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The Non-Profit Paradox

Food Bank ThumbnailThe reality for many of the nearly 1.5 million non-profit organizations in the U.S. is balancing the need for innovation and service with the realities of funding a charitable mission. Unlike a traditional company, non-profits operate without a capital market to provide the financial resources for delivering and scaling ideas to a marketplace.

Nurturing the ideas that allow a non-profit to flourish in the same manner as a corporation requires an understanding of the confluence of vision and management. This was the self-imposed mandate reflected in a recent Tepper Pro Bono Consulting Program, through which five Pittsburgh-based non-profits evaluated the pro bono consulting services of MBA students.

A joint effort between the Tepper School’s Consulting Club - usually focused on corporate consulting projects - and the school’s Net Impact Club, the event, the semester-long program identified the non-profit sector as an equally challenging arena for leveraging strategic insights.

“It has really picked up a notch,” acknowledges 2009 MBA candidate Sujit Naik, who helped to organize the teams along with Cindy Au, also a 2009 MBA candidate, and Guy Levit, MBA 2008. “It was more structured this year to start, and the scope of the projects was much broader.”

Organizers solicited proposals from Pittsburgh-based nonprofits in the fall, narrowed the submissions down to a list of eight to 10 projects, and then asked students to rank their top three choices. Ultimately, five organizations were selected: the National Aviary; the Greater Pittsburgh Community Food Bank; the Pittsburgh Technology Council; Earthen Vessels Outreach; and One Kind Word. Teams of four to five MBA students were assigned to each, and at the end of the semester, gave presentations to the nonprofits.

“All of them were really well-received,” says Naik, who is concentrating in strategy and marketing at the Tepper School, having come from the semiconductor industry, where he worked as a manager in research and development. “There was a lot of good discussion between the projects as well. It gave a good forum for the community members to learn from what others were doing.”

Each project involved a slightly different approach. For example, the National Aviary needed help with a business strategy for its plan to build an open-air theater: Potential revenue sources, the feasibility of offering food service, and the considerations for incremental revenue via specific special events. The Pittsburgh Community Food Bank focused on operations management, examining ways to become more efficient so workers would not have to decline donations. Earthen Vessels, an after-school outreach program focusing on youth and children, needed a three- to five-year business plan to facilitate its transition from affiliation with a faith-based organization to an independent agency. One Kind Word — which offers training for child abuse intervention by employees of family-friendly locations — needed a clearly defined product statement and positioning in addition to a marketing plan and pricing strategy.

The Pittsburgh Technology Council, which was the organization with which Naik was involved, sought benchmarking and organizational behavior research. Toward that end, the team used The Seven Measures of Success as its template for analyzing the council, which is in a period of transition with a new CEO.

“It was an excellent opportunity to get real-world learning from the concepts we gain in school,” says Naik. For example, having learned about focus groups and other market research techniques, the team at the Technology Council interviewed 25 people ranging from veterans to new employees at all levels of the hierarchy in order to elicit opinions on how the council was functioning. Based on that data, the team then drafted recommendations for the organization. One team member who has taken courses in Carnegie Mellon’s School of Design helped to create a “service blueprint” for the Council.

Melissa Ungar, director of entrepreneurial programs for the Technology Council, was pleased with the team’s well-thought-out approach as well as its streamlined solutions.

“The presentation was very interactive. The back-and-forth was refreshing; we weren’t all just sitting in a room for a half an hour listening to a presentation. We were all involved in it,” she says.

In fact, the Tepper School team was “head and shoulders above” the professional consultants the council has used in the past, Ungar says.

“What they were telling us seemed to me to be very easy to implement. For consultants who’ve come in, it seemed like a long and tedious process. [With the MBA team], I felt like we could leave and go into a meeting and start planning. It was that well-defined,” she says. “I was so impressed. From start to finish, they got it.”

So what’s on the horizon for next year’s group? Naik is not yet sure how many projects they will take on, but he hopes it will be more.

“Our goal is to grow it from where it is right now,” he says. “They learned a lot from working with a real community organization.” 

Pictured:  (center) Larry Hokaj, Chief Technology Officer, Greater Pittsburgh Community Food Bank; Siva Krishnan, FlexTime MBA '09; Venkat Avunoori, FlexTime MBA '09; Arijith Roy, FlexTime MBA '09.

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Mark D. Burd

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Tepper School of Business
Carnegie Mellon University
5000 Forbes Ave.
Pittsburgh, Pa. 15213-3890

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Fax: 412-268-7824

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