2013-07-26

City Year Revenue Tops $100 Million with Focus Shift

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Link: http://www.bizjournals.com/boston/print-edition/2013/07/26/city-year-revenue-tops-100m-with.html?page=all

As City Year wrapped up its fiscal year on June 30, the Boston-based nonprofit cleared $100 million in annual revenue for the first time in its 25-year history.

The organization, considered a leader in the service movement, now has a presence in more than 25 cities.

The key to this growth was the group’s decision to focus the efforts of its young corps members — ages 17 through 24 — to help stem high school dropout rates. The group was originally funded by corporate donations, but began to actively seek out contributions from school districts about six years ago.

A constant throughout all this change is City Year’s red jackets, a key element of the uniform that corps members wear. Corporate donors pay $100,000 each to sponsor a team of corps members and have their company name emblazoned on the jackets.

“We worked hard on the brand,” said Steve Woodsum, founding managing director of Summit Partners in Boston and chairman of City Year’s board of directors. “We’re very proud of the brand. I also think fundamentally what we’re doing in the (nonprofit) space is relatively unique. And that is to put together a diverse team of college-educated graduates to assist in the classroom and try to work with the kids who are struggling.”

That idea of having an impact on two levels — engaging young people in community service and also providing role models and mentors in communities — was the brainchild of Michael Brown and Alan Khazei, who were Harvard Law School roommates when they started City Year in 1988. Brown still runs the organization, while Khazei left in 2006 and started a different nonprofit called Be The Change and, later, unsuccessfully ran for the U.S. Senate.

In its earlier years, City Year was more of an all-things-to-all-people organization, basically doing the bidding of the communities in which they worked.

In 2006, the organization went through a strategic planning process. As high school dropout rates were soaring in many cities, its overseers decided to make working exclusively in schools the focus of City Year’s next chapter.

Today, school districts pay approximately $10,000 for each City Year corps member in their schools, which covers about 30 percent of each corps member’s cost, Brown said. The Boston school district, for example, spent $2.5 million through various funding sources for 250 City Year corps members in 20 schools. Corps members typically spend 11 hours a day in the schools four days a week during their 10-month tenure, while Fridays serve as a professional development day.

Corps members work with students in the classrooms and organize after-school activities such as chess and music clubs. They even call students at home when they do not show up for school. At Burke High School in Dorchester, for example, the attendance rate was 92 percent in the last school year compared to 84 percent in 2010 after three years of working with City Year.

“The corps members are young and close in age and they present themselves as cool and exciting people. Kids want to be with them and get to know them,” said Lindsa McIntyre, Burke’s headmaster. “When you rely just on teachers, it doesn’t extend into the corridors and into the cafeteria and into those other spaces in the school community.”

City Year’s revenue has grown to more than $100 million from $60 million in the 2008 fiscal year, according to tax documents. Corporate donations have grown to $18.6 million from $11.5 million over that time. The federally funded Americorps program remains City Year’s largest funder. But today City Year says about 22 percent of its revenue comes from corporate donations and 20 percent from school districts. This compares to six years ago, when a third of City Year’s revenue came from corporations and there were no school district funds.

Corporate support remains at the heart of City Year, especially from ComcastBainCSXand others. Eight companies round out the organization’s biggest givers, each of them investing $1 million or more in City Year for multiple years, Brown said.

“When a school district has City Year, it gets federal resources and corporate sponsors,” Brown said.

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