On Monday, I attended an excellent presentation by James Weinberg, the founder and CEO of Commongood Careers, an talent search firm for the nonprofit sector. The presentation was primarily geared toward career advice for us students, but it also provided some interesting insights about the industry as a whole. For example, did you know that there are 1.4 million nonprofit organizations in the US alone, employing a tenth of the domestic workforce and controlling $2.9 trillion in assets? That is some serious market power. Another big theme of the talk focused on the sector-to-sector convergence taking place: nonprofits are becoming more like for-profits, while the for-profit sector is adopting many of the mission imperatives of nonprofits. The combination of the two factors above is creating a tremendous leadership vacuum in the nonprofit sector, because the rise of corporate social responsibility (CSR) and for-profit social enterprises is draining much of the talent that might otherwise have gone to nonprofits. That’s good news for us, but perhaps not so good for the organizations we’ll end up working with.
It seems that, as MBAs, our primary challenge will be to convince potential employers that we really do care about the mission (something that Alex Chu, the excellent MBA admissions guru, warns about as well). While respecting their acumen in operations and management and knowledge of best practices, nonprofits tend to view MBAs with some suspicion, fearing unrealistic salary demands and elitism. I suppose I don’t blame them, although it appears that this factor is greatly reduced if the applicant has previous experience working for nonprofits.
I asked James about the arts getting short shrift in umbrella nonprofit services because of their unique position in between the nonprofit and for-profit sectors. He agreed that the arts often take a back seat in donors’ hearts to priorities like education (strong #1) and the environment. Another factor he mentioned that I hadn’t really thought about is that arts organizations often have difficulty achieving a certain scale. His company, and indeed many institutions across the nonprofit sector, primarily deals with mid-size to large organizations (i.e., budgets of $1 million and above). Obviously, major symphony orchestras and art museums clear this hurdle easily, but the great majority of the arts organizations out there slip under the radar.
Apparently, though, there are some risks being taken by venture philanthropy firms. Venture philanthropy has redefined expectations around management and social return on investment, making it “okay” to invest in infrastructure, for example. I know very little about this field, but what I’ve read so far has me very intrigued. I’ll be exploring some of these ideas as they relate to the arts in future posts.