June 14, 2006

Dear VANPO voting member:

Today the VANPO Board of Directors made the difficult decision to discontinue the operations of VANPO, effective immediately, and sell its business related assets to the Vermont Community Foundation (VCF).

We realize that this is an abrupt move. Our previous correspondence to you had indicated that we would continue to operate in a reduced manner throughout the remainder of 2006 in order to engage in a business planning process intended to turn the revenue model around. The financial situation, however, became increasingly dire following that decision and closing is the most appropriate action at this time. The sale of VANPO's assets will allow the organization to retire all outstanding debt.

All of you who have read our annual reports know that VANPO faced financial challenges each year, yet always managed to operate in the black by combining fees for services, membership dues and contracts and grants. Earlier this year there was no clear indication that 2006 would be any different. The board had approved a break-even budget which was contingent upon VANPO receiving approximately one-third of its income from foundation grants. Executive Director Jane Van Buren, was developing grant proposals totaling approximately $100,000. In January we received one grant for $25,000 and were optimistic that the other requests would be funded as they had been in previous years. In April four rejection letters arrived, including one grant that was intended to leverage additional revenue.

These events prompted us to pursue plans for alternative funding strategies in an effort to maintain our operation. But as we progressed, it became clear that remaining in operation simply increased the likelihood of accruing significant debt. VANPO's other income sources were not enough to make up for the loss of grant support. We had to take immediate action, which left little time for communicating the rapidly deteriorating situation. In many ways, it was a "perfect storm" hitting VANPO, with unavoidable consequences. We regret that some of you may have heard this news in the media before we had a chance to let you know.

It will take some time and distance to gain full insight into all that has transpired in the last two months, yet we are certain that what we learn will be of value to other small nonprofits who struggle with financial sustainability. We hope the corporate dissolution will not eclipse what VANPO has accomplished since its inception in 1998. In the last several weeks we have heard from many of you about how much you value the products and services of VANPO. We believe that the need for these services will continue in Vermont.

The VCF will host an initial conversation in July about how to continue to provide Vermont nonprofits with capacity-building services. In the coming months, the VCF will create opportunities for input and discussion with VANPO members and other nonprofits about the future of this work.

We are sure that many of you will have questions and have attached a Q&A to address those that we've anticipated. Thank you for supporting, and being a part of such fine work and please do not hesitate to contact any one of us with any further questions and concerns.

Sincerely,

VANPO Board of Directors
Barbara E. Wagner, President
Will Belongia
Hal Cohen
Susan Gordon
Michael Levine
Beth Sachs

VANPO Q&A

Q. What will happen if the membership approves dissolving the corporate structure of VANPO?

A. Our hope, of course, is that the products and services developed by VANPO will come back to life in the future housed with a different or new organization. The past 8 years have taught us that the business model on which VANPO was based is not sustainable. The dissolution of VANPO will give interested parties a fresh start to rethink how to organize the delivery of needed services. As detailed below, the VCF will facilitate that work.

Q. Will membership dues be refunded?

A. Unfortunately we are not able to refund all membership dues. We have been able to budget for a few exceptions. If you joined VANPO as a new member after April 1, 2006 or renewed your membership after May 1, 2006, please let us know by June 30 if you would like your dues refunded. All of our members were essential partners in VANPO's mission. We hope the services VANPO offered were a benefit to you and your organization.

Q: If I get my major medical insurance through Vermont Nonprofit Insurance Trust (VNIT), will it continue?

A: Yes, if you are enrolled in a health care program, such as Blue Cross/Blue Shield through VNIT you will not experience any interruption in benefit. Your membership in VNIT is completely independent of VANPO, and your major medical will continue without change. If you have questions please contact John Gutman at www.vnit.us.

Q: Are other member benefits and discounts discontinued?

A: Yes, unfortunately there are no funds to support current programs. However, Continuing Education In Fundraising (www.confr.org) in New Hampshire has agreed to offer their member rate to VANPO members for trainings, and as always the Maine and New Hampshire state associations offer reciprocal rates for their activities. As the VCF negotiates other arrangements they will be sure to let you know. If you are already in a contractual agreement with SymQuest or are purchasing office products from Office Max Boise Cascade, those discounts should still apply.

Q: Who should I call in the short-term with questions about services VANPO had been providing?

A: In the very near short term (through June) you may call 802- 862-0292, the VANPO number. After July 1st please call the VCF at 802-388-3355. The VCF will also regularly update its website and the VANPO website to keep the community informed of new developments and to provide links to helpful websites.

Q: Will the public policy work VANPO initiated continue?

A: During the past five years, with the leadership of VANPO's Public Policy Council and Katherine Long, VANPO has been successful in establishing a broader understanding of the importance of the nonprofit sector in Vermont. It is our sincere hope that this groundwork ensures that nonprofit organizations will retain a "place at the table" even though it is not clear at this time what form any future involvement may take. In addition, at the invitation of Governor Douglas VANPO has appointed Mary Niebling from CVCAC as the nonprofit representative to the Commission on the Future of Economic Development.

Q: Will TAP workshops continue?

A: No. VANPO training workshops are not being developed for fall 2006. Even though there is no plan for reinstating the workshop program we are aware of how important they are for many of you in the VANPO membership. The VCF website will post updates as plans materialize.

Q: What will happen to VANPO's files, databases, archives and office equipment?

A: Assuming membership approval, VANPO's database, web site and historical archives are being sold to the VCF for $25,000 on or around June 30, 2006. Office equipment and furniture is being donated to other nonprofits. In addition, the VCF awarded VANPO a $5,000 grant to help cover administrative costs incurred during this period of transition.

Q: Will VANPO members have the opportunity to provide input to future conversations about nonprofit capacity-building?

A: Yes. The VCF has convened a small group of nonprofit leaders, funders and consultants in July to talk about crafting a plan for moving forward. In the coming months, the VCF will send status updates to VANPO members. The VCF hopes to put in place a way to solicit the important insights and ideas from all VANPO members.

Q: How can I or my organization help?

A: Your input and suggestions are welcomed by the VCF this summer. Please email Brian Byrnes at bbyrnes@vermontcf.org or call 802-388-3355. We appreciate your patience and understanding as we work to transition our assets to the VCF.

Q: How can I contact either Katherine Long or Jane Van Buren?

A: Katherine can be reached at klong@gmavt.net and Jane can still be reached at janevb@vanpo.org or by calling 802-324-1724.