2018 Annual Report
OUR MISSION
MISSION The mission of the Volcker Alliance is to advance effective management of government to achieve results that matter to citizens.
BELIEFS The Volcker Alliance was launched in 2013 by former Federal Reserve Board Chairman Paul A. Volcker, who served in the federal government for almost thirty years. Chairman Volcker is known for his commitment to effective government that works for the public good. The Alliance’s work is inspired by his legacy of public service and grounded in a set of beliefs about what constitutes effective government:
• Government should be responsive to its citizens, transparent in its operations, accountable for delivering on its promises, and visibly held to the standard of robust and unbiased measures.
VISION We envision a public sector workforce with the experience, preparation, and commitment to ensure that government is accountable and delivers with excellence.
• Public service is a high calling, and it is critical to engage our most thoughtful and accomplished citizens in service to the public good.
• G overnment
functions best when its system of civil service is independent, stable, and staffed by public servants who are experienced and expert in their domains.
• Our public workforce and government institutions must be dynamic:
designed to encourage innovation, leverage technology, and adapt to the needs of a changing nation in an evolving global context.
• The performance of our government institutions depends critically
on the training and education of talented public servants, and this responsibility is shared by our government, by our institutions of higher education, and by leading institutions in every sector of society.
• Government must be a responsible steward of financial resources—
diligent in avoiding waste, assiduous in seeking evidence to assess the effectiveness of its initiatives, and proactive in helping citizens understand the long-term sustainability of its operations.
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REFLECTIONS FROM PAUL A. VOLCKER IN MY OWN LONG LIFE, the opportunities to work toward more effective governmental policies and practices have been key elements in my career—sometimes frustrating, but incredibly fulfilling. Now it is gratifying to see a new generation, faced with even larger challenges, passionate about public service. That passion is ingrown in the small staff of the Volcker Alliance, who are working in one way or another to support more efficient and accountable public service. With the Government-to-University Initiative, we are engaging universities in new ways to develop relevant analysis for solving problems. Importantly, our government leaders and institutions of higher education are beginning to pay attention to the work of the Alliance. Many are working closely at our side to pave the road ahead for our country. In all, I am excited about the direction in which the Volcker Alliance is moving and proud of its growing contribution and influence. We will be keeping at it!
Paul A. Volcker CHAIRMAN AND FOUNDER
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LETTER FROM THE PRESIDENT ON DECEMBER 22, 2018, the United States entered the longest government shutdown in its history. The shutdown resulted in the prolonged suspension of thousands of essential daily tasks that public servants carry out for the American people. As air traffic slowed and national parks closed, perhaps a silver lining is that Americans were reminded that government’s responsibilities are numerous and vital, touching many aspects of our lives. The shutdown dramatized the need to elevate and acknowledge the dedicated citizens who pursue lives of public service and come to work every day with the imperative to contribute to the public good. The Volcker Alliance envisions a public sector workforce with the experience, preparation, and commitment to ensure a government that is accountable and delivers with excellence. In 2018 we worked diligently toward that end. WE DEVELOPED BOLD NEW INITIATIVES. The Government-to-University Initiative (G2U) is a national effort
that is building sustainable regional networks that connect governments’ human capital and research needs with universities’ talent and capacity. WE RELEASED INSIGHTFUL PUBLICATIONS. Preparing Tomorrow’s Public Service identified the essential skills
and competencies required of an effective managerial public servant in the twenty-first century based on input from more than 1,000 government practitioners and educators. WE BROUGHT CHANGEMAKERS TOGETHER. In connection with the release of Truth and Integrity in State
Budgeting: Preventing the Next Fiscal Crisis —the latest installment of our multiyear study of state and local budgeting, financial reporting, and fiscal practices—we hosted a conference in partnership with the Federal Reserve Bank of Chicago to examine ways that state governments can position themselves to avert budgetary crises. WE PROVIDED NEEDED THOUGHT LEADERSHIP. We continued our campaign for smart financial regulation,
speaking out in influential outlets such as the Wall Street Journal about the risks posed by the deregulatory agenda currently being advanced in Washington.
To help us accomplish all of this, we added impressive talent to our team. Dustin Brown, deputy assistant director for management at the US Office of Management and Budget, spent a productive and inspiring six-month sabbatical at the Alliance. He taught us a great deal about the most vexing challenges facing the federal workforce and helped us develop innovative strategies for impact. He remains the Alliance’s official liaison with the federal government. 4
In September, Sara Mogulescu joined the Alliance as its first executive vice president. She oversees our growing programmatic portfolio and helps me lead our exceptional team day to day. We are also building a best-in-class communications team. Neilia Stephens came to the Alliance as the director of communications in July. Under her leadership, it had more press coverage in 2018 than ever before, including in media outlets such as Forbes, NPR, the New York Times, the Wall Street Journal, and the Washington Post. I am exceedingly proud of all we have accomplished, and I stand privileged and energized to steer the organization forward. We are a small group of people dedicated to our democracy and to effective government, and we cannot accomplish our mission alone. We all must do our part to give our public servants respect and fair compensation, remove the bureaucratic barriers that prevent government from hiring the best and the brightest talent, and, with intention, encourage and prepare the next generation of public servants to step up to the plate.
Thomas W. Ross PRESIDENT
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GOVERNMENT-TO-UNIVERSITY INITIATIVE (G2U) THE GOVERNMENT-TO-UNIVERSITY INITIATIVE (G2U) is premised on the hypothesis that structured, intentional partnerships between government practitioners and universities can provide a catalytic response to high-need areas for government: access to top talent; workforce preparedness; and support for applied research, predictive analytics, and program evaluation. To “pressure test” this concept, the Volcker Alliance convened exploratory design sessions in partnership with universities in four cities around the country. Alliance staff worked closely with university hosts and Federal Executive Board representatives at each site to engage a diverse range of participants who could speak to critical issues.
Dustin Brown, the deputy assistant director for management at the US Office of Management and Budget, joined the Volcker Alliance as a senior fellow to help design the G2U Initiative.
The response was over whelming. The 200-plus participants included leaders from all levels of government; senior-level university professionals from undergraduate, public affairs, business, health, and engineering schools; and representatives of civic organizations. This exploratory phase of the G2U Initiative confirmed that there is an immense desire and need to build sustainable partnerships between government and universities. Such collaborations are
“There is power in the simple idea of bringing together a diverse set of interests on both the G side and the U side in a sustained relationship.” —DAVID WARM Executive Director, Mid-America Regional Council
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“One of the biggest insights we took away from the exploratory phase of G2U is that government and university practitioners found it extremely valuable to be together in the same room. Period.” —SARA MOGULESCU Executive Vice President, The Volcker Alliance
G2U EXPLORATORY PHASE PARTNERS
FEDE R A
uniquely positioned to cultivate a vital talent pipeline for the public sector workforce and to ensure that answers to government’s toppriority research questions are pursued and delivered. To harness the momentum that came out of the G2U exploratory phase, the Volcker Alliance is launching a cohort of three to five G2U Regional Councils in 2019 and 2020.
PARTICIPANTS IN THE G2U EXPLORATORY PHASE DESIGN SESSIONS • University professors • Career service leaders • Deans • Students • Federal Executive Board directors • City managers
• Federal officials • State officials • Local officials • County leaders • Public affairs professors • Business professors • Civic organizations
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TRUTH AND INTEGRITY IN GOVERNMENT FINANCE
“Our Truth and Integrity Initiative shows the importance of clear and comprehensible budgets to inform citizens, promote responsible policymaking, and improve fiscal stability.” —PAUL A. VOLCKER
THE TRUTH AND INTEGRITY in Government Finance Initiative is a multiyear study of state and local budgeting, financial reporting, and fiscal practices. The Truth and Integrity team has traveled across the country to investigate states’ management, budgeting, and transparency practices; their challenges and unique fiscal landscapes; and their financing of public assets. In 2018, the Truth and Integrity in Government Finance Initiative
• Published the comprehensive report Truth and Integrity in State Budgeting: Preventing the Next Fiscal Crisis.
• Conducted a webinar, attended by more than 130 registrants, unveiling the report and its key findings.
• Released its first-ever set of fifty exclusive state budget report cards, for fiscal 2015–17.
• Launched an online interactive Data Lab, with nearly 4,000 data points aggregating three years of performance information on all fifty states.
• Hosted a conference in partnership with the Federal Reserve Bank of
Chicago, “Preventing the Next State Budget Crisis: Improving Budget Transparency to Bolster Fiscal Sustainability,” aimed at identifying
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tools and methods that state and local governments can use to improve budgeting outcomes. The initiative is catalyzing legislative change in statehouses across the country:
• UTAH The state’s House and Senate unanimously passed House Bill
452 to institute multiyear estimates for state revenues and expenses as advocated by the Volcker Alliance. In floor speeches, House Majority Leader Brad R. Wilson and Senator Kevin T. Van Tassell credited the Alliance with providing the impetus for the bill.
• PENNSYLVANIA State Representative Seth Grove introduced a bill
to create a joint committee on revenue forecasting based on the Truth and Integrity findings and recommendations.
• VERMONT Following the testimony of Volcker Alliance Senior Vice
President William Glasgall to its Senate Appropriations Committee, the state passed a budget measure that included a substantial increase in appropriations to the rainy day fund and other fiscal reserves, as well as an increase in its share of pension funding contributions.
PARTNERS • City University of New York • Florida International University • Georgia State University • University of California, Berkeley • University of Kentucky • University of Illinois at Chicago • University of Illinois Springfield • University of Utah
• N EW JERSEY Glasgall
testified to the state Senate Budget and Appropriations Committee regarding a proposed constitutional amendment to change the state’s revenue forecasting model. The amendment is now being processed by the senate.
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PUBLIC SERVICE EXCELLENCE THE FUTURE OF PUBLIC SERVICE In May, the Volcker Alliance released Preparing Tomorrow’s Public Service , a report exploring how government’s managerial capacity can keep pace with the scale and complexity of its responsibilities. Based on input from 1,000 government practitioners and educators, Preparing Tomorrow’s Public Service identifies the essential skills and competencies required of an effective public servant and generates ideas for educational innovations that can support future public managers in attaining those skills.
CIVIL SERVICE REFORM In connection with the fortieth anniversary of the 1978 Civil Service Reform Act, the Alliance collaborated with the Partnership for Public Service, the Senior Executive Service, Route Fifty, and other leading organizations to examine human capital and workforce issues that government leaders face, improve federal hiring practices, promote civil service reform, and support the future of public service. In part as a result of this collective support for reform, President Donald Trump signed into law the John S. McCain National Defense Authorization Act for Fiscal Year 2019, which includes improvements to federal employee hiring practices endorsed by the Volcker Alliance and Partnership for Public Service.
Volcker Alliance Project Manager Peter Morrissey and Associate Director Maggie Mello lead a discussion on public service at Carnegie Mellon’s Heinz College of Information Systems and Public Policy.
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MITIGATING SYSTEMIC RISKS IN THE FINANCIAL MARKETS MUCH OF THE VOLCKER ALLIANCE’S efforts in financial regulation focused on countering deregulatory efforts in Washington. On the legislative front, Chairman Volcker and Volcker Alliance board members Sheila Bair and Antonio Weiss submitted separate letters to Congress expressing concern about key provisions of the Economic Growth, Regulatory Relief, and Consumer Protection Act, a bill that President Donald Trump signed in May. Their comments centered on ensuring the resilience of large banks. The Alliance concentrated on preserving the Volcker Rule, a centerpiece of the Dodd-Frank Act that prohibits banks from speculating with depositor funds or investing in hedge funds and private equity funds. Gaurav Vasisht, Volcker Alliance senior vice president and director of financial regulation initiatives, and board member Sheila Bair submitted comments to the Federal Reserve System’s board of governors and other regulatory agencies opposing proposed changes to the Volcker Rule. They also shared their expertise at conferences and in a series of opinion pieces on the need to preserve the postcrisis reform framework and to ensure transparency in the rulemaking process.
Gaurav Vasisht, Volcker Alliance senior vice president and director of financial regulation initaitives, participated in a panel at the Georgetown University Law Center conference “Ten Years After the Financial Crisis: Closing Loopholes, Avoiding Blindspots, and Finding Economic Justice.”
Sheila Bair, Volcker Alliance board member, and Gaurav Vasisht, senior vice president and director of financial regulation initiatives, coauthored an article in the Wall Street Journal on the proposed “simplificiation” of the Volcker Rule.
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PAUL A. VOLCKER RELEASES MEMOIR, KEEPING AT IT ON OCTOBER 30, Paul A. Volcker released his memoir, Keeping At It: The Quest for Sound Money and Good Government. Coauthored by Christine Harper, editor of Bloomberg Markets, the book provides a time line of Chairman Volcker’s life in public service. Chairman Volcker’s memoir highlights his hopes and concerns for the future of government in the United States, international monetary policy, democracy, and global cooperation. By the end of this memoir, readers have a clear picture of the inspiring man Chairman Volcker is: an extraordinarily skilled economist; a proud, loving husband and father; an ardent fisherman; a lifelong Dodgers fan; a dedicated patriot; and a courageous public servant. The book also illustrates Chairman Volcker’s main reason for establishing the Volcker Alliance: to restore faith in government and inspire citizens to reimagine how it should respond to the needs of the twenty-first century.
“I have come to understand something broader and more important: the need to restore trust in the full range of our governmental processes. My hope is that the Volcker Alliance can play a part. It will not be easy.” —PAUL A. VOLCKER, Keeping At It
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OTHER COLLABORATIONS THE GOVERNMENT-INDUSTRIAL COMPLEX: THE TRUE SIZE OF THE FEDERAL GOVERNMENT, 1984–2018 By Paul C. Light Supported by the Volcker Alliance, Paul C. Light released his latest book, which delivers a new analysis and estimates the current size of the government-industrial complex since 1984. Light observes that the US government has greatly increased its use of contract and grant employees while the number of actual federal employees has remained steady, and questions how these changes have affected performance and influence within government.
NO TIME TO WAIT, PART 2: BUILDING A PUBLIC SERVICE FOR THE 21ST CENTURY By the National Academy of Public Administration On September 25, 2018, a panel of the National Academy of Public Administration released a white paper on the future of federal service. Sponsored by the Volcker Alliance and the Samuel L. Freeman Charitable Trust, No Time to Wait, Part 2 provides a concrete plan of legislative and administrative action to update archaic civil service systems and better enable federal agencies to deliver on their missions and serve the public.
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BOARD OF DIRECTORS, ADVISERS, AND FELLOWS BOARD OF DIRECTORS Paul A. Volcker CHAIRMAN
Thomas W. Ross PRESIDENT William Bradley VICE CHAIRMAN Anthony J. Dowd TREASURER Sheila Bair Charles Bowsher Thomas M. Davis William H. Donaldson Anthony Foxx
Shirley Clarke Franklin Francis Fukuyama Stephanie Miner Norman J. Ornstein Richard Ravitch William Rhodes Antonio Weiss
ADVISERS AND FELLOWS Katherine Barrett and Richard Greene SPECIAL PROJECT CONSULTANTS Dustin Brown OFFICIAL LIAISON OF THE FEDERAL GOVERNMENT TO THE VOLCKER ALLIANCE Donald F. Kettl NONRESIDENT SENIOR FELLOW Paul C. Light NONRESIDENT SENIOR FELLOW Shelly H. Metzenbaum NONRESIDENT SENIOR FELLOW*
*Term since ended.
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REMEMBERING VOLCKER ALLIANCE BOARD MEMBERS TONY WALTON AND ALICE RIVLIN TONY WALTON died on January 18, 2019, at the age of 76. Walton was an early champion of the Alliance’s mission, the inaugural leader of its Investment Committee, and a loyal friend to Chairman Paul Volcker. Walton had a distinguished international banking career, most recently serving as vice chairman of the Americas for Standard Chartered Bank. He also held leadership roles in numerous nonprofit organizations and was an avid photographer. “Tony Walton was an active member of the Volcker Alliance board, but more importantly he was a dear friend and will be greatly missed,” Mr. Volcker said. ALICE RIVLIN, a founding board member of the Volcker Alliance, died on May 14, 2019, at the age of 88. Rivlin was the first female director of the Office of Management and Budget and served as vice chairwoman of the Board of Governors of the Federal Reserve System. Later, Rivlin was the founding director of the Congressional Budget Office and a member of President Barack Obama’s National Commission of Fiscal Responsibility and Reform panel. “Alice Rivlin—I know of no man or woman who has more exemplified dedication to the public interest over a long career,” Mr. Volcker said. “As our professional paths crossed, we became good friends. It was to her that I turned in building the Volcker Alliance with the mission of restoring confidence and building support for effective and efficient administration of our governmental institutions. Alice may no longer be with us physically, but her presence remains strongly with us in the never-ending challenge of building a strong and democratic government.”
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FINANCIALS Statements of Financial Position
Statements of Activities
Years ended December 31
Years ended December 31 2018
2017
ASSETS Cash and cash equivalents
$105,779
$10,754,929
$15,342,824
$0
$325,000
Accounts receivable
$27,790
$0
Prepaid expenses
$25,627
$29,194
Security deposits
$70,327
$70,327
Premises and equipment, net
$22,229
$33,615
$12,626,480
$15,906,739
Grants and contributions receivable
Total assets LIABILITIES Accounts payable and accrued expenses
$192,208
$161,564
Total liabilities
$192,208
$161,564
NET ASSETS Unrestricted net assets
$11,431,272
$15,445,175
Temporarily restricted net assets
$1,000,000
$300,000
Total net assets
$12,431,272
$15,745,175
$12,626,480
$15,906,739
Total liabilities and net assets
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2017
$1,886,210
$1,044,491
$28,798
$436
Investment return, net
($492,281)
$1,874,604
Total revenues
$1,422,727
$2,919,531
$821,427
$1,254,648
$261,118
$415,969
Truth and Integrity in Govt. Finance
$1,556,842
$1,982,492
Other program activities
$1,013,493
$432,823
$3,652,880
$4,085,932
Management and general
$811,824
$1,170,612
Fundraising
$271,926
$162,208
Total supporting services
$1,083,750
$1,332,820
Total expenses
$4,736,630
$5,418,752
REVENUES $1,725,578
Investments
2018
Grants and contributions Other income
OPERATING EXPENSES PROGRAM SERVICES Public Service Excellence Financial Regulation
Total program services
Change in net assets
($3,313,903) ($2,499,221)
Net assets, beginning of year
$15,745,175
$18,244,396
Net assets, end of year
$12,431,272
$15,745,175
OUR SUPPORTERS WE GRATEFULLY ACKNOWLEDGE the following foundations and individuals, whose generosity and commitment to our mission made it possible to launch the Volcker Alliance in 2013 and to advance effective management of government to achieve results that matter to citizens.* FOUNDER
Paul A. Volcker SUPPORTERS AND CONTRIBUTORS
Laura and John Arnold Foundation
Francis Fukuyama and Laura Holmgren
Sheila C. Bair and Scott P. Cooper
Gisela R. Gall
Cadena Bedney
Healey Family Foundation
Mr. and Mrs. Robert R. Bench
Henry and Elaine Kaufman Foundation
Charles A. Bowsher
Thomas G. Labrecque Jr.
William Bradley
Cheryl and Glen Lewy
Carnegie Corporation of New York
Lincoln Institute of Land Policy
The Challenger Foundation Ray and Barbara Dalio Mark H. Dalzell William H. Donaldson Anthony J. Dowd R. Anthony Elson The Lee and Juliet Folger Fund Shirley Clarke Franklin
Thomas Lyon The Mallinckrodt Foundation Lewis A. Miller Stephanie Miner The New York Community Trust– Lise Strickler and Mark Gallogly Charitable Fund Norman Ornstein Tan Soo Pang Peter G. Peterson Foundation
Pew Charitable Trusts Richard Ravitch Foundation George T. Reichman William Rhodes Robertson Foundation for Government Thomas W. Ross The Sedoric Family Thomas Seidenstein Dan Simpson Kurt Stout Nobu Su Richard Syron Mr. and Mrs. Edwin M. Truman Antonio and Susannah Weiss Marshall W. and Ingrid B. Whigham Lawrence and Carol Zicklin
*This report reflects support received through December 31, 2018
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VOLCKER ALLIANCE STAFF
Thomas W. Ross PRESIDENT
Melissa Austin
Yesenia Martinez
Peter Morrissey
Emily S. Bolton
Maureen C. McCarthy
Neilia Stephens
Maya Corrin*
Maggie Mello
Gaurav Vasisht
William Glasgall
Sara Mogulescu
Christopher Reed*
Naomi Major
Sarah Morningred*
Noah A. Winn-Ritzenberg
Robert Chislett, Elizabeth Donnelly, Kaeleigh Forsyth, Melanie Martha, Henry Owens, and Amy Smitherman left the organization prior to the publication of this report. Michele Arboit, copy editor. Photos: Ralph Alswang (page 15); Albert Cheung (pages 3, 5, 18); Michelle Kanaar, Carnegie Mellon University’s Heinz College of Information Systems and Public Policy (pages 6, 10); Georgetown University Law Center (page 11).
*Joined the Volcker Alliance in 2019.
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FEATURED MEDIA COVERAGE
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