October 23rd, 2014
Giving & Investing in Your Own Backyard
“Are you kiddin me? You haven’t been to jail and none of your family’s on crack?” Damien, a mouthy, bright fourteen year old wanted to know who I was, where I came from, and why I was there. It was tougher to prove myself to street kids in San Francisco than it had been at Stanford.
I’d grown up how I thought every kid did – riding my dirt bike, going to parochial school and wrestling for the team in the suburbs outside Seattle. After I graduated from college, I moved home, filling up my week putting together small investment deals for the family trust between jobs coaching lacrosse and overseeing afterschool programs at the local private school. One evening, I went to a dance and introduced myself to an attractive young woman. It turned out she already knew who I was; she was a friend of my sister’s. That’s when I realized I had to get out of Seattle; it was way too small for me.
I didn’t want anything to do with the family timber company and I didn’t want anything to do with philanthropy. I wanted to be a teacher. I moved to San Francisco with one of my college buddies and found work at a youth community center in the middle of a housing project in the Mission District.
I wanted to fit in, to have the kids respect me, so I “dressed down” in grey sweatshirts and baggie jeans so I didn't look like a preppy alien. I was shocked at what was considered normal in the projects. It blew my mind how this community was incredibly wonderful and tragic at the same time. It was dilapidated, noisy and dingy, yet there was an undeniable sense of pride and vitality. People knew what everyone was up to because they were paying attention and for the most part they looked out for each other, especially each other’s children. I was most appalled at the inequity of it all, the escalating property values in San Francisco contrasted with the living conditions in the projects and the inefficiencies and blatant corruption in the running of these communities.
While living in San Francisco I met and married Daria and we decided to move to NYC, where she pursued her teaching career and I went back to school for an MBA and began a career in banking. But after five years in banking, where I mostly concentrated on North American corporate credit risk management and co-managed a $500 million bond portfolio and a $300 million credit derivative portfolio, I was increasingly drawn back to community development work.
I realized that community development organizations could provide real opportunity for self-sufficiency with their focus on affordable housing, job training and capital for small businesses. I was intrigued by questions like what makes a neighborhood thrive? How do you help people feel more connected to where they live, enhance the sense of community and develop a healthier sense of ownership and create a space to call home - even in a public housing project? I wanted to figure out how I use my experience and capital to create and encourage the development of these neighborhoods.
This was the inspiration for starting The Contact Fund, which is dedicated to New York City community development. Using my own capital as equity and borrowing against it from friends and family, I employed traditional credit analysis methods to lend to NYC community development organizations. The concept is very straightforward: private investors invest their capital in local New York City neighborhoods and receive a financial return while fostering a community of private investors who share similar values.
I’m pleased to say that through these investors in the Contact Fund, we’ve been able to make 24 loans worth $6.5 million and have had no losses to date. We’ve been able to invest in nonprofits that offer support for young people aging out of foster care; programs that work with homeless and formerly homeless people suffering from mental illness, alcoholism, and substance abuse; and a school for autistic children. We’ve also provided funding for a multitude of affordable housing programs and helped fund micro-loan programs serving entrepreneurs throughout New York City with an emphasis on immigrants.
Beyond the Contact Fund, Daria and I also continue to explore our philanthropic priorities. We are deeply committed to our children’s school – Daria taught there, I’m on the board, and we’re donors. We are also proud of starting a scholarship program at Stanford for low-income female students from the East Bay and I’m on the board and a big supporter of the North Star Fund, which supports grass roots organizations and community organizing in New York City.
One of our largest contributions was purely relationship driven. When one of my closest friends Steven was diagnosed with Lou Gehrig’s disease 15 years ago, one of his brothers, an amazing MIT engineer, put his entire life on hold to devote his efforts to finding a cure for this awful disease by lab testing pre-approved FDA drugs for ALS. Although progress wasn’t fast enough to save Steven’s life, I’m proud to have helped seed this research that continues today in his honor.
There are many other organizations we’re proud to be able to support but honestly, the one that excites us the most is DonorsChoose, where a small donation in support of a classroom project can make such a difference to a teacher and their students in public schools across the country. When Daria gets on that website she’s on fire; I don’t know if you’ve ever gotten one of the thank you packets from the teacher and the students, but when it arrives in the mail you just feel like pumping your fist in the air for the entire day!
It’s really about finding your passion and community. I love the ability to blend everything together: philanthropy, business, and finance to invest where I live.