Categorized | Career

For Some Business Grads, It’s Not About Money

Posted on 25 October 2009

Two hours after regular classes one March day, a dozen third-graders are still huddled inside their Washington, D.C., school, poring over “Rosie: A Visiting Dog’s Story.”

A George Washington University student presides over the reading group. Off to one side, an important guest proudly looks on. He is Vincent Pan, executive director in a social-services program he co-founded called Heads Up, which arranged the reading session. If there were a book named “Vincent: A Visiting Dog’s Story,” it might begin by relating this:

Once upon a time, but not too long ago, Mr. Pan was an Ivy League economics major, aspiring to a Wall Street career. But like thousands of other young people these days, he decided instead to start his own business, straight out of college.

Yet starkly unlike most of his peers, Mr. Pan created a nonprofit corporation that, after four years in operation, still pays him an annual salary of less than $30,000 and grants him no stock or options. Heads Up has issued no shares — and never will.

In other words, money isn’t the goal. By mobilizing students from six universities, Heads Up so far has created tutoring programs at six inner-city schools, serving more than 400 young children and teenagers. The current efforts cost about $1.6 million a year, and Mr. Pan oversees nine other people on the full-time staff.

“Our mission is to provide low-income children and families with the learning opportunities they need to succeed, while fostering a new generation of leaders committed to strengthening their communities,” wrote Mr. Pan, now 27 years old, in one grant application last year.

In choosing the nonprofit lane, Mr. Pan is keenly aware that he is swimming outside the mainstream of his generation. After all, so many other young entrepreneurs are trying — and in many cases succeeding — to become fabulously rich by age 30. “It’s kind of sad that there are so few of us young people who are willing to work for a lot less money, for something that has greater social rewards,” he says.

‘I Was Different’

At least three of Mr. Pan’s friends have formed high-tech companies, and he has met dozens of other young entrepreneurs, even attending a meeting at a Georgetown bar of a group of them called the Brat Pack. “It was clear that I was different from them, but I could be the same if I wanted,” he says. “But I want to make them more like me, not become more like them.”

One of his best friends, Michael Weinbach, a 26-year-old M.B.A. candidate at Harvard, has already raised $1 million for an Internet start-up. “If my business plan is successful, I’ll earn in equity several million dollars within a few years,” Mr. Weinbach predicts. He would love to hire Mr. Pan — “If he wants, he can have a job anytime” — but knows that his friend has altruistic priorities. “Vin would almost feel guilty if he were doing something solely for himself,” Mr. Weinbach says. “I’ve seen very few people like that.”

All the same, Mr. Pan, a trim, athletic man with a low-key manner, is an ambitious and skillful entrepreneur. “Tenacity and drive are things he has very much in common with the people who are starting technology-based companies,” says Charles W. Stein, a former technology-company chief who now serves on the boards of five for-profit companies — and Heads Up.

“There’s a lot in common between the corporate invention of those who start nonprofits and the corporate invention of those who do start-ups in the for-profit world,” agrees Harris Wofford, chief executive of the federal Corporation for National Service. The former senator, whose agency spurs a broad range of community-service projects, adds that Mr. Pan “is an extraordinary guy — I’m very impressed. He does all the things any good business entrepreneur would do.”

In fact, not unlike many Internet start-ups, Heads Up readily burns through all the cash it gets and is constantly hungry for more. Nevertheless, Heads Up makes no pretense that it will ever be profitable — not in a monetary sense, anyway.

Even Mr. Pan’s own parents had trouble understanding his career choice, Mr. Pan concedes. “When you combine the high risk with the low earnings potential, you start to raise eyebrows,” he says.

Born in New York City in 1973, Mr. Pan is the son of immigrants from Taiwan. His father, once a busboy in Manhattan’s Chinatown, became a maritime lawyer and piloted the family into the upper-middle class in comfortable Short Hills, N.J. At high school in nearby Millburn, Vincent captained the track team and raised money for class dances. He also excelled as a student, winning admission to Harvard University.

“At Harvard, the current is flowing toward investment banking and consulting,” he says. “If you want to go in another direction, you have to swim pretty hard to get away from it.”

At first, he went with the flow. Planning a Wall Street career, he spent the summer of 1993 as an intern at Paine Webber Group Inc., a New York securities firm, preparing spreadsheets with data on public companies. “It was challenging and exciting,” he says. Yet his career choice fell into doubt. “At the end of the day, I really didn’t think I had contributed anything that made a difference to society,” he says.

Time to Tutor

Back at school, he got greater satisfaction from volunteer work in nearby Boston, in a tutoring program overseen by Phillips Brooks House Association, a public-service arm of Harvard. Two or three times a week, he would ride the bus to the Mission Hill housing project, in the depressed Roxbury neighborhood. There he would meet the clients — young children and teenagers — at a playground, then walk them to a nearby technical school where he helped with arithmetic, grammar and creative writing. When injuries cut into his time at rugby, a favorite pastime, he stepped up the volunteer work.

On successive trips, as the bus passed from Cambridge to Roxbury, he became increasingly upset at the class differences in American society (a socioeconomic ladder many of his entrepreneurial peers now look forward to sitting atop). “If you’re poor in this country, you’re saddled with less-safe neighborhoods, schools that aren’t as effective and streets that aren’t even paved right,” he says.

Resolving to fight poverty, Mr. Pan became the head of the tutoring program. Later, his peers elected him president of Phillips Brooks, an unpaid post whose one-year term caused him to defer graduation for a semester, until early 1996.

After receiving his Harvard diploma, he sought funds to start his own tutoring organization in Washington, D.C. The Stride Rite Foundation provided $15,000. “I wasn’t sure he could do the job for 15 grand, but that’s all he wanted,” says Arnold Hiatt, chairman of the foundation, based in Boston.

Mr. Pan recruited a partner — Darin McKeever, now age 26 and Heads Up’s communication director. Working initially from a small basement apartment near the Capitol’s DuPont Circle neighborhood, the two young men called on public-school officials, colleges seen as potential sources of tutors, and assorted community leaders, including prospective board members for the venture, at first called University Neighborhood Initiative of Washington, D.C.

By the fall of 1996, they had arranged for about 15 volunteers from American University to tutor children at James G. Birney Elementary School, in the southeast portion of the city. But the $15,000 in initial funding was exhausted, as was $10,000 from other sources. The partners were drawing no pay. For pocket money, Mr. McKeever went to work briefly in a record store near his parents‘ home in Westport, Conn. Mr. Pan stayed on the job, mostly seeking financing.

At the beginning of 1997, Mr. Hiatt sent $15,000 more (this time from his personal account), but Mr. Pan and his partner were still hardly flush. “It’s a rite of passage,” Mr. Pan says resignedly. “You have to prove you can make do on next to nothing before you can get any more funding.”

By the end of 1997, Mr. Pan was drawing a modest salary (about $22,000) and had expanded the program to two more public schools, served by tutors from Georgetown University and Howard University. Tapping local foundations, the program also succeeded at raising more money. Then, in a major coup, it won a three-year funding commitment totaling more than $670,000 from the Corporation for National Service’s AmeriCorps program, a sort of Peace Corps for domestic projects.

Mainly, the AmeriCorps money would enable Mr. Pan to buy more books and art supplies, and to use AmeriCorps members as volunteer coordinators and tutors. In exchange for a year of service, members of AmeriCorps receive a small living stipend and help in paying for a college education. The three-year commitment gave Mr. Pan a bit of relief from what had been a constant financial crisis.

“For a start-up, cash flow is everything,” he says. “It does no good to have a budget of $1 million if $800,000 comes in during December.” AmeriCorps provided $190,000 the first year, saving the rest for later.

(Today, Heads Up’s annual budget is about $1 million, mostly raised from foundation grants and individual contributions as well as the AmeriCorps money. The remaining $600,000 to run the tutoring program this year comes from outside sources, such as college work-study programs.)

Mr. Pan’s dream of building a nonprofit enterprise was starting to be realized — not least because he was working about as hard as entrepreneurs ever do in the for-profit world. Extending long workdays into the evening, he continued to make contacts in many of the city’s neighborhoods.

“There was no distinction between work time and non-work time,” he says. “There was just my life.” The pace was problematic at times. “I was dating someone,” recalls Mr. Pan, who is unmarried. “We broke up because I had no time to do anything except work.” By this time, he had a small storefront office — and sometimes he stayed overnight there in a sleeping bag when it seemed like too much trouble to go home.

Early in 1999, Mr. Pan rechristened the organization Heads Up, a snappier name aimed at attracting donors. “It’s a stronger brand identity,” he says. “It improves our visibility.” By last October, when he was part of a small group of young social activists invited to a meeting with President Clinton, Mr. Pan was winning recognition as an effective social reformer. Mr. Pan says the president gave him good advice: “to get across the passion without being sanctimonious.”

He tries to do that. Relentlessly even-tempered, he also tries not to get too upset from day to day about social problems. “If you get too emotional about all the injustices, you can lose your sense of purpose,” he says. “The problem is to channel your energies into something constructive.”

Participants have found the program very constructive so far. “It’s a very effective program,” says Yvonne Morse, the principal at Birney elementary school, which is situated near a big housing project called Barry Farms. The proportion of pupils reading below grade level at Birney fell to 26% last year from 39% the year before, Ms. Morse says. She ascribes the improvement partly to Heads Up, which tutors about 70 pupils in the student body of 579. “It’s unusual to find young people who organize something like this and stick to it,” she adds.

Now big enough to post a full-time staff member at each school in the program, Heads Up has moved its headquarters into 1,700 square feet of commercial space, situated in an unfashionable area about one mile southeast of the Capitol. Mr. Pan dreams of having a much larger space — “a community space where people of different backgrounds come together.”

Across Class Lines

Indeed, much as Inc. founder Jeffrey Bezos always insisted that his Internet start-up wasn’t just about books, Mr. Pan says Heads Up isn’t just about tutoring. By bringing together mostly affluent college students and largely poor community members, Heads Up aims to cut across class lines and catalyze social change in still-unfolding ways.

“I don’t think this would be very interesting for me if I just wanted to create tutoring programs,” he says. “We’re trying to find a way to get people out of poverty.”

Nevertheless, he confesses, “Sometimes I wonder if I might have more of an impact if I went out and made a lot of money and then devoted myself to philanthropic efforts afterward. There are folks my age, left and right — and I’m not that different from them — who are making multiples and multiples of what I need to raise for Heads Up.”

If he wanted to, he could do just that, his friends and associates believe. One pal, John Zoltner, a 32-year-old founder of Transparent Technology Inc., an Internet applications service provider based in Washington, D.C., says Mr. Pan “kind of fits the profile of a tech start-up entrepreneur,” and could easily transfer to the for-profit sector if he wished. “He’s highly skilled, and his future is pretty much wide open.”

But Mr. Pan declares: “You become what you do. It’s dangerous to defer community responsibility. What you do in the present is who you are.”

Besides, he thinks he is essential to his organization’s success, while Internet start-ups and other for-profit ventures don’t really need him. “If I didn’t do this now, I don’t think it would get done,” he says. “The other stuff is going to happen with or without me.”

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