Gerald Chertavian #57

Founder and CEO Year Up

He needed opportunity and access. He didn't need motivation. He didn't need persistence. He didn't need grit. He came with those things.





Interview by Heidi Legg

The American opportunity divide between the haves and have-nots, continues to grow and unrest from American youth is playing out over age-old wounds as we watch Baltimore this week. Hope is hard to see sometimes. So in light of it all, I decided we should sit down with someone who is taking steps to improve things for all kids who deserve more than a chance. Already recognized nationally and locally, Chertavian has some very interesting things to say about education, college and, when pressed, the top-earners giving back. He seemed like the perfect voice for today.

Gerald Chertavian founded Year Up, an intensive one-year training and education program that serves low income youth ages 18-24, more than fifteen years ago. His mission is to help young adults find a way to a living wage after high school and prepare for and access a career path and pursue higher education. Today there are cries across the system that community colleges in this country are broken and the ubiquitous figure thrown around in the education industry is that only 20 per cent of students in community colleges graduate.

Today, Year Up is in 14 cities across America and growing. The original model, Core, partners students with leaders in American industry who, on a per-student basis, fund that student to participate in a one-year Year Up program. The student receives a stipend, a year-long experience, an internship and classroom training that counts towards college credits. In Boston, for example, the students receive $153/week during the Learning & Development phase while they attend classes at the Year Up site and $225/week or $900/month during the internship phase. This varies by city and students are penalized financially if they are late for class, not wearing professional attire or missing an assignment.

“These young adults are the assets this country needs. They're not deficits. They're not social liabilities. On balance, if you look across our inner cities, you look across our areas of poverty, you have the economic assets this country needs to be globally competitive, to have a strong workforce, to have the strong communities we want. The question is: how do we realize the potential of these young people?” says Chertavian.

That Core program is in its own building and in 8 cities around the US. But today, four years into a pilot, the Professional Training Core (PTC) program places these same terms inside a college. To date all of the PTC partners are community colleges, except the University of Florida in Jacksonville. This new PTC model allows Year Up to reduce the cost per student that they need to cover both the student stipend and the overhead by being inside the community college.

I sat down with Chertavian to talk about what drove him to start Year Up and if Year Up hopes to remodel community college across the nation where government seems stuck.  

What are you doing and how has it grown?

I learned very early on what that opportunity divide looked like in terms of young people who weren't achieving their potential for all the wrong reasons: the color of their skin, the zip code they were born into, the school system they attended, or the bank balance of their parents. This divide limits those young people's potential to get where they need to get to. It affects all of us as a country.

This was burned into my conscience early on in my life. It is not only wrong in any way you look at it: financially, morally, socially but it's also something that's fixable. We started Year Up in 2000 with a very resolute mission and vision to provide adults with opportunities to reach their potential. That's never changed.

These young adults are the assets this country needs. They're not deficits. They're not social liabilities. On balance, if you look across our inner cities, you look across our areas of poverty, you have the economic assets this country needs to be globally competitive, to have a strong workforce, to have the strong communities we want. The question is: how do we realize the potential of these young people? Year Up's gone from 22 students to 2,750 students and not because we're some wonderful organization. It's because these young adults are who we know they are.

Why after having significant financial success when you sold your Internet Services firm at a young age, did you turn to this?

I got my best education in the Lower East Side of Manhattan back in the late '80s spending every Saturday of my life with a young boy who lived in what was then the most heavily photographed crime scene in NYC. Spending every Saturday in that context and then seeing what was his reality changed my life. It also educated me deeply about the nature of poverty, the nature of opportunity. The things I thought I knew growing up about why people are poor actually weren't true.

What myths were changed for you?

That if you're poor, it's because you're lazy. I grew up with a view that said that if you're poor, it's your fault. It's because you didn't work hard enough. And I was totally wrong.

The young boy who I had a chance to be a Big Brother to has since become a member of our family for all purposes. I treat him as I treat my children. What he taught me was incredibly valuable because all he needed was opportunity and access. He didn't need motivation. He didn't need persistence. He didn't need grit. He came with those things.

He grew up in a neighborhood that engendered those competencies and qualities because of what he went through in his life. What he needed was an opportunity to put those into productive capacity. We have that in millions of young people in America today.

Corporations are investing money with you that are not charitable dollars?

That's correct. They take on a certain number of interns per cycle and pay a weekly rate. We bill them on a weekly basis, and interns fill out equivalent time sheets. In some cases a student may not complete the program and fire him/herself, in which case the employer partner stops paying for that internship seat once a student leaves. Our overall program retention is high (75% or above), and even higher during the internship phase in general. 

Are you the new model for community college?

We have to recognize that we've got 1,100 community colleges that educate 45% of college goers in this country. It's a big system. And it is not particularly well funded.

The things we do at Year Up require caring adults. They require folks who can bridge the gap between labor and education. Our community colleges are not well funded today to do everything that they would like to do. What Year Up does fundamentally is we support that young person in a learning community with peer support and very clear expectations around behavior and attitude, which is almost antithetical to how many community colleges operate today.

We also connect that young person through internships to one of three hundred companies around the country. Most community colleges don't have the fluency of working with companies in the way that we do. 

You're now chairman of the Roxbury Community College?


What do you think about President Obama's idea of bringing the cost of community college to $0?

President Obama's recent work on community colleges is not geared towards the lowest earning Americans, nor is it focused on folks in the lowest socioeconomic group. It's actually aimed at someone one step up from that, but who still has a challenge getting the education they need. 

The Atlantic wrote about how the Obama Plan falls short.

What it needs to do is not just think about access and about getting 'to' college, but to focus on getting 'through' college and having a career at the end of it.

If I were to look at the president's policies, I'd say it's an absolute great start. We need to also look at how we support students when they get to those community colleges and ensure that they're connected to productive careers as they finish.

I'm not worried about the adults in the system. I'm worried about the students. Are we giving them the education they need, the quality they need and the connection to that next step after community college, whether it be a four year degree or straight into a career.

Year Up is growing fast. Why did you take on this additional Roxbury College Chairman role?

Former Governor Patrick had asked me to serve in that capacity. The honest answer is that I never fought in a war for this country and if your country asks you to serve, you do your best to serve.

I knew it was taking a college that historically had quite a lot of challenges to it but I don't think public service is done out of convenience. It is being done out of need and a sincere desire to serve your community well and to make sure they get the opportunities they deserve.

What are the upcoming jobs you see for Year Up students that might bridge the opportunity gap?

Year Up is demand driven. Answering that question is integral to make sure we run a good organization. Middle skills are about 32% of the labor market today. It didn't exist as a labor category before 1970. You now have a new labor category. It used to be 'unskilled' and 'college.' Now you have 'less than high school', 'middle skill' and then baccalaureate plus. That 'middle skill' area – more than high school and less than a four-year degree – is the fastest growing part of the labor market and it's the largest part of the labor market today. That is where we are absolutely laser focused at Year Up. 

We started in technology. Programming is a new big area for us. We look at finance, operations and increasingly sales and high value customer service as great areas for us. Any business in this country that's selling to small businesses or consumers is dealing with an increasingly heterogeneous customer base. Who sells to a diverse demographic? Who has the cultural competency and the language fluency to sell to small businesses that are increasingly diverse? This is not only a positive social angle. It's a business imperative.

I think your best CEOs are seeing that they have to build diverse pipelines of talent to sell and service their customers who are increasingly much more diverse.

Are corporations rallying behind what Year Up is doing? Does it help them?

We have found a willingness of companies to partner with us to figure this out together. Businesses have a lot of options from where they can get talent. We're asking them to consider working with what would be considered a non-traditional pipeline of talent here in the US. I don't think the first reaction of every CEO we talk to is, ‘Let's just do that.' But I think there is awareness that they need a long-term talent pipeline and they recognize that diversity is increasingly important and that they have a responsibility to think about the externalities of my choices as a CEO.

I think they also realize that they can't sell products and services to a country that isn't economically viable. It's in their motivated self-interest to create a working economy in the US. I think companies have been willing to partner with us, willing to put their toe in the water and then as that feels good and works, they're willing to dive in and work with us very meaningfully whether it's JP Morgan, Bank of America, American Express, or Harvard.

I'd be disingenuous if I didn't say it takes some time to prove that this talent is as good, if not better, than any other pipeline of talent that company could find.

Are you usurping a whole process the government dollars are supposed to support in state and community college?

We certainly work with the administration on lots of initiatives, as our legislators in Congress. How do you think about educational reform and work force development reform?

I know we've served as a model in recent legislation around the reauthorization of the Workforce Investment Act. [California alone will receive 454 million from the WIA this year, alone.] Both Senator Bennett and Senator Portman have gone on record that our model was very useful as they thought about what models they want to incent and create going forward.

This is a big part of our impact if we can we serve as a successful model that others can emulate. We're voraciously focused on sharing what we know and sharing what works. This isn't only about building Year Up. It's about changing the country. It's about changing the systems and likely generous spirited to a fault to try to share what we know and have greater impact across the country.

What's the hurdle for Year Up? 

The hurdle for Year Up is making sure we generate the demand. The corporations investing into our talent pipeline pay for our students. Businesses have to go through a process of learning and getting comfortable in partnering with us – but that takes time. We are building the capacity to increasingly find the demand. Once you find the demand, the question is whether you can deliver or not and that becomes about people and execution. At the end of the day, hiring the right people is probably the number one thing we need to do.

We're an $86 million organization who will grow to twice that in the next four years. We will be a relatively large nonprofit. That's about hiring the right people. Then it's about our ability to execute and keep true to our mission of serving those young people while we also meet that demand in the market place.

How many Americans currently have four-year college degrees?

About 28% of Americans have a four-year degree. Another 18 to 20% of Americans have a two-year degree. The interesting question is of that 28% how many of them received their degree between the ages of 18 and 22? The answer is about seven to eight percent.

[PBS reported that the Lumina Foundation claims nearly 40 percent of working-aged Americans now hold a college degree but adds in those with two-year degrees. As Chertavian notes, the percentage of 4-year Bachelor Degree holders and higher in the US census 2012 was 28.8%]

Where it gets really interesting is that of all the people in the country who have those four-year degrees, only about 7 or 8% got that degree between the years of eighteen and twenty two. That's incredibly important. Getting that 8% of Americans to 10% would be a 25% increase in the number of adults who have the traditional concept of what higher education looks like.

I think we should worry about the 92% that actually aren't consuming higher education. The average age of a Bachelor of Arts graduate is about 28 years-of-age. Fifty per cent of people who go to college in this country work full time. Business shouldn't be about designing linear systems of you go to school and you go to work. It should be about how we concomitantly feed the belly and feed the brain at the same time. That's what Americans do. That's what the majority of Americans do but the people creating policy, many of whom, including myself, consumed our education in a way that only a fraction of the country has the privilege to do.

One question I have long wanted to ask in Boston is this: There are many educational startups in Boston. Every year there are more. Is it helpful to have so many chasing the same thing? Would it be better to consolidate the effort and dollars?

I would say that many of us are just scratching the surface of a lot of these challenges. There is more money in this country than there are capable executives to steward and cultivate those dollars from a donation point of view. We have a forty trillion dollar intergenerational transfer of wealth. Are you kidding me? There's enough philanthropy out there. The question is how is philanthropy looking at social enterprises? Only 10% of the money is going to social enterprises such as Year Up. A vast majority goes to religious institutions and then educational institutions, health care institutions. If you look at youth-serving organizations that are not institutions, you get a paucity of the philanthropic capital out there. Why? Because it's a bit riskier to give to Year Up.

Would it be better in Boston if the money were all pooled together?

Locally, we are all figuring out problems and we work with each other. We'll share and swap notes with Michael Brown at City Year. I'll be on the phone with Richard Barth at Kip. We see each other not as competition, even though we would love more money to flow into the sector.

So from your vantage point as someone in the sector, you see the expanding number of education charities as a positive.

Absolutely. It’s a complete fallacy out there to think we have way too many nonprofits and they should all merge. If you want mergers in the nonprofit sector, go get ten million dollars and go to forty organizations and get them to merge and give the losing CEO –twenty of them – a half million bucks to walk away. Because, guess what? These are their livelihoods. They don't have great pensions and there aren't, the last time I checked, golden parachutes when two companies merge.

In the for profit sector, when you merge, the losing CEO is paid. Why do you think they do it? In part, there's a financial incentive. People expect nonprofits to somehow do things that are not in their motivating self interest. These folks have spent decades of their life leading their non-profits and still don't have a pension to rely on. You want to get mergers in this industry? Then buck up and understand what it takes and treat us no differently than the for profit sector to get those mergers to happen. The real reason why the industry is fragmented is because of how the funding works: it keeps most people scratching around like chickens for crumbs to just maintain their organizations at status and just pay the bills and the payroll.

What advice do you have for your 1% peers who look at what you’ve done and want to build something that gives back while using their skill set rather than only write checks?

It is individual. I'm on one end of the spectrum. I decided to go from running a business that I happened to make money from to deciding I'm not going to look at accruing capital as one of the driving forces. I actually still like building businesses but I'm one end of the spectrum. I think each person has to figure out the great dial of life between giving and taking. It's okay to take. It's okay to be selfish. I wouldn't be doing this today had I not been financially successful because I was at a stage in my life where I didn't come from means and I needed to provide for my own children. It's okay to be selfish and it's also okay to start to dip your toe in the water of 'how do I start to give back?'

There is more money in this country than there are capable executives to steward and cultivate those dollars from a donation point of view. We have a forty trillion dollar intergenerational transfer of wealth. There is a lot to be done. 

Can you offer tangible ways?

There's a huge need for good quality board members to treat those organizations and give them the time and the discipline that they need and an increasing opportunity to mentor and coach. Spend time with these organizations.

They can get involved civically. I sat on the Board of Education for five years. It was one of the best educations I could have ever imagined in civics and democracy and I appreciated what it's like to run a school system with a million children and 70,000 teachers and 400-off districts. You don't want to stand on the sidelines and throw stones at the system. You want to get involved. Pick your area. Make a commitment and get involved, whether it's with time or money or serving in a civic capacity. Join a local board, whether it's a city or school or whatever. I think each one of us, if you have the opportunity to serve should give back.

Ask the question: Where do you want to have impact in your life and how do you want to have impact? Draw a circle around those for whom you are responsible. You start with a partner, children, family or maybe you draw your arms around a larger community. And how would you do that? And why would you do that? Imagine if each one of us took one person who wasn't in a nuclear family and put their last name on that person metaphorically and you said, 'I'll care for, support, love and help you like you had my last name.' The world would be different. 

How do you mentally bridge the gap between your financial security and the people you're helping?

I have no apology or excuse for the fact that I was fortunate in business and don't need to or want to hide that from students. Often there are students at my house every week for dinner. You see graduates come over to my house and we're straight with each other. They know they can ask me any question they want. If they want to talk financially, I'll be straight with them. In return, I'm going to ask them questions as well and I expect them to be straight with me. There's an egalitarian nature that we both respect one another. I would never judge you. I would ask you don't judge me. You're trying to build relationships based on an authenticity, a curiosity, and a healthy mutual respect that is really independent of socioeconomics.

I don't think I'm perfect at it. I think I'm striving to be better and better at that every day. I'm learning as much as I can but I'm sure that that at the core reduces any difference, or perceived difference, between who I am and whom I serve.