Foundations Need MBAs

Forget about business being the root of all evil. Today, more and more non-profit organizations are realizing that good stewardship requires someone at the helm with business savvy.

An article published yesterday in the Financial Times, Building on MBA Know-How, finds that as the foundation sector looks to become more accountable and effective in allocating their grants, they are increasing their hiring of business school graduates and sending staff on MBA or executive programs.

More forward-thinking organizations have dropped the academic model that once guided them to embrace an approach shaped by the idea that social or environmental problems require the combined focus of different sectors ”“ including business, reporter Sarah Murray writes.

Mark Kramer, managing director of FSG Social Impact Advisors, which advises foundations, corporations, governments and non-profit organizations, identifies a new wave of foundations that are instead focusing on promoting change through advocacy and helping non-profits become more effective.

“All these things require organizational and management skills, budgets, business plans,” he says. “And that is a very different way of thinking from that old approach, which said you just needed the idea and everything would fall  in place.”

MBA programs are also changing with the times, as more schools now offer a variety of electives in areas such as non-profit management and social entrepreneurship, making the training more attractive for foundation executives. FT highlights departments and centers for public and non-profit management exist at schools such as Haas School of Business, Kellogg School of Management and Yale School of Management.

Meanwhile, the research and educational programs of centers such as the Kenan Institute at Kenan-Flagler Business School focus on how private sector resources can serve the public interest. And Stanford Graduate Business School runs a course on strategic philanthropy through its Center for Social Innovation.

Professor Nora Silver, director of the Center for Non-profit and Public Leadership at Haas School of Business, explained the details of a fellowship program forged through a partnership with the Packard Foundation, in which an MBA graduate participates in courses and development programs at both Haas and the Packard Foundation.

“From the foundation’s perspective, they want more diversity in the foundation world ”“ and not just ethnic or gender diversity but diversity of thinking and skills,” Silver says.

“My hope is that this will also enlighten the foundation as to what the MBA has to offer.”

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