(Tracy Kaufman is a library assistant in the Foundation Center's New York library. She recently reviewed Charles Halpern's memoir Making Waves and Riding Currents: Activism and the Practice of Wisdom for PND. This is her first post for PhilanTopic.)
Plenty, I suppose, if you're trying to start or build a business. But this week the Financial Times ran an article about the growing number of nonprofit employees seeking advanced business degrees. It's understandable why the FT would be upbeat about the trend, but should the rest of us?
Bill Drayton, the much-admired head of Ashoka, the pioneering social entrepreneurship nonprofit, sums up the sector's bad old days thusly: "Salaries were pathetic, smart people would avoid it, it was disorganized. That's all gone. We've been catching up and once you go from non-competitive to competitive, organizations have to join in the party or they’ll be eaten alive."
It's true that many nonprofits are operating more efficiently than they used to, but Drayton sure doesn't sound like he's giving the sector much credit if he's saying that in order to be "better," nonprofits must act more like for-profit businesses. (And that "smart people" line? Ouch!)
While the Financial Times suggests that a not-for-profit boasting a few MBAs has a distinct advantage over peer organizations without MBAs on staff, a 2007 study from Community Resource Exchange and Performance Programs, Inc. found that nonprofit leaders actually outperformed for-profit leaders in 14 out of 17 leadership practices, including things like participation, persuasiveness, openness to feedback, and demonstration of effectiveness. Could it be the typical nonprofit is every bit as well led as the typical for-profit, even without MBAs? (Click here to read a Q&A with Jean Lobell, the author of the study.)
The nonprofit and for-profit worlds serve very different purposes, so it's not a leap to suggest that they require different types of employees characterized by different modes of thinking, much in the way that psychology distinguishes between left-brained and right-brained people. In the for-profit sector, regardless of one's chosen profession, at the end of the day it all boils down to a single concern: profit. As long as the business is turning a profit, an employee really doesn't need to worry about much else.
In the nonprofit world, in contrast, that concern is all-but eliminated. As a result, nonprofits tend to be more welcoming to flexible, creative, out-of-the box thinking. A formal education in business may be vital for one sector, but whether it's really the best thing for the other is open to debate.
Don't get me wrong, higher salaries and increased professionalism in the nonprofit sector aren't bad things. But to suggest that what nonprofits really need to be effective is a couple of MBAs and more business discipline strikes this nonprofit employee as, well...beside the point.
What do the rest of you think? Do nonprofits need to think and operate more like business? Is there an MBA in your future?
-- Tracy Kaufman
