For some MBAs, stints at nonprofits come first

Stanley Omosa admits that his situation ”turns around the normal model.” The Kenyan-born graduate of Harvard Business School is not spending his first post-MBA year at a bank or a consulting company. Instead, he is working at a small nonprofit organization across the street from South Station.

By D.C. Denison, Boston Globe Staff

The nonprofit, the Initiative for a Competitive Inner City, also turns around the normal model. Founded by Harvard Business professor Michael Porter, the ”world’s most influential business thinker,” according to a 2002 Accenture survey, the ICIC is dedicated to helping disadvantaged communities succeed by exploiting ”the competitive potential of inner cities.”

If that sounds like a B-school-style ”market-based solution,” that’s because it is. Porter founded the ICIC in 1994 after the Weld administration asked him to research competitive economic strategies for Massachusetts. Challenged to make his theories work for Boston’s downtrodden urban neighborhoods, Porter discovered four competitive advantages inherent to these types of communities: strategic location, local market demand, growth opportunities via integration with the regional economy, and availability of labor. The ICIC, with a current staff of 33, is dedicated to exploiting these advantages.

That’s where Omosa comes in. Omosa chose to spend a year at ICIC because ”I wanted to have experience operating on both sides: profit and nonprofit,” he said.

He pursued the job through the ”Service Leadership Fellows” program at the Harvard Business School, which encourages and supports recent HBS grads who want to work in the nonprofit and public sectors. The program donates the difference between what a nonprofit can pay, and the normal starting salary for a Harvard MBA graduate. In a typical case, the HBS fellowship program might kick in $40,000 toward a first-year MBA’s $80,000 salary. Sixty members of last year’s class competed for nine nonprofit positions.

Other top business schools are also encouraging nonprofit careers. Professor John Vogel has been teaching a popular course in nonprofit management at Dartmouth’s Tuck School of Management for the last five years. Stanford and Yale are also known for their emphasis on nonprofit organizations.

Consulting groups are getting in on the act as well. The Boston Consulting Group and PriceWaterhouseCoopers both work with the ICIC, for example, and Tom Tierney, former worldwide managing director for Bain & Co., started the Bridgespan Group in 1999, a Bain spinoff, to focus on nonprofit consulting.

Nonprofits, quick to seize an opportunity, are also recruiting business school graduates. Anne Habiby, co-executive director of ICIC, admitted that she keeps a sharp eye on the market.

”Two years ago, it was impossible to attract a recent MBA,” she said. ”We were competing with starting salaries of $150,000 or above for banking or consulting. But in this economy, everything changes. We have a better chance now to bring in very good business school graduates.”

According to Habiby, ”freshly minted MBAs” are particularly difficult to recruit because they usually emerge from business school heavily in debt (a two-year, top-of-the-line business school education can cost up to $120,000).

The soft job market, however, is making even heavily leveraged MBAs consider jobs with nonprofits. Habiby also finds recruits among MBAs who are five years out of business school and trapped in unfulfilling jobs.

According to Habiby, MBAs often discover that there are valuable lessons they can learn at a nonprofit.

”One of the strengths of nonprofits is that they have honed the political campaign mentality,” she said. ”When a nonprofit launches a campaign, they are usually very focused, on message, and they can move legislation.

”Many businesses are now trying to learn that `campaign mentality,”’ Habiby added, citing a group like CityYear as an example of a much-envied nonprofit.

Of course, as Omosa pointed out, most MBAs eventually end up working on nonprofit projects – but later in their careers, as they sit on boards, and have more time for community events. Many senior business leaders also typically spend 30 to 40 percent of their time working with various government and social agencies. That’s not new.

What is new is that, as Omosa said, the ”normal model” is getting turned around, and MBAs are starting their careers, rather than ending them, in the nonprofit sector.

D.C. Denison can be reached at [email protected].

http://www.boston.com/dailyglobe2/335/business/For_some_MBAs_stints_at_nonprofits_come_first+.shtml