America’s Promise (AP) has a new president from the Volunteer State, Marguerite Sallee, who most recently served as staff director of the Senate Health, Education, Labor and Pensions subcommittee on Children and Families, chaired by Sen. Lamar Alexander (R-Tenn). Sallee replaces Peter Gallagher, who retired earlier this year after seven years on the job.
The Alexandria, Va.-based nonprofit was launched in 1997 after the Presidents’ Summit on Volunteerism, in Philadelphia. Its most visible proponent has been Secretary of State Colin Powell.
AP says its mission “is to mobilize people from every sector of American life to build the character and competence of youth.” AP has a staff of 38, and in 2003 reported income of $7.6 million, with $5.4 million coming from the taxpayers – most via a $5 million congressional earmark in the budget of the Corporation for National and Community Service (CNCS). No one who really understands the business climate for youth-serving national nonprofits that lack an underpinning of fee-for-service income streams is surprised that 71 percent of AP’s revenues that year, according to its federal tax returns, came directly from government grants. AP spokeswoman Audrey Waters contends that the correct figure is 50 percent.
Before the Founding Fantasizers, including Sallee, gathered in Philadelphia in 1997, competition-shy national youth-serving organizations were assured that AP would exist for only three years. And, best of all, corporate America would cheerfully pick up the tab for a national headquarters and other expenses.
Now eight years-and-counting later, AP has joined dozens of national youth groups such as Big Brothers Big Sisters, the Boys & Girls Clubs of America and the volunteer-promoting Points of Light Foundation as semi-permanent fixtures in the federal budget.
What’s wrong with that? A helluva lot, according to the National Commission on Philanthropy and Civic Renewal, set up by the conservative Lynde and Harry Bradley Foundation. The commission was chaired by Alexander and staffed by Bruno Manno, now a senior fellow at the Annie E. Casey Foundation.
Chiming in with Alexander’s commission on the evils of governmental grant making to nonprofits were Leslie Lenkowski, who later served as CEO of the CNCS; Heather McDonald of the Manhattan Institute, author of a broadside on philanthropy entitled “The Billions of Dollars That Made Things Worse”; criminologist James Q. Wilson, a regular beneficiary of federal grants through the Justice Department’s Office of Justice Programs; and Robert Woodson, whose National Center for Neighborhood Enterprise hasn’t met a payroll without a noncompetitive federal grant in three decades.
In the commission’s June 1997 final report, Alexander’s ragtime band opined that “to remain effective, philanthropy and volunteerism must be shielded from government’s sometimes fatal embrace.” As a case in point, Alexander noted that “the recent [p]residential summit [sic] seemed to reinforce an unreflective sort of volunteering – and the assumption that fostering volunteerism is the proper work of government.”
One fan of the commission’s work is Don Eberly, a conservative fatherhood guru now on the staff of the White House Office of Faith-Based and Community Initiatives and author of a 1999 get-government-off-our-backs treatise entitled, “America’s Promise: Civil Society and the Renewal of American Culture.” Eberly writes, “They [Alexander, et al] are the only ones looking at philanthropy in terms of its role in social services once the government pulls out.” Then, Eberly might have added, Tennessee would be only one of 50 all-volunteer states.
In June 1997, New York Times columnist Frank Rich reviewed the commission findings and concluded that, “What Bill Gates is to software, Mr. Alexander is to hypocrisy.” Rich found the commission’s recommendations mean-spirited. “Only the poor can’t afford to laugh,” he writes.
Sallee’s ties to Alexander go far deeper than her recent 17-month stint on his Senate staff. She ran Tennessee’s Healthy Children Initiative before being appointed commissioner of the state’s Department of Human Services in 1985 by Alexander, who was then governor. In 1987, Sallee, Alexander and the late Bob Keeshan, aka Captain Kangaroo, began Corporate Family Solutions. (Alexander invested just $5,000.) Sallee became CEO of the Nashville-based company, which carved out a large hunk of the lucrative corporate-sponsored child care industry, with clients such as Sears and Marriott.
Progress was initially slow, as Sallee pitched the company’s services to wealthy, out-of-touch corporate executives. Sallee, now 58, and a divorced mother of two, was in touch with workplace reality and persevered, telling an Associated Press reporter in 1997, “Today, doors don’t slam in my face as often.” That surely is a good training experience for her new AP fund-raising responsibilities.
By 1994, Sallee’s company reported $30 million in revenue. It merged with another company in 1998 and is now known as Bright Horizons Family Solutions Inc. Based in Watertown, Mass; it had reported earnings of $472.8 million in 2003. Says Sallee, “I’m very proud of the company,” which operates 500 child care centers.
The rewards for Sallee’s work in the children’s field have been considerable. Since May 2003 alone, her sale of stock in Bright Horizons has totaled $900,925. No wonder her former boss Alexander supports President George W. Bush’s free tax ride for wealthy investors. All the better to cover those pricey greens fees for Sallee, who is chair of the Ladies Professional Golf Association.
In 2001 Sallee became CEO of the for-profit The Brown Schools, then a Nashville-based company that now operates 12 schools for troubled youth in five states. Its 2002 revenues were $170 million. “Sallee returns to education and youth services roots,” Brown ballyhooed in a press release upon her appointment.
Upon her appointment to The Brown Schools, Sallee said in the release, “I am ready to immerse myself fully in the organization and do everything in my power to help us achieve our greatest potential in terms of education and quality care for the young people we serve.” Eighteen months later, she was off to her Senate job.
The AP press release touting Sallee’s appointment makes no mention of her tenure at The Brown Schools. The company is owned by McCown, DeLeeuw & Co., a Menlo Park, Calif., holding company. During Sallee’s stint as CEO, the company sold off six residential treatment facilities for youth to Franklin, Tenn.-based Psychiatric Solutions Inc. (PSI) and another to Ardent Health Services, based in Nashville. The sale of the six hospitals to PSI yielded $63 million. Current president Bob Naples says the facilities generated a lot of cash but little profit and were a magnet for lawsuits by former clients, whose costs were paid at public expense, including Medicaid. Besides, says Naples, the sale “reduced debt on the balance sheet.” The corporation is now based in West Palm Beach, Fla.
One debt left in the balance is litigation over the death of 17-year-old Chase Moody in October 2002, when Sallee was CEO. The Brown Schools owned and operated On Track, a therapeutic wilderness camp in rural Hill County, Texas, that Moody attended. A state investigation found that Moody was the victim of physical abuse in connection with his death. He was being restrained by at least three youth workers when, according to the autopsy cited by the Austin American-Statesman, he suffocated on his own vomit.
The state cited the facility for 28 violations of Texas health-licensing standards, the newspaper said. It said Moody was the fifth youth to die while being restrained in The Brown Schools’ Texas facilities since 1998.
Another outfit that Sallee has done business with is Jobs for America’s Graduates (JAG), which focused on school-to-work issues and has been run since 1980 by GOP operative Ken Smith. Like AP, it’s located in Alexandria, Va., and just as AP once did, it shields its business affairs and staff salaries by hiring another company to carry out its work. JAG hired Smith’s for-profit company, the Frontline Group, to do whatever it does.
In early 1999 Sallee purchased Frontline Group from Smith and served as its chairman and CEO. Backed by $100 million in capital from a Chicago investment bank, Sallee tried to turn Frontline into a soft-skills roll-up firm that specialized in accessing government job-training funds. When she was hired to run The Brown Schools in 2001, a press release from Brown said, “She was instrumental in involving many of Frontline Group’s 500 employees in JAG programs around the country.”
But what looked like an example of the kind of volunteerism with youth that AP was set up to promote turned out to be one of those squirrelly nonprofits living off the government in the manner decried by the Alexander commission.
JAG has long been a regular on the coveted congressional earmark list that AP broke into in 2000. In fiscal 2004, JAG received a $1 million noncompetitive earmark. What happened to these public revenues at the nonprofit JAG is unknown. JAG’s federal tax returns for 2002 list not one cent in staff salaries. Is JAG the nonprofit of Alexander’s fondest dreams?
Not really. It has a permanent “management contract” with Frontline Group that cost $529,900 in 2002. In effect, JAG President Smith hires himself via Frontline Group, which Smith sold and later bought back from Sallee’s now disbanding company that used the same Frontline name.
Sallee says her new job at AP “brings my career full circle.” America “can’t lead the world if we ignore our kids.”
Some would argue that we are doing just that. The federal deficit for fiscal 2004 is expected to be a record $442 billion. The federal debt over the next decade, says the nonpartisan Congressional Budget Office, will grow to $2.3 trillion – hardly a bright horizon for today’s children. According to the U.S. Census Bureau, in 1967 the bottom one-fifth of U.S. households earned just 4 percent of the nation’s income, with the top one-fifth earning 43.8 percent. By 2003, the impoverished one-fifth and their children lived on 3.4 percent of the national income, while the wealthiest one-fifth receive a hair under half of all household income.
According to the 2004 Kids Count report, 16.7 percent of America’s children live in poverty, and 750 kids join them each day. When it comes to overall child well-being, Sallee’s Tennessee ranks among the worst states in the nation, at No. 43.
AP, of course, did not create this situation and cannot cure it – regardless of Sallee’s indisputable business acumen. “What’s missing,” she says, “is the framework and the focus” on children. America’s children will need more than that. Promise. Contact: America’s Promise (703) 684-4500, www.americaspromise.org.
Children Now, or Never
It’s been a while now since the youth service field has heard much from Children Now. The liberal Oakland, Calif.-based group hopes its new president, Ted Lempert – a 43-year-old former Democratic member of the 80-member State Assembly – will turn up the volume.
Children Now describes itself as “a research and action organization dedicated to assuring that children grow up in economically secure families, where parents can go to work confident that their children are supported by quality health coverage, a positive media environment, a good early education, and safe, enriching activities to do after school.”
Founded in 1988 by Jim Steyer, the nonprofit has been a national leader in promoting a child-friendly media environment and campaigning for children’s access to health care. Over its history, the group has flip-flopped on whether it’s a player in California only, or nationally. “That,” says Communications Director Kristie Wang, “is the million-dollar question.”
One of Children Now’s major efforts is its “100 % Campaign: Health Insurance for Every California Child.” This is no small matter in a state with 9.5 million children, 1 million of them uninsured. Its two partners in that campaign – the Children’s Defense Fund and the Children’s Partnerships – both have Washington offices. But Children Now is an affiliate of the Washington-based Voices for America’s Children. It does the Kids Counting in California for the national effort financed by the Annie E. Casey Foundation.
When founding president Steyer left in 1993, he was succeeded by attorney Lois Salisbury. On her watch, Children Now reached its apex in visibility and policy clout. By the time Salisbury departed in early 2002 for the David & Lucile Packard Foundation to become director of the Children, Families, and Community Program, Children Now’s annual budget had reached $2.4 million and its staff numbered 30. Its Children and the Media, Children’s Health and Working Families programs were riding high, along with the national economy and the Internet bubble.
Since 2002, says a candid Wang, Children Now’s budget has been on “a downward trend” that led to “a couple of rounds of [staff] trimming.” Children Now’s leadership has been, Wang acknowledged, “a little murky since Lois left.” A yearlong tour as acting president by Amy Dominguez-Arms ended when University of Michigan social work Professor Michael Reisch took over in January 2003. But it soon became apparent, says one insider, that he was “a bad fit.” He returned to the university after nine months.
Back in the top job was Dominguez-Arms, but she followed Salisbury to the foundation world in April, becoming program director for California perspectives at the scandal-singed James Irvine Foundation, a major California grant maker.
Estimates of Children Now’s influence and clout over the past decade depend on what piece of California’s huge and convoluted social policy landscape one surveys.
One youth expert not involved in media or child health work says Children Now “has fallen off the face of the earth.” Others emphatically disagree. Lori Dorfman, director of the Berkeley Media Studies Group, has noticed “no loss of visibility.”
Dorfman credits Children Now Media Director Patrice Miller, along with leaders of a coalition of eight national groups, with a recent and unexpected Federal Communications Commission (FCC) victory on digital television programming for children. In September, the FCC ruled that a broadcaster who multicasts a digital signal to air two or more channels (up to six are allowed) will be obligated to show three extra hours of kids’ TV a week for each 24-hour multicast channel.
Explaining the decision, FCC Chairman Michael Powell (son of America’s Promise Chairwoman Alma Powell) said: “At a time where [sic] broadcasters using the public airwaves may now be able to increase their programming by as much as six times the content they used to, so too should their obligations to serve our nation’s youth increase.”
Bob Fellmeth of the San Diego-based Children’s Advocacy Institute (CAI) says of Children Now, “they are the lodestar for many of us” in child advocacy.
Is it a new day for Children Now with Lempert’s hiring? The group received a $650,000 grant for 2004 from Packard, assuring that Lempert won’t have to worry about meeting next month’s payroll. That was not a problem at EdVoice, a statewide education reform group and a 501(c)4, which Lempert co-founded after being forced out of the State Assembly by term limits in 2000. During his eight years in the Assembly, Lempert represented a district in San Mateo County south of San Francisco and focused on K-12 and higher education issues.
Fellmeth, Lempert says, is “badly needed” in Sacramento. A harsh critic of Gov. Arnold Schwarzenegger, Fellmeth says the “legislature is the ball game” for those seeking to improve the welfare of California’s children. Lempert, says fellow lawyer Fellmeth, is “respected on both sides of the aisle” and is just what child advocates need.
But Lempert seems to have taken a pass on youth service issues. Complains one Sacramento operative of Lempert, “He was not even tied in with the things we were trying to do in youth development.”
Children Now will soon develop yet another strategic plan, in which, communication director Wang speculates, “we are going younger,” targeting “probably [ages] zero to five.” The press release announcing Lempert’s appointment quotes Board Chairwoman Jane Gardner as “confident” that Lempert “will significantly enhance Children Now as the go-to resource for research and policy issues relative to children’s needs.” Lempert is quick to declare that he is “passionate about children’s issues.”
When serving as a San Mateo County supervisor, Lempert helped start the county’s youth commission. Even so, Children Now under Lempert seems unlikely to become a major advocacy force in the youth development field. Children Now’s second-largest funder, the California Endowment, tilts toward younger children’s health issues.
But the demise of the California Children’s Lobby in 2003, once led by Alan Watahara, combined with an anemic California Child Youth and Family Coalition, has created a niche to be filled in state youth policy and budget advocacy. So who speaks with authority on youth issues in Sacramento? “That’s a good question,” says Alecia Sanchez, a CAI senior policy analyst who staffs the Children’s Roundtable, a gathering of 50 to 100 advocates who meet monthly in the state capital. Hesitantly, she finally offers up the California Adolescent Health Collaborative as an active youth advocacy group.
Lempert describes himself as a “real strong believer in advocacy” and one who knows how to “get things through” the legislature. Now we’ll see about that. Contact: Children Now (510) 763-2444, www.childrennow.org.
