MBAs Lift Non-Profit Sector

From the Financial Times:

By Sarah Murray
July 28, 2008

When discussing the social sector, Bill Drayton, founder and chief executive of Ashoka, a non-profit organisation that promotes social entrepreneurs, remembers the sector 25 years ago.

“Salaries were pathetic, smart people would avoid it, it was disorganised,” he says. “That’s all gone. We’ve been catching up and once you go from non-competitive to competitive, organisations have to join in the party or they’ll be eaten alive.”

As many non-profit organisations strive to make their operations more professional, a growing number of their employees are choosing to take an MBA.

“We are definitely seeing more of them in the part-time MBA programme,” says Liz Livingston Howard, associate director of the Centre for Non-profit Management at the Kellogg School of Management, at Northwestern University in the US. “There’s been a statistically significant increase in the past 10 years.”

In the past, executives seeking qualifications that would help them in the non-profit sector headed to policy schools or took programmes in education or non-profit management. “Now a lot more people are going the MBA route,” says Mel Ochoa, who graduated from the NYU Stern MBA programme in May and heads the marketing department of Achievement First, a charter school organisation in Connecticut and Brooklyn.

Mr Ochoa says this is because of the new requirements of non-profit organisations. “They’re changing their attitude towards the people they want on staff,” he says. “They want a lot of the skills you learn in business school, such as strategy and finance – and they want those applied to their non-profits.”

Lara Galinsky head of strategy at Echoing Green, a US foundation that provides seed money and support to young social entrepreneurs, agrees. “An MBA is a coveted staff person,” she says. “In the non-profit field, we’re good generalists or we come with degrees in public policy or non-profit sector management – but we’re not steeped in traditional business skills. A business school student trained in a traditional curriculum is value added for us.”

Part of the reason more non-profit organisations value business school education lies in the changing nature of the donors that fund their activities. Many of the new generation of philanthropists made their money in business, rather than inheriting it, and look for the same rigorous standards of professionalism and accountability in the charities they fund.

“When you get people with that kind of business savvy, they don’t want to just write a cheque, but they want to change the nature of public education or global health,” says Nora Silver, director and adjunct professor at the Centre for Non-profit and Public Leadership at the Haas School of Business, in Berkeley, California. “Then the philanthropy looks very different.”

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