Reference no: EM131682059

Question: Fidelity Investments' Partnership with Citizen Schools

Roy Fralin stood in front of a roomful of active sixth and seventh graders in an inner-city public school in Roxbury, Massachusetts. The classroom walls were covered with flip chart paper, which were packed with diagrams, numbers, and terms like "savings," "budget," and "investment." A student stood at the front of the classroom. Fralin handed him a Red Sox cap to illustrate a loan with interest. "OK, when you give it back, you'll owe me how much?" Another student shouted out the answer. "Great!" exclaimed Fralin. They exchanged high fives. "Now, how much are we putting away for your 401(k)?" The students punched their handheld calculators. Fralin was not a public school teacher, and teaching personal finance to middle schoolers was not his regular job. He was a vice president and investment advisor at Fidelity Investments, where he worked mostly with high net-worth clients. But here he was, every Wednesday afternoon for 10 weeks, teaching a curriculum that Fidelity employees had developed called "How to Invest Like a Millionaire." The program was part of a partnership between an innovative nonprofit called Citizen Schools and Fidelity Investments, one of its corporate partners. "I just don't see any downside," Fralin later reflected in a clip posted to YouTube about his experience as a citizen teacher. "I think this is going to be a success." In June 2012, Fidelity Investments was one of the leading providers of financial services in the world, administering $3.6 trillion in assets for 20 million individual and institutional clients.

The company, which was privately owned, offered investment management, retirement planning, portfolio guidance, brokerage, and benefits outsourcing services. It also operated its own family of mutual funds. Fidelity maintained its headquarters in Boston, but had 10 regional operating centers and 170 retail locations. In 2011, the firm had more than 39,000 employees and revenues of around $13 billion. In 2009, Fidelity set about rethinking its approach to community relations. For many years, the firm had been philanthropically active, giving to a wide range of charities in its home community and elsewhere. But the company had come to believe that it could have a greater impact by focusing on partnerships with a small number of what it called "best in class" nonprofit organizations. An issue of particular concern to Fidelity was education, especially the shocking dropout rates in many of the communities it served; nationally, 1.2 million students dropped out of high school every year, many of them as early as ninth grade. In researching various options for making a difference, the company learned that the middle school years were critical in determining whether or not students would go on to graduate from high school. To focus its resources on this issue, Fidelity chose to partner with Citizen Schools (CS). Social entrepreneur Eric Schwarz had founded CS in 1995 in Boston to operate afterschool programs for middle school students, aged 11 to 14, in disadvantaged communities. The nonprofit recruited volunteer professionals-"citizen teachers"-to offer after-school apprenticeships in subjects they were passionate about in schools in the CS network.

As a culminating experience, students would present what they had learned to friends, family, and teachers at what CS called "WOW!" events. In 2012, Citizen Schools had active partnerships with 31 schools in low-income communities in seven states, serving more than 4,000 students. Fidelity had contributed money to Citizen Schools since 1998, but in 2009 it significantly stepped up its commitment, becoming the nonprofit's lead national partner for its 8th Grade Academy (8GA), an initiative that helped students with academic and life decision making. In addition to its financial commitment, the company went beyond charity, encouraging its employees, like Roy Fralin, to teach in Citizen School programs. By 2012, Fidelity volunteers had taught more than 70 apprenticeships in such wide-ranging topics as robotics, law, and financial literacy in 22 middle schools. Several executives had served on various advisory boards. The company also donated meeting space and equipment. For example, students who had learned about web design from a Fidelity employee were invited to use the company's Center for Applied Technology for their WOW! event, presenting their work in a state-of-the-art facility. An external evaluation commissioned by Citizen Schools showed that its programs had "successfully moved a group of low-income, educationally at-risk students toward high school graduation and advancement to college, and [had] set them up for full participation in the civic and economic life of their communities."

Seventy-one percent of CS alumni completed high school in four years, compared with 59 percent of matched peers. Sixty-three percent of students who had participated in 8GA five or more years earlier had enrolled in college, compared with 41 percent of low-income students nationally. Fidelity indicated that in an internal survey, 95 percent of the company's employees who had participated in the Citizen Schools partnership reported improved team-building skills, and three-quarters reported feeling more connected to their colleagues and having improved communication, public speaking, and presentation skills. Eighty-three percent said the program had provided an opportunity to teach skills directly related to their jobs. Betsey Brew Boyd, Fidelity's vice president for community relations, noted: "Fidelity's multi-dimensional partnership with Citizen Schools has yielded skills-based volunteering opportunities for employees, leadership experiences for high-performers, board memberships for executives, and a remarkably effective strategy for meaningful intervention in the lives of at-risk students."

Discussion Questions

1. What evidence do you see in this case of the three kinds of corporate philanthropy discussed in this chapter: contributions of cash, in-kind products or services, and employee time?

2. What are the benefits and risks to Fidelity Investments of its partnership with Citizen Schools?

3. Do you consider Fidelity Investment's partnership with Citizen Schools to be an example of strategic philanthropy, as defined in this chapter? Why or why not?

4. If you were a community relations manager for Fidelity Investments, how would you evaluate the impact of this partnership? What kinds of impacts would you attempt to measure, and why?