Fernandez, Raul

Biographical Highlights

Raul J. Fernandez is Chairman and CEO for ObjectVideo.  A native Washingtonian and of Cuban family origins, Fernandez holds a bachelor's degree in economics from the University of Maryland (Office of Science and Technology Policy).

Fernandez has over a decade of executive experience in developing and leading technology companies. Fernandez is well known in the technology industry and the Washington , D.C.  area as the founder of Proxicom.  Under his leadership, the company became a top global provider of e-business services for Fortune 500 companies. After taking Proxicom became public in 1999 and growing the business to over $200 million in sales, he sold it to Dimension Data for over $400 million. He has been profiled by The Wall Street Journal, Fortune, Forbes, CNBC, The Industry Standard, The Washington Post, and CNN (ibid.)

In 2001, Fernandez was appointed to the President's Council of Advisors on Science and Technology. He also led the Information Technology Analysis Team for Virginia Gov. Mark Warner's Commission on Efficiency and Effectiveness. He also serves as a special advisor to General Atlantic Partners, a top investment firm, and sits on the boards of Liz Claiborne and Internosis, an award-winning IT consultancy and systems integrator (ibid.)

Along with these accomplishments, Fernandez has done much to effect the world of philanthropy and nonprofits.  In 1999, he helped launch Venture Philanthropy Partners (VPP).  Venture Philanthropy Partners is a philanthropic investment organization striving to improve children’s lives who reside in low-income communities (Venture Philanthropy Partners (1), 2005). 

Venture Philanthropy Partners helps strengthen nonprofit organizations, offering major funding as well as management assistance and other non-financial resources. Also, they bring together others in the field to promote the effectiveness and the flow of capital, talent, and other resources to nonprofit organizations meeting the core needs of children.  Integral to this goal is their ability to inspire philanthropists, corporate and nonprofit leaders, and public policymakers around the issue.  In 2000, VPP incorporated as a nonprofit, and with VPP’s investors, have committed $30 million to VPP’s first fund, the Children’s Learning Fund for the National Capital Region (ibid.). 

Historic Roots

Raul Fernandez grew up in Silver Spring, Maryland, son of a Cuban father and an Ecuadorian mother.  In 1980, Raul was enrolled in St. John’s College High
School, a private Catholic military institution for boys.  The strict demands for discipline shocked young Raul at first, but he quickly adapted (Hispanic Business Magazine 2000).

While still in high school, he attended a Capitol Hill fundraiser for Hispanic Republicans with his father.  One of his father’s friends introduced him to Congressman Kemp’s chief of staff.  The aide mentioned that the Congressman could use a part-time intern who was able to translate Spanish documents.  Young Raul Fernandez got the job. Meanwhile, at home and at school, he spent hours on the laptop computer that his parents had purchased.  The caption under his high school yearbook reads, “Most remembered for being the first to have a computer” (ibid.).

After graduating from St. John’s in 1984, Raul worked for Congressman Kemp part-time while attending the University of Maryland.  On Capitol Hill, he worked on tax legislation and issues involving Central America.  He programmed spreadsheets and developed programs to simulate the impact of various tax plans on different income groups.  Eventually, he helped write speeches for Congressman Kemp (ibid.).

After Congressman Kemp gave up his seat to run for president in 1988, Fernandez landed in the marketing department of Digicon, a Bethesda defense contractor involved in emerging technologies. He worked his way up to run a small Digicon division focused on computer operating systems. In 1991, he left to found Proxicom (Washington Business Journal 2002).

Proxicom's ultimate success was sealed with the signing of two big clients in the mid-'90s: MCI and America Online.  Fernandez met AOL's Ted Leonsis on an airplane on his way back from launching one of the first e-commerce Web sites, for MCI.  The deals led to growth, venture investments, and the company's $58.5 million IPO in 1999. A year later, Proxicom generated more than $200 million in revenue (ibid.).

In late 2000, Proxicom started getting interest from two buyers: Compaq Computer and Dimension Data. A bidding war started and Proxicom agreed to be acquired by Compaq.  However, in the midst of a road show to sell that deal to shareholders and employees, Dimension Data upped its offer 30 percent. Compaq declined to match, and Dimension won (ibid.).

Also in 2000, Fernandez became one of the owners of the NHL's Washington Capitals, the NBA's Washington Wizards, the WNBA's Washington Mystics and the MCI Center (Office of Science and Technology Policy).

In June, 2003, Arlington-based Internosis, a tech consulting shop, named Fernandez its "nonexecutive chairman.”  Fernandez basically served up his take on growing a young tech firm into an industry leader.  Internosis scored major government customers adding the Department of Labor and Defense Department to its customer list (ibid.).

Importance

An Association of Retired Persons survey reveals that Hispanics donate time and money because of a sense of responsibility to their families and their communities and a feeling of satisfaction in helping. In fact, Hispanics devote more time to volunteer work than any other group, averaging 22 hours per month  (Hispanic On Line 2004).

Since more and more Hispanics are staying in touch with world realities and meeting the financial needs of those less fortunate.  Raul Fernandez is a philanthropic leader and free thinker, his actions and their results speaking volumes both inside the Hispanic community and in the Washington, D.C. area (ibid.).   

Because of his high profile as a self-made success in the high tech industry, his ties to the government, his ownership of sports franchises, and his social life in the power corridors of Washington, DC, Fernandez has become a primary example of a person of Hispanic heritage who has “made good” (ibid.). 

Ties to the Philanthropic Sector

Raul Fernandez and his wife, Jean-Marie, founded the Fernandez Foundation.  The organization supports programs to help improve the lives of needy Washington D.C. area kids by providing education, health care and related needs.  Raul also sits on the board of directors at the Children’s National Medical Center, St. John’s College High School (ibid.). 

In another philanthropic endeavor, Raul joined 28 Washington D.C. businesspeople to create a $31 million nonprofit fund to make investments in Washington area organizations.  Consisting of mostly technology executives, the group, formed in 2001, funded projects relating to the learning and development of children (Washington Post 2001).

The founding investors of Reston-based Venture Philanthropy Partners included nine current and former America Online Inc. executives such as AOL Time Warner Chairman Steve Case and Len Leader, who manages the AOL-TW empire's venture investments. They each made contributions ranging from $500,000 to $4 million (ibid.). 

Mario Morino, whose Morino Institute led the fundraising for the project, has committed $4 million to the fund plus $6 million for operating costs. Morino serves on the seven-person board of directors for Venture Philanthropy Partners along with co-founders Mark Warner, Virginia gubernatorial candidate and managing director of Columbia Capital; and AOL International founder Jack Davies (ibid.).   

The creation of Venture Philanthropy Partners (VPP) demonstrated the changing nature of charitable foundations in Washington. Traditionally, such a fund was run by a single company, family or individual, rather than a community of like-minded people. The philosophy of this group differs from mainstream philanthropy as well, taking on attributes of what is known as "venture philanthropy." Borrowing from some of the strategies of business investors, the group considers the money it donates an investment.  While it does not produce financial returns for the partners, it comes coupled with management advice and it conveys introductions to business leaders.  Members of VPP take active roles, including board seats, in the groups that receive capital and expect certain results from the investments (ibid.). 

"It taps into the desire that all of us share to make an impact in philanthropy, but not necessarily in the way it's been done for generations," says Fernandez (ibid.). 

Key Related Ideas

Venture philanthropy refers to the nonprofit sector's application of certain practices used by venture capitalists when investing in new business ideas. The venture philanthropy model applies five key elements: (Peninsula Community Foundation)

  1. Investments in long-term (3-6 year) business plans
  2. A managing partner relationship
  3. An accountability-for-results process
  4. Provision of cash and expertise
  5. An exit strategy

Ethnic philanthropy refers to the characteristics and practices of minority giving.  In general, ethnic philanthropy, which is underestimated because of its diversity, is characterized by (Tracmedia):

  1. People sharing modest or meager wealth with people they know
  2. Communal enterprise in which members of the community take care of one another
  3. Donations of time and money to church and organizations
  4. Linked to family and kinship
    • Religion very important
    • Majority of giving is personal and informal
    • Affluent feel obligation to help others in community achieve success

Personal philanthropy is the idea that philanthropy is a personal responsibility.  Any individual can and should donate time, energy, or money to support the causes and issues that hold personal value for them.  In the United States, nearly 85% of philanthropic giving comes from individuals (World Economic Forum 2001).

Important People Related to the Topic

  • Steve Case (1959-): Case, co-founder of AOL is chairman of The Case Foundation, and is an active investor and philanthropist in Hawaii.  The Case Foundation was founded in 1997 by Steve and Jean Case to reflect their family's heartfelt commitment to addressing complex social challenges. Today, the foundation is pursuing a number of initiatives, but is particularly focused on three strategies including encouraging collaboration, supporting successful leaders and fostering entrepreneurship in the non-profit sector.  Steve Case is also a founding member of Venture Philanthropy Partners (Revolution)
  • Jack Kemp (1935-): Kemp represented the Buffalo area and Western New York for nine terms in the United States House of Representatives from 1971-1989. He served for seven years in the Republican Leadership as Chairman of the House Republican Leadership Conference.  During this time, Raul Fernandez served as Mr. Kemp’s intern.  Mr. Kemp currently serves on the Board of Directors of Empower America, a public policy and advocacy organization he co-founded in 1993 with William Bennet, Jeane Kirkpatrick and Vin Weber.  Kemp also serves as a Distinguished Fellow at the Heritage Foundation, a Visiting Fellow at the Hoover Institution, and on the Board of Directors of Habitat for Humanity, the Opportunities Industrialization Centers, and was most recently elected to the Board of the Prestigious Howard University (Public Broadcasting System 2005).
  • Len Leader:  Leader became President of AOL Ventures in February 1998, after serving nine years as AOL’s Senior Vice President, Chief Financial Officer and Treasurer.  From 1984 to 1988, Leader served as the Chief Financial Officer of Morino, Inc.   He helped the company grow to become a leading independent systems software supplier and oversaw the company’s initial public offering in 1986.  Leader is also a founding member of Venture Philanthropy Partners (Time Warner Ventures).
  • Ted Leonsis (1957-):  Leonsis, Vice Chairman of America Online, Inc., leads the company's Audience Business, which seeks to grow an Internet audience via programming and products, and sell to this audience through advertising, search, and commerce. Leonsis is a pioneer of the Internet and new media, a sports team owner, and an innovator in the world of philanthropy.  He is also a founding member of Venture Philanthropy Partners (America On Line 2005).
  • Steve Kirsch (1957-): Kirsch is founder and chairman of Propel Software, a Silicon Valley start-up. He is, however, perhaps best known as the founder and chairman of Infoseek Corporation, an Internet navigation service that was acquired by Walt Disney Company in November 1999.  In addition to serving on several community boards, including The Computer History Museum, Steve is a member of the Advisory Board of the Ploughshares Fund. Ploughshares, a Venture Philanthropy Partners Foundation grant recipient, focuses its activities on nuclear disarmament and non-proliferation (Kirsch Foundation).
  • Mario Morino:  Morino is chairman of Venture Philanthropy Partners and chairman of the Morino Institute.  Before retiring from private industry in 1992, Mario enjoyed a 30-year career in information technology, where he co-founded and helped build a corporation that became a market leader and one of the industry’s then 10 largest firms in software and services. Since 1992 Mario has focused his efforts on philanthropic innovation to benefit children and families of working poor or poverty backgrounds  (Venture Philanthropy Partners (2), 2005). 

Related Nonprofit Organizations

  • Center for Venture Philanthropy is an initiative of the Peninsula Community Foundation in Silicon Valley, California and a "forum for community donors to collaborate and catalyze for social change"  (http://www.pcf.org/venture_philanthropy).
  • Entrepreneurs Foundation strives to change the culture of the entrepreneurial sector in the Silicon Valley/Bay Area, incorporating community involvement as a major focus of their company.  They make the community stronger by applying venture capital principles to scale-up successful non-profit organizations (http://www.efbayarea.org).
  • Kirsch Foundation was established in 1999 by Steven and Michelle Kirsch to invest in causes where high-impact activities can result in a safer and healthier world.  The Foundation engages both in grantmaking and advocacy with extensive lobbying and advocacy activities that support public policy relating to issues in which they are passionate  (http://www.kirschfoundation.org).
  • Nonprofit Enterprise and Self-sustainability Team, fosters the use of venture philanthropy approaches in the emerging economies of Central Europe and Latin America (http://forum.nesst.org).
  • Robin Hood Foundation strives to end poverty in New York City with a straightforward approach that includes investing in good organizations.  Their philosophy involves giving these organizations management support, holding them accountable, learning from their results, and duplicating their success (http://www.robinhood.org).
  • Social Venture Partners International (SVPI) is a network of more than 23 regional giving organizations. SVPI provides a philanthropic outlet to members through its work with many nonprofit organizations and its seminars and workshops (http://www.svpi.org/).

Related Web Sites

Charity Village Web site, at http://www.charityvillage.com, is Canada's super site for the nonprofit sector with 3,000 pages of news, jobs, information and resources for executives, staffers, donors, and volunteers.  It contains an exhaustive list of venture philanthropy organizations.

Mario Institute Web site, at http://www.morino.org, offers speeches and publications on such issues as Stimulating New Economy Entrepreneurship, Advancing a More Effective Philanthropy, and Closing Social Divides.

Venture Philanthropy Partners (VPP), is a philanthropic investment organization striving to improve children’s lives who reside in low-income communities.  They help strengthen nonprofit organizations, offering major funding as well as management assistance and other non-financial resources. Also, they bring together others in the field to promote the effectiveness and the flow of capital, talent, and other resources to nonprofit organizations meeting the core needs of children.  Integral to this goal is their ability to inspire philanthropists, corporate and nonprofit leaders, and public policymakers around the issue (http://venturephilanthropypartners.org).

Bibliography and Internet Sources

America On Line.  Ted Leonsis.  [2005; Accessed 8 July 2005]. 
http://www.corp.aol.com/whoweare/whoswho/leonsis.shtml.

Hispanic Business Magazine. Former Congressional Aide Raul Fernandez Makes Good.  [2000; Accessed 6 July 2005].  http://www.hispanicbusiness.com/news/newsbyid.asp?
id=2079&cat=Magazine&more=/magazine
.

Hispanic On Line.  Spreading the Wealth.  [2004; Accessed 7 July 2005]. 
http://www.hispaniconline.com/trends/2004/sep/success/weath.html .

Kirsch Foundation.  About the Founders.  Accessed 8 July 2005. 
http://www.kirschfoundation.org/who/about.html.

Revolution.  Steve Case.  Accessed 8 July 2005.  http://revolution.com.

Office of Science and Technology Policy.  The President's Council of Advisors on Science & Technology.  Accessed 28 November 2005.  http://www.ostp.gov/PCAST/pcast-members2.html.

Peninsula Community Foundation.  Venture Philanthropy.  Accessed 6
July 2005.  http://www.pcf.org/venture_philanthropy/definition.html.

Public Broadcasting System.  Jack Kemp.  2005.  Accessed 8 July 2005. 
http://www.pbs.org/newshour/bb/bio/kemp_bio.html.

Tracmedia.  Ethnic Philanthropy Project.  Accessed 7 July 2005. 
http://www.tracmedia.com/EthnicPhilanthropyProject.aspx.

Time Warner Ventures.  Len Leader.  Accessed 8 July 2005. 
http://www.timewarner.com/corp/businesses/detail/tw_investments/index.html.

Venture Philanthropy Partners (1).  About Us.  [2005; Accessed 28 November 2005]. 

Venture Philanthropy Partners (2).  Mario Morino.  [2005; Accessed 8 July 2005]. 
http://www.vppartners.org/about/people/tbios/morino.html.

Washington Business Journal.  Perfect timing: Raul Fernandez helps launch a tech capital and sells in the nick of time.  [2002; Accessed 7 July 2005].  http://www.bizjournals.com/washington/
stories/2002/10/28/story8.html
.

Washington Post.  Partners with a Strings Theory of Giving.  [2001; Accessed 7 July 2005].  http://www.washingtonpost.com/ac2/wp-dyn/
A43416-2001Jan24?language=printer
.

World Economic Forum.  Personal Philanthropy.  [2001; Accessed 7 June 2005]. No longer available online.

This paper was developed by a student taking a Philanthropic Studies course taught at Ferris State University - Grand Rapids Campus. It is offered by Learning To Give and Ferris State University - Grand Rapids Campus.