June 11, 2000
When I first published the Children with Diabetes web site in July 1995, I never imagined that it would grow to include over 7,000 pages of unique content. I never imagined that tens of thousands of people from around the world would visit each month. I never dreamed that we would one day have a Diabetes Team of experts in all aspects of diabetes. And I had no idea how much work it would take to keep it running.
From July 1995 to December 1997, Children with Diabetes was nothing more than a hobby. I worked an hour or so everyday, and a couple hours each Saturday and Sunday, to add content and keep the site running. Fundraising efforts were minimal, even though it became more and more apparent that the costs in hardware and bandwidth were growing to be more than I could pay on my own. We had a few personal donations and one major sponsor, but it wasn't enough. Many people advised me to make Children with Diabetes a not-for-profit corporation, since that would help us convince people to donate money to us. It seemed a reasonable argument.
In late 1997, I visited the IRS to learn how to become a 501(c)(3) not-for-profit corporation. With the help of a nice woman at the Cincinnati IRS office, I filled out the paperwork on my own and submitted it. I also incorporated Children with Diabetes in Ohio, where I live. A couple months later, I received the letter from the IRS granting Children with Diabetes provisional status as a 501(c)(3). We would have to prove public support to maintain the status, but we'd crossed the first hurdle.
In 1998, Children with Diabetes gained several new sponsors and began to get requests to advertise through banner graphics. Revenues were enough to cover the costs of the technology, attendance at the annual conferences of the American Diabetes Association and American Association of Diabetes Educators, and printing and shipping over 75,000 of our brochures to people in 65 countries. I began to work several hours each day, and 14 to 20 hours each weekend, as the workload began to increase significantly. With no money to pay salary, I continued to work my day job.
In 1999, our traffic grew but our revenues did not. We ended 1999 having spent more than we earned. And the workload grew to the breaking point.
In the fall of 1999, I realized that, as is stood, the operation of Children with Diabetes was not sustainable. New commercial diabetes-related web sites were springing up everywhere, flush with investment money that enabled them to employ new technology that was beyond the reach of Children with Diabetes. There was no way for us to expand our services because we had no money to pay for either the technology or the staff to use it. I began to feel extremely frustrated at the daily, personal demands of the web site, and in particular, at the time I wasn't spending with my family. There seemed no way out other than to shut it down and walk away.
During the last couple months of 1999, I began discussions with two parents from the Los Angeles area who I met while presenting the web site at a family weekend retreat. I had shared my frustration with the poor financial state of Children with Diabetes, and they came up with a plan to start a commercial company and make the web site a business.
After some months of discussion with them and friends, and a lot of soul searching, I decided that this was the right thing to do. In March 2000, the board of Children with Diabetes resigned and the members elected a new board led by Sonia Cooper of Boulder, Colorado. I was no longer officially involved with the 501(c)(3), though I continued to operate the web site. I presented Sonia with the costs of operating the web site, which were more than the foundation had in the bank and could hope to raise.
At the same time, the parents from Los Angeles, myself, and a few others who had helped me over the years formed a new company, Diabetes123. Our goals were to acquire the web site from the foundation in exchange for equity in Diabetes123 and raise investment money to fund operations and expansion of new services. The board of the Children with Diabetes Foundation, as the not-for-profit is now known, agreed to our offer to acquire the web site in exchange for the stock in Diabetes123 and our private placement to raise money began. In May 2000 I resigned from my day job and, finally, am able to devote my full attention to the operation of the world's finest diabetes web site.
I believe this represents a win for everyone involved. Through the new company, we can raise money and hire staff to expand the services we offer to you, the family of Children with Diabetes. We can also broaden our reach to include everyone living with diabetes, which we will do under the Diabetes123 name. The Children with Diabetes web site will continue to operate as the parents and children's area of the overall Diabetes123 site, and will always focus on the needs of children with diabetes and their families. With our new services, we hope that we can serve you even better.
The Children with Diabetes Foundation has a significant equity stake in the new company. That equity can be used to fund research according to the guidelines of the foundation. The opportunity to fund research was never possible before.
Finally, on a personal note, I would like to thank each of you for allowing Children with Diabetes to help you and your family. In 1989, when my daughter Marissa was diagnosed with Type 1 diabetes at the age of 24 months, my wife and I had no one to turn to for support. Today, with Children with Diabetes and Diabetes123, no one who lives with diabetes is ever alone. Whether you live in New York City or the mountains of Montana, Argentina or Zambia, you have a family you can call on and count on for support and help 24-hours a day, seven days a week. That family lives on the Internet at childrenwithdiabetes.com and diabetes123.com.
Last Updated: Thursday August 29, 2002 20:59:42
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