Brandee McHale on How Citi Foundation Is Shifting its Giving to Meet Global Challenges
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Brandee McHale, head of community investing and development at citi and president of citi foundation.
Brandee McHale is both head of community investing and development at Citi and president of the Citi Foundation. She is a seasoned professional in corporate philanthropy and the private foundation world, having served two years as a program officer at the Ford Foundation, focused on efforts to increase financial inclusion and asset building. She also recently stepped down as the chair of Living Cities, a collaborative of 19 of the world’s largest foundations, which aims to close the racial wealth gap.
In her role at Citi, McHale oversees the charitable and impact investing activities of one of the wealthiest and most powerful corporations in the world; it’s the third-largest banking institution in the United States, one of the big four that dominate the sector. Corporate giants carry their own controversies and criticisms — challenges far more daunting than those typically faced by a Ford or Rockefeller Foundation.
Nevertheless, McHale brings to the task a fresh perspective on the institution’s responsibility to the community, and how corporate philanthropy should fit within Citi’s profit-driven mission. The result has been a suite of perhaps surprisingly progressive initiatives and an embrace of forward-thinking grantmaking practices you might expect from a much smaller private foundation.
In 2020, for example, the bank and its launched Citi’s “Action for Racial Equity,” pledging $1 billion to help “close the racial wealth gap” in the U.S. In 2021, Citi Foundation gave $112.8 million, including $500,000 in unrestricted grants to each of 50 nonprofits providing technical assistance to small businesses run by people of color that were trying to keep afloat during the pandemic.
In 2022, the foundation launched a $10 million Strengthening Community Leadership Initiative, which gave $1 million each over two years to established Black civil rights groups such as the Lawyers Committee for Civil Rights Under Law and the NAACP, along with Asian-Pacific, Latino and disability rights organizations. Last year, it also announced the recipients of a $50 million Community Finance Innovation Fund, awarding 12 nonprofits working to support community development and asset-building in low-income communities.
This year, however, Citi broadened its horizons. It announced a Global Innovation Challenge focused on alleviating food insecurity around the globe, which will give 50 nonprofits $500,000 each over two years.
In an in-depth, wide-ranging interview, McHale explained the ways Citi’s philanthropy has changed over the years, responding to the cataclysms of the past few years, and stressed the importance of long-term and flexible support for nonprofits. McHale’s responses have been edited for length and clarity.
How has the foundation changed over the past few tumultuous years after the pandemic, the murder of George Floyd, the war in Ukraine and the extreme weather events caused by climate change?
It has shifted how we work. It’s not as though there was any one specific event. It was a series of events, and a recognition that while we used to think about our crisis response as a one-off, something that we did in response to an external event, I began to realize the volatility is just ongoing, and it’s coming in all different forms. There are a whole host of ways that society and communities are experiencing volatility.
It made us realize that we have to think about, not just what we fund, but how we work, because in a volatile environment, you need to be adaptable, responsive and more nimble. We’ve had a huge transformation in our grantmaking process, moving from a traditional program officer model, where we go out prospecting and developing relationships with a range of NGO partners, to primarily open-source grantmaking through open requests for proposals. We also recognize that the issues are more connected. We really want to look at communities as a whole because our mission at the Citi Foundation is to promote economic opportunity and progress. What does it take to improve household and community financial health? You’ve got to be able to work on a variety of fronts.
What prompted your new focus on food insecurity around the globe? How does that align with Citi’s corporate and philanthropic mission?
Food insecurity is the first issue area we’re selecting for what is really a big shift in our grantmaking, the Global Innovation Challenge. We wanted our philanthropy to be more responsive to current trends. Every time we issue a new challenge, the theme will shift. We began to see how food security is no longer just a developing country issue. We see it right here in our backyard in the U.S., where food prices have increased and families have to make tradeoffs with their household budgets. It is no longer just a health and nutrition issue; it’s an economic issue. Also, access to food has become increasingly strained due to things like the war in Ukraine.
This is an open global RFP, and we do grantmaking in 80 countries. When we issued an open call for ideas, we knew we were going to receive many, many more applications than we could possibly fund. In fact, we had over 1,000 interested NGOs in what was ultimately 50 grants. But we thought it was important for us to adopt a new way of grantmaking that we see as more transparent and equitable. If we continue to fund organizations that we know, that are in our networks, we really limit the ability of emerging entities and ideas to really come to the table. So this was a way for us to open up our portfolio and do it in a more transparent way.
This new approach also recognizes the importance of nonprofits. You don’t just fund projects. We’ve got to invest in the financial health of NGOs themselves. They both are safety nets in times of crisis, but also provide launchpads for economic opportunity. We have to make sure they have the flexible dollars and the capacity-building support they need to continue to scale their efforts today and evolve for tomorrow.
You commissioned research that concluded that longer-term grants, over five to seven years, are ideal. Is that something you will be moving toward?
We can’t just think about social change happening in nice 12-month budget cycles. I wish it were that simple to make an impact. We’re moving through this process in stages. Global Innovation grants are over two years. This is all part of piloting a new way of working. But we have another U.S. program, Community Progress Makers, where we are extending the grant period into three years and doubling the size of the grant award from $500,000 in core support to $1 million over three years. That is directly in response to the research we helped develop, what we’re hearing from experts, and from listening to our grantees. That reflects what the philanthropic sector calls trust-based philanthropy.
How do you measure your impact? Some of your programs are focused on housing affordability in urban neighborhoods in the U.S., including Washington, D.C. I live in the D.C. area, and as you know, in this region, the homeless numbers seem to be growing. How do you track the money you’re giving, and does it sometimes seem daunting to make a dent in their problems?
It is a daunting task. There’s no one single foundation or institution or company or government that’s going to move the needle on their own. We’re big believers in trying to drive collaboration, to understand what works, so that we can collaborate with others on things that may be most effective. When I think about impact, for me, it’s really that we lead with influence. How are we raising up the strong work of our grantees? How are we bringing other stakeholders to the table to understand what works and to collaborate together, and spark additional innovation? We think that foundations that are best in class and making the strongest advances are ones that see themselves as not just funding change agents, but are change agents themselves.
Who are your major partners in this work?
I just stepped down as board chair of Living Cities, one of the longest-standing philanthropic collaboratives in the U.S. But I’m increasingly excited about the tables that are being set for collaboration that include philanthropy, the private and public sectors, all coming together, asking, “What is the North Star that we’re all working toward, in our unique ways? How do we better coordinate what we’re doing?” One of the most exciting examples of this is the new U.S. Economic Opportunity Coalition, spearheaded by the Biden-Harris administration. We’re now collaborating not just with other banks, but other members of the private and public sectors, as well.
How do you make the case to Citi that this philanthropy is important to its bottom line?
There was a time in the past decade where there was a very strong focus on corporate foundations trying to link what they do to brand-building value. We actually don’t focus on that here at Citi Foundation. More importantly for us, as a global institution, we’re in the business of helping develop solutions for our core bank clients, but not for our profit-making clients, but for our community stakeholders where we do business. Being able to demonstrate how we are helping to build and curate the marketplace of social innovation is much, much more important. Being able to show how we are investing in our nonprofit grantees and that they are stronger is really a driver for us. And it really aligns perfectly with how we evaluate ourselves as a bank, working with our core clients and consumers.
So you view your clients as the communities, both and rich and poor, in the places where Citi does business, with the idea that if your work benefits people who want to buy a home, or need job training, or help with basic needs like access to food, it creates a better economic climate that also benefits the bank?
Absolutely. Poverty, wealth inequality are trends that don’t create strong economic environments. What we really define as success is if we can use our resources to make the economic case for why moving the needle on social challenges matters. A great example of this is our work on racial equity and addressing the racial wealth gap. After the murder of George Floyd, we asked what we can do to address racial injustice here in the U.S. This can’t be just writing checks to organizations. What are some of the root causes of the persistent racial wealth gap? For every dollar a white household has, a Black household has 10 cents. This is not just a social challenge, it has real economic implications. For example, in Washington, D.C., we have strong nonprofit change agents that understand these issues and trends.
Can you single out this idea of being an influencer?
In D.C., we’ve brought in the Urban Institute. Historically, Urban has been known as a think tank and a research institute. One of the things Urban does is make data available to local nonprofits that Citi funds to help them understand what is happening in their communities. That’s the kind of grantmaking we want to do here at the Citi Foundation, which is at the very local level, making sure that there are services available and supporting innovative ideas, like our work in food security. But it’s also working with influencers, like the Urban Institute, to help invest in their ability to be much more effective, and to see themselves as not just reporting on what's happening, but really themselves evolving into change agents, and helping to amplify their impact by working with smaller, local entities.
That may sound like a very simple thing, but when you’re on the ground, really working with real people in real places with real needs, it is not so easy to step back and to have the time and space to think strategically about your organization and your community. So we partner with Urban Institute and other technical assistance providers so that the grantmaking we do is more than philanthropy. We want to give them access to subject matter experts to support them in their work today, but think about tomorrow. We also bring grantees together.
Despite all the philanthropic work you’re doing, Citi’s hundreds of billions of dollars in financing of fossil fuel companies has drawn the ire of many environmental groups. There’s even a drive to get Costco customers to drop their Costco Citi card. Does that facet of Citi’s business make your job harder?
One of the contributions philanthropy makes is to support dialogue. Philanthropy helps us to create bridges and to curate the marketplace of ideas that are actually going to help all of us move forward toward those goals that we want to achieve. For us at Citi, we are committed to helping lead the transition to a low-carbon economy, we do have net-zero commitments and have made great progress on those commitments. In addition to leading the Citi Foundation, I also have the honor of leading our impact investing work, investing in for-profit innovators focused on climate resilience and in climate tech companies.
We wouldn’t be good philanthropists if we weren’t listening and learning. We engage in dialogue with a whole variety of stakeholders, and personally, I appreciate the fact that there’s a big spotlight on this issue. No matter what the tactic is, we have stakeholders coming at this with different approaches. But we’re all in this in our own different way to try to drive toward a more sustainable planet and economy.
