Educating Michael

For 18 years in the United States Senate and 2 more on the presidential campaign trail, Bill Bradley searched for a way to keep college education within the reach of most Americans. After 5 minutes with Michael Bronner, Bradley was convinced that the economics of financing higher education would never be the same.

Bronner made a killing in the marketing business as the cofounder and CEO of Bronner Slosberg Humphrey, a wildly successful direct-marketing firm. Now the 42-year-old college dropout found himself seated in his office across from Bradley, who had come to Boston to hear about Bronner's new venture, Upromise Inc. Bronner had figured out a way to enlist some of America's largest corporations to help families pay for college. The idea was stunning in its simplicity: Every time a Upromise member buys something from a participating company, that business contributes part of the purchase price into the member's tax-deferred college-savings account.

It was so American: Spend money to save money. When an AT&T customer enrolled in the program racks up $10 in residential long-distance charges, for example, the phone company contributes 40 cents to the customer's Upromise college-savings account. ExxonMobil donates a penny for every gallon of gas. Coca-Cola passes along 3 cents for every dollar spent on its soft drinks. Citibank pitches in a dollar for every $100 purchased with a Citi credit card. General Motors adds $150 on a new vehicle purchased or leased through GM's dealers. And so on, through the ranks of America's largest companies -- McDonald's, AOL, Toys "R" Us, Borders, Century 21, Staples, Starwood Hotels -- 100 companies so far, and 7,000 restaurants.

And the beauty of it was, Bronner's program didn't require participating companies to tap new sources of capital. They simply reallocated a fraction of their vast marketing budgets to support Upromise's loyalty program. "I've been working with companies for 18 years, helping them spend billions of dollars in marketing money for one purpose -- to improve customer economics, to acquire customers at a lower rate, to keep customers who are more profitable," Bronner says. "If I could just get a small percentage of those billions to go into college-savings accounts, we could begin to change the economics of paying for college."

Bradley was impressed. He joined Upromise's board of directors and began spreading the word. "In 10 years," Bradley told his new colleagues, "we won't remember a day when there wasn't Upromise." Other luminaries saw the same potential and soon joined Bradley on Upromise's advisory board, which reads like a who's who in business and education. Among others, there's Kim Clark, dean of the Harvard Business School; Amos B. Hostetter, the former chairman and CEO of Continental Cablevision Inc. (now AT&T Broadband); George Fisher, chairman of Eastman Kodak Co.; David Rockefeller, of Rockefeller & Co. Inc.; Madeline Kunin, former governor of Vermont and former deputy secretary of education; and venture capitalist John Doerr, of Kleiner Perkins Caufield & Byers, which has invested in Upromise.

"The biggest and best transforming ventures have been simple ideas with simple strategies," says Doerr, "which have then exploded in scale to reach millions or tens of millions of customers. Upromise has that kind of potential."

The Mission Is the Company

Upromise is an unusual hybrid -- a for-profit venture with a nonprofit mission. Bronner believes that his outfit could grow fast and go public based on the fees companies pay to Upromise to generate business for them. Not that success is guaranteed. He is still chairman emeritus (and owns 12%) of his original firm, which was renamed Digitas Inc. before its IPO in March 2000 -- and which has fallen on hard times lately along with other marketing companies. But the promise of an eventual IPO by Upromise attracted $90 million in startup capital that the company needed to build credibility with big partner companies and that helped attract quality executive talent like George Bell, who stepped down as the CEO of Excite@Home in April and joined Upromise as CEO in June.

Bronner has pledged a majority of his stock in Upromise to a nonprofit foundation, with the goal of turning that nest egg into equity worth hundreds of millions of dollars for scholarships. "If I were really good, between my own previous business success and going out and hawking people, I could get maybe $100 million in scholarship money," says Bronner. "With Upromise, I can generate tens of billions of dollars of new college funding, and I can empower people to get on the road to saving."

The payoff of Bronner's approach is a business with a unique motivation to succeed. "The company is out there driving the mission in a very singular way," says CEO George Bell, "and the mission is the same thing we need to succeed. The mission is the company. I haven't seen alignment like this before at any company I've been in."