Inside the Promise

As is his style, Jeffrey Romoff wanted to get to the point. “So, how much is it going to cost?” the charismatic and sometimes acerbic president and CEO of UPMC, the region’s largest employer and dominant health care provider, asked in a Bronx accent still evident after 35 years in Pittsburgh.

It was 7:50 a.m. on Aug. 20, 2007, in a small conference room at UPMC headquarters in Oakland. Romoff, 62, had just listened patiently to two of the region’s other major institutional leaders — Pittsburgh Public Schools Superintendent Mark Roosevelt and Heinz Endowment President Maxwell King — outline their proposal for the Pittsburgh Promise.

If its proponents are to be believed, the Promise, which pledges to pay up to $10,000 a year in college scholarship money to every eligible Pittsburgh Public Schools graduate, could end up doing what six decades of civic leaders could not: Reverse the population decline of a city and school system still trying to find its legs after decades of economic pummeling.

The weight of that possibility hung over Roosevelt, 52, a Washington, D.C. native, who first came up with the idea two years earlier. And now, at the moment of truth, when he finally had The Big Donor ready to listen, this great-grandson of President Theodore Roosevelt couldn’t get the words out of his mouth.

King, 63, another transplanted East Coaster, jumped in.

“$100 million,” he said directly. There was a palpable pause in the room, but Romoff, whose not-for-profit organization has 44,000 employees and $6.8 billion in revenue last year, was unfazed.

“Well, that’s a sizeable sum,” he told them.

Romoff later recalled that the massive request — which is believed to be the second largest charitable donation to a public primary school system ever — made him feel “engaged.”

It would be almost four months before the Promise would become a reality, but King was confident right then and there that Romoff, his interest confirmed, would make it happen.

“I know Jeffrey Romoff enough to know that he likes big ideas,” King later recalled, “and he saw this as a big idea.”

Big idea or not, the Promise’s first large donation — it still needs up to $150 million more to function in perpetuity — nearly came apart more than once. There were several crises, before and after that August meeting, any of which might have tripped it up.

In the end, the Promise came to be because of a mix of fortitude, serendipity and plain old hard work. Along the way, several specific moments formed the path to approval, including a Starbucks meeting, a handshake pledge, a two decade-long friendship and some sage advice.

But, ultimately, it came down to a combination of UPMC’s desire to bolster a public image, which had taken some hits, and fulfill the mission it sees for itself as the leader of a 21st century economic wave that is replacing 20th century Pittsburgh’s faded industrial might.

“From our point of view, the Pittsburgh Promise, though not directly related to health care, is directly related to the wellbeing of this region,” Romoff said, “and ultimately to building a base here that we can all be proud of and that will create, once again, a future for Pittsburgh.”

Origins

Like school officials all over the country, Roosevelt learned with envy in November 2005 about the great social and educational experiment that was beginning in Kalamazoo, Mich.

Anonymous benefactors pledged full college scholarships, regardless of family income, to Kalamazoo graduates, to invigorate the struggling town that lost about 5,000 residents between 2000 and 2005, to 72,000.

At the same time, Roosevelt was two months into his new job as Pittsburgh’s superintendent and was in the process of closing 22 schools in a city that was losing residents even faster than Kalamazoo, at a rate of nearly 4,000 per year.

“Closing 22 schools is the moral equivalent of hell or something like that; you’re inflicting pain on people,” said Roosevelt, whose accent has the flavor of Boston, where he spent most of his adult life, including time as a progressive state legislator with a focus on education.

“That didn’t bring the Promise home to me as much as it did, ‘Oh, my God, somebody’s got to do something to stop the bleeding population in Pittsburgh.’”

He talked privately with people about the Promise over the next 10 months. But it was a conversation Oct. 2, 2006, at the Holiday Inn in Oakland with Mayor Luke Ravenstahl, then in office for just a month following Bob O’Connor’s death, that helped convince Roosevelt to move forward.

“We had breakfast, just to get to know each other, and I brought this up with him and he just jumped all over it, he was so enthusiastic about it,” said Roosevelt.

Ravenstahl said Roosevelt had mentioned it to him in passing a few days earlier and “it was a no-brainer once I had an opportunity to consider it.”

They talked about it some more, had their staffs do preliminary research, and “then did something I must admit one could question, and many did, which was announce our intention to do it publicly,”

Roosevelt said. That came, with much public fanfare, on Dec. 13, 2006, including a pledge to have money in place to begin paying for scholarships starting with the class of 2008.

No answers

As hopeful as their joint press conference was, Ravenstahl and Roosevelt — and the Promise — began absorbing criticism even before the public announcement was made. A few days earlier, Ravenstahl and Allegheny County Chief Executive Dan Onorato met with foundation community leaders and brought along Roosevelt to give a preview of the Promise.

“I remember after the politicians left everyone talked about the fact that it was a funny way to drop the Pittsburgh Promise on the foundation community,” King recalled. “They didn’t have any answers to most of our questions. It made me unsympathetic to their proposal. I was very negative about the Pittsburgh Promise.”

But a few months later he ran into Roosevelt and “I clued him in that I was negative about it, and we agreed to meet,” King said.

They went to the Starbucks on Craig Street in Oakland and talked for 90 minutes, with Roosevelt pulling out demographics he had started to accumulate to make his case.

“Mark Roosevelt made a convincing case for me that to improve the school system would not be enough if these demographic changes went as fast as they were going to go,” King said.

Roosevelt now had a powerful and persuasive ally, whose insights would become more valuable than he knew.

Make your case

About a month later, on May 17, 2007, King joined Roosevelt and his chief of staff, Lisa Fischetti, to meet with Romoff and other UPMC officials.

After meeting with Roosevelt a year earlier to talk about another, much smaller project, Romoff wasn’t looking forward to it because nothing had come from the prior meeting. Though he said he liked Roosevelt’s smarts and rough-and-ready personality, Romoff warned Roosevelt in the meeting: “Talk about something specific, let’s follow up on it, and let’s do it.”

King and Roosevelt talked, in general, about several ideas they hoped UPMC might be able to help the Pittsburgh Public Schools with, leaving the Promise for last.

“It was the walking-out-the-door kind of thing. They sort of handed us a package and said, ‘This is something we’re thinking about,’” recalled Sandra Danoff, UPMC’s senior vice president and chief communications officer, who was at the meeting.

As general as it was, King, who knew Romoff well from their years together on the executive committee of the Allegheny Conference on Community Development, thought he “saw a spark in his eye.”

But while the three powerful, East Coast transplants were trying to read the tea leaves, the friendship of two native western Pennsylvanians made sure the message wasn’t lost.

After the meeting, Robert Cindrich, 64, UPMC’s general counsel and a Washington, Pa., native, called his longtime colleague, Ira Weiss, 59, Pittsburgh Public Schools solicitor and Clairton native, to pass on a message.

“I said, ‘You know, Mr. Romoff has great respect for Max King. He does think highly of Superintendent Roosevelt.’ I said, ‘If you get Max King behind this, get him to endorse and support it. And Sandra wants to see facts and figures, numbers, projections, substance. Don’t just come in with an idea, get some work done,’” recalled Cindrich.

Weiss immediately passed Cindrich’s words on to Roosevelt. The message “enabled the parties to frame where there would be common thinking,” Weiss said. “We needed that.”

Planning

Over the next three months the statistics Roosevelt gathered through his staff and consulting firm, McKinsey & Company, ensured that he had his argument spelled out when he approached that first big donor — something he knew he needed.

“The one thing everybody smart said to us was, ‘OK, maybe you can get this done, maybe you can’t, but if you are going to, you’ve got to get some big player in a big way,’” Roosevelt said.

He had spoken with a host of other large companies and institutions in Pittsburgh to gauge interest. But he hadn’t asked anyone for a specific amount of money, as he was preparing to do with UPMC.

Three days before the meeting with UPMC on Aug. 20, 2007, King and Roosevelt discussed their approach. King convinced Roosevelt to double the requested amount to ensure that it grabbed Romoff’s attention.

As King reminded Romoff at that Aug. 20 meeting, Romoff had come to speak to the Heinz Endowments board two years earlier and encouraged them to make fewer small grants and focus instead on something big.

“It was a sufficiently bold stroke. The way this was done, this was a Max King invention. It was sufficiently gutsy, and sufficiently straightforward. There was a certain defiance,” Romoff recalled with admiration of the Aug. 20 meeting.

As excited as he was, Romoff couldn’t give final approval. Before it was done, he’d have to run it by UPMC Chairman G. Nicholas Beckwith III and the full board.

The idea also needed to be analyzed and made to fit a business model that jibed with the health-care giant’s culture, incorporating accountability and measures to gauge its impact over time — in short, Romoff said, “we UPMCed it.”

Danoff’s staff would do the rigorous internal analysis, focusing on how similar programs had worked in other cities and whether it could really help Pittsburgh.

At one point, her questions about the Pittsburgh Public Schools became so pointed that Roosevelt called her to ask: “Are you opposed to the Pittsburgh Promise?”

She explained she was just doing her due diligence, but those answers, plus the findings from Kalamazoo and elsewhere proved to her that the Promise was worthwhile.

“In these cases, there was significant evidence that kids who would otherwise not get a secondary education, actually did get secondary education, that the schools became stronger, which meant that more people moved into the community,” she said.

It was enough for the UPMC board, which approved creation of an agreement Oct. 18, 2007.

When he was first told how much UPMC was being asked for, Beckwith recalled: “I think I probably said, ‘That’s a hell of a lot of money’ and I probably laughed about it. But I think we all thought if this was going to be effective, it was going to take significant money.”

Slip-ups?

But while the board had approved the concept, school and UPMC officials watched as the city’s mayoral contest between Ravenstahl and his Republican opponent, Mark DeSantis, heated up.

Though few expected DeSantis to win, he was generating the kind of buzz in the city Republicans hadn’t seen in eons. Part of his strategy was to point out that Ravenstahl had yet to make any headway on the Promise. The only donation so far had been $10,000 from the Pittsburgh Federation of Teachers.

After Roosevelt and King had secured Romoff’s initial support in August 2007, Ravenstahl visited with Romoff in his office on Sept. 6 to express his thanks and support.

Romoff left him with a warning that if Ravenstahl ever leaked that UPMC was considering a $100 million donation, the effort would be “stillborn,” and UPMC would pull the offer off the table.

Ravenstahl, who, at the time of the meeting was the same age, 27, that Romoff was when he first moved to Pittsburgh, gave the UPMC boss a handshake pledge that there would be no leak from his office. He held to the pledge.

“His stock went up in our eyes because he kept his tongue when it would have benefited him to say, ‘Hey, we’re moving,’” Cindrich said.

Time was also preying on Roosevelt. He had promised to have the Promise up and running in time to pay out the first scholarships — just $5,000 per person this year — for the class of 2008.

“We didn’t have any more time left, and we either had an announcement in December or we were already close to having to say to this year’s class, ‘Sorry, it’ll apply to next year’s class,’” he said. “And then, the expression ‘Broken Promise’ comes very quickly to the media’s lips.”

Finally, on Dec. 5, the 35-page agreement was reached and the announcement was made at a school press conference, complete with a band, much to Romoff’s chagrin, who hates splashy affairs and almost didn’t come.

But that wasn’t the end of the tumult.

Almost two weeks after the announcement, the city and schools announced they had also agreed to give UPMC a potential $100 million property tax break, if UPMC’s property was ever taxed.

The outcry was venomous, with calls of “back room deals” and threats of not approving the Promise.

“There you were, you finally got it announced, you’re happy, you’re thrilled, it’s been six months in the works, and that happens. That was tough,” said Roosevelt.

Cindrich was called down to appear before the city council and was lambasted. After deciding to go ahead with the donation, at least in part to quell public outcry over UPMC’s $618 million “excess margin” profit earlier in 2007, being made out as the bad guy now was too much for Romoff, who thought the whole dispute might destroy the possibility of any other Promise donations.

“My feeling was, we put $100 million on the table, the community comes in and says, ‘What are we going to do now, give it to the fat cats?’” he said.

He was prepared to pull the plug. But after mulling it over Christmas weekend, he decided Dec. 26 to withdraw the tax break request and move forward with the donation.

Why the change?

“It was the same thing that convinced me to do it in the first place,” he said. “This resonates with a lot of things about this community. You can’t be great unless you actually think you’re great. It’s a good start. And this community is much greater than it thinks it is. This is a transition from the old to the new.”