: Invest in Kids, and passed along the funds from an anonymous supporter.
With much of the organization’s non-partisan tax-exempt money, Petit commissioned an Arkansas public opinion poll on children’s issues, and during the fall Senate and House campaigns spent more than $200,000 in the state on TV and radio ads.
That Arkansas Mason-Dixon poll found that only 8 percent of all voters were “very familiar” with their congressional candidates’ specific stands on children’s issues. Contrast that with the 42,888 children in the state (more than 6 percent of the youth population) who were reported abused or neglected in 1999. That means that for every abused child, about 1.25 voters were well-informed about their Washington representatives’ positions on children’s issues.
Mark Pryor was the only Democrat in the nation this fall to oust a U.S. Senate Republican – Tim Hutchinson, who had won the seat after Pryor’s father retired from the Senate in 1996. Hutchinson, a Bob Jones University graduate, ran then as a “family- values” conservative, only to divorce his wife and marry a younger woman on his congressional staff. Did Petit’s effort make any difference at all in Pryor’s victory?
“No,” says Amy Rossi, executive director of Arkansas Advocates for Children and Families. Petit’s campaign “wasn’t real active here” and the TV and radio spots “didn’t resonate,” even with a sympathetic audience such as Rossi’s stakeholders. “Education was in front of people’s minds,” she says.
With the hard-to-raise “soft money” in the 527 account, Petit took aim at Republican Sen. Wayne Allard of Colorado. First elected in 1990 to the House, Allard moved to the Senate in 1996. There he compiled an approval rating of 9 percent from the Children’s Defense Fund, which ranked him among the eight “worst senators for children.” In 2000 he earned a zero rating from Americans for Democratic Action and a 100 from the Christian Coalition. Allard’s response to the Columbine school shooting was to push through a law permitting the display of crosses and other religious symbols on school property after a school killing.
Allard’s opponent this fall was former U.S. Attorney Tom Strickland. Playing by the complex rule book of campaign finance laws, Petit says, “I never met or spoke with Strickland.” But Petit did conduct an air war in Colorado, spending, he says, $516,107 in TV and radio spots attacking Allard’s record on children’s issues. Allard’s campaign manager, Dick Wadhams, called the Every Child Matters effort routine liberal mud slinging.
Allard won, 51 to 46 percent. Petit is unfazed, noting that “it’s the first time for paid political ads” for the liberal children’s agenda. “The news isn’t if we succeeded in a single race,” but that a group like Every Child Matters was involved at all.
But Maria Guajarno Lucero, the director of Assets for Colorado Youth for its entire six years, isn’t so excited by Every Child Matters’ TV and radio appearances in Colorado beginning two weeks before the Nov. 5 election. The effort certainly was visable “to anyone who was watching TV,” she says. But by the time the ads were broadcast, “people were already too jaded” by other attack ads.
Lucero says the ads were “anxiety provoking” and “didn’t further advance the voters’ concerns around children’s issues.” Spin-doctor Wadhams says the ads actually helped Allard: “The Hollywood liberals who fund this Every Child Matters crap should be embarrassed by what they did.”
The 2002 election cycle, says Petit, proves “that kids’ issues can be integrated into an election.” But integrating any issue into a campaign doesn’t come cheap. The donors to Every Child Matters in 2002 included film director Rob Reiner ($10,000); Susan Weiss ($100) of Seattle’s Casey Family Foundation; John Hunting ($15,000), president of the Dyer- Ives Foundation in Grand Rapids; Cecilia Garcia ($50), executive editor of the Connect for Kids internet news service; and two labor unions ($30,500 total).
Petit has said since his group’s official launch in January that this was “an incubation period.” He now hopes to raise “about $2 million” for political action beginning in the 2004 early primary states of New Hampshire, Iowa, South Carolina and Oklahoma. He also expects to run issue ads in “five to 10 Senate races.” This is an approximate alignment with Gary Bauer’s conservative, Arlington, Va.-based Campaign for Working Families PAC, which spent $1.3 million last year to urge child lovers to vote GOP.
Contact: Every Child Matters (202) 393-0504 or http://everychildmatters.org; KidsPAC (617) 413-5048.
YFU’s Corporate “Exchange”
Since 1951 Youth For Understanding (YFU) has enabled an estimated 200,000 teens to spend up to an academic year attending school and living with a family in one of 62 countries. Three-quarters of YFU exchanges involved a youth coming into or leaving the United States.
Now the youth exchange group has gone bust, sort of, leaving behind saddened supporters, YFU counterparts in other nations recreating a “new” exchange partner in the U.S., and lots of debt, including more than $4 million owed to American Express.
In 1978, under YFU President Philip Yasinski, the group moved from Ann Arbor, Mich., into D.C.’s top limousine-liberal neighborhood, Cleveland Park, by acquiring a six-acre site from a nearby girls’ school. Over the next 24 years the group, whose annual income climbed to as high as $25 million, made enough strategic and tactical business mistakes to fill a book on how not to run an international or national nonprofit.
Our candidate for the authorship assignment is former YFU board member and former CEO of the Girl Scouts of America Frances Hesselbein. She now runs the Peter Drucker Foundation in New York, which awards the annual Peter F. Drucker Award for Nonprofit Innovation (which, as events unfolded, may result in YFU’s successor group getting a nomination for “innovation” this year).
Basically, YFU and other youth-exchange groups work by collecting fees for placing youths in family settings, mostly in sought-after countries. In order to function over the long haul, the organizations need to maintain an extensive and ever-changing network of eager host homes and cooperative school districts. That’s an increasingly tough task with mothers at work and many public school districts fending off outside enrollments.
On the business side, the details are infinite, but a sound financial management policy is simple: Run all income through a centralized account so that a from-each-according-to-his-ability, to-each-according-to-his-needs philosophy can keep the entire organization healthy.
For YFU that proved no simple matter. Over the past two decades, as it fancied itself an important international player, YFU hired a string of career diplomats (not exactly a group known for its business acumen). As YFU grew and prospered, its counterpart groups in Western Europe, Japan and other developed countries evolved into essentially independent fiefdoms, able to resist or override decisions made at the D.C. headquarters.
YFU’s board, which numbered up to 22 members, managed to chaperone YFU through a grand tour on how not to do its policy and oversight job. The board (say critics) was far too involved in all the wrong things (like routine operations), with YFU’s emasculated CEOs getting multiple directives daily from afar on how to run the complex operation: from major blunders like forcing the staff into a disastrous change of travel agencies, to petty (but demoralizing) actions such as Atlanta-area board member (and Coca-Cola employee) Marsha Dickey banishing the office Pepsi machine in favor of Coke.
Succumbing to intense pressure from their German, Scandinavian and Japanese counterparts, in the early 1990s the group drifted through the fatal decision to let these prosperous affiliates keep the fees collected from youth heading to the U.S. – a group that far outnumbers American teens wanting to go to, for example, Germany. According to the U.S State Department, each year some 29,000 foreign teens spend a year in the U.S. on an organized youth exchange program.
With no cohesive board setting its direction, YFU failed to adapt fast enough to a changing world. American home placements became scarce while competition increased from an estimated 80 to100 groups – including profit/nonprofit EF in Cambridge, Mass, nonprofit AFS in New York and AYAUSA in San Francisco. Still, YFU placed an average of some 2,000 to 4,000 teens each year, including 3,000 this school year. That’s more than 10 percent of the American youth exchange market. But one seasoned expert says YFU was always “one organizational step behind,” had “high overhead,” and “never priced their product correctly.”
While the board discussed what brand of soda to dispense, it ignored the big picture. Shorn of its power to demand and collect fees, YFU’s headquarters became, in the words of Kathleen Schatzberg (YFU’s last board chair and president of Cape Cod Community College), “the banker for the rest of the world.” But while YFU was underwriting exchanges in developing countries, other wealthy nations’ operations prospered by sending teens to the U.S. even as YFU’s headquarters swam in red ink. This was finessed by spending down an endowment of up to $10 million and borrowing against the manicured Cleveland Park estate – which made headlines in 2000 when it became the temporary home for the world’s most famous “exchange” youth, Elian Gonzales, and his Cuban father.
As YFU sank, the board faction made up of former host family volunteers, including Schatzberg and Dickey, intensified its daily meddling in operations, including firing senior staff who resisted board directions. In May 2001 the board went so far as to appoint Dickey (then retired from Coca-Cola) as the paid president. Her most noteworthy contribution before being replaced five months later, says former staffer Jeff Lodermeier, was to rearrange the office furniture so it was in harmony with feng shui beliefs.
Belatedly realizing that without a U.S. partner, its own operations would be crippled, the foreign affiliates made “loans” to YFU, most guaranteed through liens on YFU’s real estate. When bankruptcy came in March 2002, affiliates in 29 countries were owed money by YFU, according to a July filing with the United States Bankruptcy Court. The German affiliate, for example, was out over $2.3 million; Japan, over $1.3 million. Total claims against YFU are being fought over in court. After proposed sales to several nonprofits (including Special Olympics) fell through, the property was sold for $12 million. But, according to bankruptcy filings and a former senior staffer, the debt could reach $20 million or more. Says Schatzberg of YFU’s demise, “I feel it very much as a personal failure.”
But wait, there’s more. Through the magic of bankruptcy, the major overseas YFU stakeholders were able to create – presto – YFU USA on the very day in March that YFU went out of business. Now a three-member board, chaired by Ulrich Zahlten of Germany, is running the new, debt-free operation, which purchased YFU’s logo, mailing list, etc. for about $200,000. An affiliated group, Educational Services Inc. (ESI), purchased YFU’s trademark for $314,000. A second board member, Michael Finnell, a former deputy director of the EFI-controlled International Advisory Council at YFU, is president of the new outfit, located in suburban Bethesda, Md. YFU USA now has 40 staff at headquarters, and an equal number working around the country.
Says YFU USA President Finnell, “The line has been drawn strongly between the two companies.” That line was conveniently drawn after all the top YFU managers were paid their wages and benefits in full, according to bankruptcy records.
Creditors (including ex-employees owed for vacation time and medical expenses) are trying to pierce the corporate veil. At least one, former Vice President of Program and Student Affairs Paul Risteen, has managed to do so by winning a federal court order requiring that the new corporation honor his COBRA rights through YFU USA’s health insurer. So the old board, which includes retired Family Service America CEO Geneva Johnson and Points of Light CEO Bob Goodwin, isn’t out of the international exchange business quite yet.
Contact: YFU USA (240) 235-2100 or www.yfu-usa.org.
On Board at Ford
Way to go Macon, Ga., Boy & Girls Club! Loren Harris may not be a silver screen heartthrob like Denzel Washington (a Mt. Vernon, N.Y., Boys & Girls Club alum), but he is the new program officer for youth and community service at the New York City-based Ford Foundation (assets: $11 billion). He replaces Inca Mohammed, who left a year ago. Harris’ job, he says, is “going to continue to support efforts that engage youth and increase their participation in society.”
Due to an internal reorganization that eliminated Ford’s Human Development and Reproductive Health operation, Harris is part of the Community and Resource Development section within the Asset Building and Community Development office. Prior to joining Ford in October, he was an associate program officer at the Flint, Mich.-based C.S. Mott Foundation. Harris worked on urban poverty issues, particularly through Mott’s nationwide $12-million Fathers at Work Initiative.
“Youth development is central to my work,” says Harris, who began as a “full participating member” at his Macon youth club. He went on to work at Boys & Girls Clubs in San Bernardino, Calif., Washington and New York City. He also worked in New York City as director of the S.T.R.I.V.E. youth employment program and as a youth worker at the Stanley M. Isaacs Neighborhood Center.
Contact: (212) 573-4821 or www.fordfound.org.
