Charles V. Raymond, President, Citigroup Foundation: September 11th Scholarship Alliance

February 11, 2002
Charles V. Raymond, President, Citigroup Foundation: September 11th Scholarship Alliance

As devastating as the September 11 terrorist attacks on the World Trade Center and the Pentagon were, they utterly failed in one important respect: to demoralize the American people. On the contrary, Americans from all walks of life responded immediately to the attacks — not with fear and defeatism, but with acts of bravery, kindness, and generosity that, taken together, quickly swelled into an unprecedented outpouring of support for the families of the victims.

In New York, leaders of the New York Community Trust and the United Way of New York City met on the afternoon of September 11 and, on the spot, established the September 11th Fund. Within days, major corporations and private foundations such as Ford, Carnegie, and the Lilly Endowment followed suit with multi-million-dollar grants to organizations on the frontlines of the relief and recovery efforts. Through it all, however, philanthropic leaders in New York and Washington, D.C., understood that their communities would continue to suffer the effects of that dreadful day for years to come.

One such leader was Citigroup Foundation president Charles V. "Chip" Raymond, who, in the weeks following the September 11 attacks, was instrumental in establishing the Citigroup Relief Fund to provide scholarships to the children of victims of the disaster and was a driving force in the creation of the September 11th Scholarship Alliance, a confederation of grantmaking organizations that had established their own scholarship funds.

Intrigued by an effort that, from the outset, had to consider contingencies twenty years down the road, Philanthropy News Digest sat down with Raymond at his midtown Manhattan offices on a bright December day to talk about the short- and long-term goals of the Alliance, its role vis-a-vis various state and federal compensation efforts, and the special challenges it faces going forward.

Charles "Chip" Raymond is president of the Citigroup Foundation. Prior to assuming that position, he was president of the Travelers Foundation, the charitable arm of the Travelers Group, and also held positions as chief administrative officer for the Law Departments as well as vice president for training and operations at Travelers.

Raymond has held various positions in the public and private sectors during his long and distinguished career, including Commissioner of the New York City Department of Homeless Services, Deputy Commissioner of the New York City Department of Housing Preservation and Development, Deputy Commissioner of the New York City Department of Mental Health, Special Assistant to the Mayor of New York City, Managing Director of the New York City Ballet, and President and Chief Executive Officer of Todd Combustion, Inc.

He received a bachelor of arts degree from the Maxwell School at Syracuse University; attended graduate school at Syracuse University, the University of Pittsburgh, and New York University; and currently serves on the board of directors of the Bowery Residents' Committee, Dance On, Inc., the After-School Corporation, and the Stamford Center for the Arts, and sits on the advisory board of the Alliance for Downtown New York.

Chip and his wife Jan have two grown sons.

Philanthropy News Digest: What is the September 11th Scholarship Alliance?

Chip Raymond: The Alliance is a working group made up of a number of organizations, firms, and corporations that have established scholarship funds for the children and spouses of the victims of the September 11 attacks. Our main goal is to create a one-stop shop where a person can get all the information on the different scholarships available and then, when they are ready to go to college, submit a scholarship application that automatically is reviewed to make sure that the student is considered for all the different scholarships for which he or she may qualify. We're in the process of developing a single application and registration form, and that form will be shared with the different organizations that are administering scholarships on behalf of the Alliance. So far, we have identified two or three entities that are experienced and able to administer college scholarship programs, the largest of which is the Citizens' Scholarship Foundation of America.

PND: Is there specific criteria for membership?

CR: No. An organization can be either a member of the Alliance or an advisor to the Alliance. Others who are funding or involved in the administering or managing of scholarships may want to join the Alliance.

PND: How does the work of the Alliance relate to state government efforts in this area?

CR: Well, as you probably know, New York State has offered four-year scholarships at a level, in terms of financial commitment, that's equivalent to the tuition at a CUNY or SUNY school. That's about $11,800 a year, and it's available to all children — and I think spouses as well — of the victims. The only criterion is that you have to go to a public or private institution in New York State. It's a huge commitment. Massachusetts is considering a similar commitment, paying fees and tuition at state schools in Massachusetts for residents of Massachusetts. I believe the tuition for the University of Massachusetts commitment is around $3,000 for in-state residents. We're talking to Connecticut and New Jersey as well and have had some conversations with folks in Washington, D.C., and Virginia.

PND: With all these different entities involved, do you face special coordination problems?

"...Everybody involved has terrific motivations. The problem is that there are so many pieces and so many different approaches that it's difficult to get the whole thing organized quickly...."

CR: Yes. [Laughs.] Everybody involved in this has terrific motivations. The problem is that there are so many pieces and so many different approaches to this issue that it's very difficult to get the whole thing organized quickly.

Still, while scholarships are difficult, they pale in comparison to what the United Way or Safe Horizon or the Red Cross have dealt with. We have a plan that is reasonably straightforward. If you qualify, you do the following three things and you'll get a scholarship. I've gotten a lot of calls from people who are either representing families or members of families saying, "I have a six-year-old son." And I tell them, "Don't worry about it. We'll have scholarships that are going to span the time required to cover the educational needs of your child. When your child gets to be sixteen or seventeen years old, we'll have a process that you'll be able to hook into." Now, some of those scholarships will be needs-based and some will be geographically based, as in the case of New York or Massachusetts, but there will be scholarships available for all qualified parties.

PND: Are you concerned that the expectations of all these different groups and organizations will complicate your efforts?

CR: No, no, I'm convinced we can do this. It's absolutely doable.

PND: Let's talk more specifically about your plans going forward. In a previous conversation, you mentioned that the Alliance had $70 million available for scholarships. Is that the final amount, or will there be more when all is said and done?

CR: When I say $70 million, that does not include the money from New York State, which can't be counted as cash in hand. But we're shooting for around $100 million. That's what we'd like to see.

PND: And your short-term goals?

CR: Short-term, we want to provide scholarships as needed to eligible individuals currently in college, whether they're freshmen, sophomores, juniors, or seniors. And we want to be able to address the needs of those children or spouses who are going to be entering college in the fall of '02. That's what we plan to focus on in the short term.

We don't have a formal system set up at the moment, but the word has gotten out and we're meeting with other organizations, like the September 11th Fund, that deal directly with the families. We're also planning to put out bulletins and information to all the families, so they'll know where to go and whom to call for information about scholarships. So we feel an informal network for dealing with the kids who have immediate needs is going to work just fine in the short term — we're all talking to each other, and if I get a call I know exactly who to refer it to.

I should also mention the Jack Kent Cooke Foundation here. They're a member of the Alliance, and they announced that they were going to put up a million dollars for kids who are currently in school, whether it's a two-year college, a four-year college, or a technical school. The grants will be awarded on a first-come, first-served basis and there's no needs test attached, so if someone needs help and is in school today, they can go to the Cooke Foundation and get immediate assistance.

PND: What about the longer-term goals of the Alliance?

CR: Longer term, we want to develop a structure that will keep the Alliance in front of the families, so that they don't end up saying, "Gee, wasn't it about ten years ago that we heard something about scholarships?" We're going to do a yearly notice to the families of victims, we're going to ensure that we have the dollars needed to provide assistance to all the children or spouses who are eligible, and we're going to make the process as simple as possible. A key to this will be our ability to work closely with college-aid offices. They're the folks who'll be able to say, "Okay, this kid needs $25,000, and we're getting ten from Citigroup and five from the Children's Fund and ten from this and so forth." They're very much an integral part of this whole thing.

PND: Do you have a plan in place to establish the scholarship eligibility of families and individuals?

"...We want to make sure that applicants don't have to navigate the scholarships and figure out, one-by-one, what they qualify for...."

CR: The eligibility issue is one of the reasons that creating an entity that would then establish a one-stop-shop for the applicants made so much sense. In the end, there are going to be many different entities awarding scholarships, and each member has established, or is in the process of establishing, their particular eligibility criteria. For example, the Citigroup Relief Fund's scholarships are going to be awarded on the basis of need. But there are also organizations offering scholarships that have no needs requirements. So, we want to make sure that applicants don't have to navigate the scholarships and figure out, one-by-one, what they qualify for. The applicants should be able to fill out a form, submit some basic documents, and the administrator will take it from there and get people to the right funds.

PND: Will scholarships awarded by Alliance members reflect the changing needs of families over time? In other words, will scholarship amounts be adjusted, up or down, according to a family's changing economic circumstances?

CR: We are grappling with that. We'd like to be able to say that if tuition today is $10,000, and in twenty years it's $30,000, we should be able to provide a proportionate amount of scholarship aid to offset the need. Need and school costs will be assessed and scholarships allocated at the time of enrollment in college or trade schools.

PND: And by proportionate amount, you mean 100 percent of a recipient's educational needs?

CR: No. Let's take the Citigroup Relief Fund as an example. Once we have all the data — that is, the exact number of children and at what age they become eligible for a scholarship — we'll do some actuarial runs. Then we can review the results and see how we need to allocate our money. So, if we have a little over $20 million today, we want to make sure that we are distributing both the principal and the compound interest on the balance as we go along, so that twenty-two or twenty-three years out, whatever it might be, we're close to zero, we've spent all our money. In other words, we're not just going to use the interest on the fund to provide scholarships; we're going to try to use the fund up by the end of term, whatever that may be.

But there are other organizations with funds that have to sort of sit down and decide whether they're going to do a $2,500 scholarship on top of, say, someone else's $10,000 scholarship. And then there's the money from the state of New York, for those kids who decide to go to a New York school. The toughest thing, though, is the whole needs-based issue, the fact that some funds are needs-based and some funds are not. And how we go down that road isn't quite clear yet.

PND: Are you planning to share information with the other funds and agencies that have been at the forefront of the relief and recovery efforts — the September 11th Fund, the American Red Cross, the New York State Attorney General's Office, and so on?

CR: Yes. We're working with all those organizations and we plan to share information with them. We want to make sure that people are aware of these scholarship funds, are aware of the Alliance, and are able to easily access information about the funds — not just now, but in fifteen years.

PND: Under whose legal jurisdiction do your activities fall?

CR: Well, we're a loose confederation of organizations, and we've selected the Citizens' Scholarship Foundation of America and possibly one or two other organizations to manage the scholarship award process. So we don't feel it's necessary for the different funds themselves to create a formal, legally chartered organization. We're also working with the Educational Testing Service and the Institute of International Education.

PND: Are you concerned about the challenges inherent in holding together such a diverse coalition over a twenty- to twenty-five-year span?

CR: No, I'm not. the Citizens Scholarship Foundation, ETS, and the Institute of International Education have been around for a long time and manage huge numbers of scholarship programs. It's their business. My biggest concern is to make sure the families understand that these scholarships are available. I'm convinced that we can develop a structure that will enable families to meet all or most of their educational needs. All we have to do, in terms of the Alliance, is make sure that those three major organizations work together, and that we continue to identify and coordinate with other organizations that have similar purposes.

PND: Is there a philanthropic precedent or model that you have in mind as you organize this?

CR: We didn't have a model in mind. We just want to work together well and do everything we can so that the people for whom these scholarships exist can access them easily.

PND: Will the Alliance provide financial support for pre-collegiate educational needs?

CR: Each individual organization has its own criteria. And while I can't tell you definitively, I think there are probably one or two that will provide funding for either prep or parochial school and so forth. But the big ones are strictly for two- and four-year colleges, which includes technical schools. Having said that, one of the things we are considering is certificate programs. There are a lot of kids who are not going to go on to college but may want to go to a technical school, or culinary school, or some other kind of school. Shouldn't we provide support for those kids? I say yes, but we haven't addressed it yet. Citigroup's fund originally was intended for two- and four-year colleges. If you change your criteria, you have an obligation to go back to your donors — our fund has close to seven thousand donors — and say, "You know, we're going to change the criteria. I assume no one has a problem with that." That's the difficulty. We have the time now to sort of think about the decisions we made in the heat of the moment and to decide whether they were the best decisions, even though we tried to be very broad in our thinking. And if we find as we move forward that we have more money, or that there's a huge new need, then we ought to think about how we can adapt. However, other scholarship funds will provide scholarships for any approved post-secondary program.

PND: Let's talk about the Citigroup Foundation. Have or will the activities of the Alliance affect the activities of the foundation?

CR: The only way it affects the activities of the Citigroup Foundation is that we have taken on, in our spare time, the responsibility of raising the money and processing the checks. We have a volunteer corps, a crew of about eight or ten friends that my wife put together, that comes in three times a week to input checks.

Another way it affects it us is that we have taken on the responsibility of coordinating and organizing the Alliance. We have a staff of eleven, and six of them have been intimately involved in helping us put this together. This year, the foundation gave grants amounting to $73 million. The $15 million we've allocated to the scholarship program is on top of that. We've also provided about fifteen grants to organizations that work with small businesses in Lower Manhattan to help with their expenses, because they're taking on a huge additional burden with respect to dealing with many of the small businesses that are in trouble down there.

PND: Do you think the events of September 11 will change the way the foundation approaches its grantmaking in the future?

"...The Citigroup Foundations feels very strongly that the dollars we put out should continue to support the organizations we've supported in the past...."

CR: I don't think so. We feel very strongly that the dollars we put out — and about 70 percent of our grant dollars go to U.S. based not-for-profits, with the other 30 percent going to support organizations in seventy-four countries outside the U.S. — should continue to support the organizations that we've supported in the past. Shifting money from an organization in the South Bronx that builds low- to moderate-income housing to an organization downtown does not make sense, because the organization uptown is, indirectly, working with many of the people who were affected by the attacks on the World Trade Center. So we want to make sure that we continue to support organizations that we've supported in the past. In many cases, if an organization comes to us and says, "Listen, we need operating support because these three grants didn't come through," we'll consider helping.

The bottom line is, we have a large number of organizations in New York and around the country that are important to us, that we have long-standing relationships with, and we're not going to let those relationships go by the wayside.

PND: Do you have specific goals or programs in 2002 that you're excited about?

CR: We have two signature programs that we're very excited about. The first, the National Academy Foundation, is an organization that our chairman and CEO, Sandy Weill, started about twenty years ago. Basically, it's a school within a high school where kids take additional courses in business or travel and tourism or information technology, and we provide mentoring and scholarships and internships and so forth. The program funds about 450 of these academies around the country. It's a big program — I think total enrollment is something like thirty thousand kids — and American Express, Merrill Lynch, McGraw Hill, and a number of other businesses are major supporters. But because we feel it's important, we're going to expand it outside the United States, specifically in London, where we are sponsoring three academies of finance.

The second is our microcredit program. We're one of the largest corporate foundations with a microcredit program, and our support for the program is growing dramatically. At present, we fund forty-six programs in twenty-six countries. It's something we view as a major economic engine for people in developing countries, many of whom are living on a dollar a day or less.

And third, we are very much involved in the whole area of economic and financial literacy. We have a large number of programs both in the U.S. and outside the U.S. that are designed to teach people about personal finance — credit and mortgages and insurance and those kinds of things.

PND: It sounds like you expect the Citigroup Foundation to be a larger corporate grantmaker in five years than it is today.

CR: Absolutely. We've grown every year, and I suspect that will continue.

PND: Well, thanks very much for your time this morning. It's an important effort, for many reasons, and we wish you the best of luck with it.

CR: Thank you.

Mitch Nauffts, PND's editorial directort, interviewed Chip Raymond in December and followed up with him via e-mail in early February. For more information on the Newsmakers series, contact Mitch at mfn@fdncenter.org