The Bain Capital you haven’t heard about.
In early 1991, Mitt Romney called to meet with Michael Brown and Alan Khazei, co-founders of a Boston-based youth service program called City Year. Romney had just returned to consulting firm Bain & Co., an original City Year sponsor that had fallen on very hard times, and he could no longer justify the firm’s financial commitment.
“Mitt told us that money for us would mean more layoffs at Bain & Co.,” recalls Khazei. “But then he said that he would personally donate and raise the rest of the money from his partners, so that Bain & Co. could keep its name on a team. When things turn around, he told us, the company would begin to contribute again.”
Which it did, becoming the only company to have sponsored a City Year team in each year of the organization’s existence. Bain Capital, the consulting firm’s independent private equity offshoot, also has been a sponsor for the past two decades, with managing directors Josh Bekenstein and Jonathan Lavine currently serving on the organization’s board of trustees. Romney also is a former board member, while managing director Mark Nunnelley is credited with helping to first form the relationship.
“We viewed ourselves as social entrepreneurs, so venture capitalists were some of the first people we called,” Khazei explains. “The first VC to actually pick up was Steve Woodsum of Summit Partners – he now serves as City Year’s chairman – but Nunnelley wasn’t too far behind. They really understood our vision, and why it was important.”
Michael Brown, City Year co-founder and CEO, adds: “Having these sorts of people on our board has had a transformational impact. They’ve tought us how to hire ahead of our needs, put systems in place for valuing different things we’re doing and how to invest in our own people. And they’ve helped mentor me, as I’ve learned to be a CEO.”
At this point I should mention that I’m not an unbiased observer. I served in the City Year corps from 1994-1995, when President Clinton would cite City Year as the model upon which he based the entire Americorps program. My team was a jack-of-all-trades, doing everything from gutting crack houses to building community gardens to launching a community newspaper.
The program has since expanded to 25 cities, and focused all of its service around creating positive conditions that help keep kids from dropping out of school – with corps members working in underperforming urban schools as tutors, mentors and role models. It’s an extraordinarily important social and economic mission, considering the high rates of unemployment and incarceration for those who do not finish high school or receive their GEDs.
Approximately one-third of City Year’s funding still comes from private industry – sponsors who provide both and various opportunities to corps members (many of whom come from difficult situations themselves). Bain Capital, for example, recently brought in corps members to learn job interviewing and networking skills. Members of the firm also regularly visit with “their” team, including in physical service projects at the team’s school.
Then there was Romney’s role in protecting Americorps, which also accounts for one-third of City Year’s budget (the remainder comes from participating school districts). Back in 2003, partisan political bickering made it appear that the Americorps budget would be slahed by a whopping 80%. Brown and Khazei again called on Romney, who now was governor of Massachusetts. Romney responded, teaming with Pennsylvania’s Ed Rendell to get 41 governors to sign a letter asking President Bush to fully fund the program (which ultimately happened).
[Note: I have repeatedly asked the Romney campaign to affirm their candidate’s continued support of Americorps, but to no avail. He suggested in a New Hampshire town meeting three months ago that he’d prefer programs like City Year return to a private funding-only model.]
Bain Capital and Bain & Co. have taken a lot of heat over the past several months, as their former leader runs for president. Some of the criticism has been warranted. But so is applause for what the firms and Romney did for, and with, City Year. Their public service is as much a part of their record as is their private equity.
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