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Thursday, March 5, 2009

The Impact of the Bolivian Transportation system on Non-profit seeking MBA's

When people ask me why I applied to an MBA program, I sometimes say that it's because I missed a bus in Bolivia. This makes me sound mysterious but it's actually true. I wound up spending the day with a Peace Corps Volunteer who was going to get a dual MBA-Masters in Social Work degree with plans to start an international adoption business. I personally want to run a psychiatric facility and thought that was a perfect degree combination for what I wanted to do.

I never finished the Masters in Social Work due to their unwillingness to view this degree as anything other than a competition with the business school. I also realized that the MBA would provide me with the opportunities that I needed. I never wound up running that psychiatric facility either as I realized that it's much better work in general health care setting but be comfortable working with the psychiatric department.

This Slate.com article discussed the combination of an MBA and non-profit work. The article pointed out that MBA program are very much in tune with corporate social responsibility and the non-profit world with resources like the Aspen Institute. Another commenter provided the following advice of 1) Non-profits are not inherently noble but just tax exempt, 2) For profits aren't necessarily models of efficiency and business virtue just because they pay taxes, 3) Skills and match are important. In general, the question of whether it is best to get an MBA to improve a non-profit or just work in the non-profit and skip the MBA is a case by case decision.

The people mentioned in the Slate article start in the business world and/or use the MBA to transition to non-profits but I actually went the reverse direction. I was a Peace Corps Volunteer and taught knitting in psychiatric facilities but wanted to get an MBA to improve the industry of international knitting in a mental health setting. Instead, I left that career path and the non-profit world to become an evil insurance guy. Here is what I learned along the way:
  1. There are some really incredible non-profit opportunities for MBA's: These opportunities are what drew me away from the Social Work program. There were just some incredible positions that took the non-profit work to a new level. There was international health development work with John Snow, Inc., social venture capital (it even sounds cool) with Roberts Enterprise Development Fund , foundation work like with Pew Charitable Trusts, non-profit consulting with Community Wealth Development and the list goes on. It made the institutional social work choices just pale by comparison to work to create, build, and fund organizations. The competition for these jobs was surprisingly intense. A track record with non-profit work and top MBA were minimal requirements as some pretty talented consultants and bankers would take these positions.

  2. An MBA is an octagon shaped peg in the non-profit world but it still fits: About 33% of MBA course work falls under finances that focus on the stock market in some form or another whether it be debt:equity ratios, P/E multiples, or valuation. None of these things will ever be used in the non-profit world. I made myself take Advanced Corporate Finance just so I knew the difference between a P/E multiple and a PE gym class but I could only sit still for 30 minutes stretches. With this coursework, many probably correctly wonder if they should pursue a Masters in Public Administration or other type of more publicly focused degree program. Ultimately, I would say an MBA is a better option because 1) at least you understand the financial sector and the mystique or lack there of it, 2) an MBA can work in the non-profit or for-profit world so you have more flexibility, and 3) non-profits are looking for someone who can understand a business framework as they understand a public administration framework. Sitting (or in my case not sitting) through a few finance courses is worth it. It does bring a new approach that you can adopt to suit the non-profit management challenges.

  3. Network: I am predisposed towards networking and am one of those people who really doesn't mind small talking nor working the room. With the new magic word being public/private partnerships, the MBA helps you reach out to the private sector.

  4. Culture Shock: You don't need to go to another country to experience culture shock. I had MBA classmates humbly ask me what poor people do and how they survive in the US. Likewise, I asked my classmates what the big deal was about this Private Equity stuff and if there were hedgehogs at hedge funds. There were also 1/3 of my classmates who were doing some kind of nuclear finance that I did not interact with. They didn't want to hear about how I wanted to funnel pharmaceutical company profits into clinics for the uninsured and I didn't appreciate how they were probably creating Credit Default swaps or other types of derivatives that got us into this financial mess.
In summary an MBA can be transitioned to an effective degree for the non-profit world, but there really is a cultural transition process. I do thank the Bolivian transportation system for helping me find this career path.

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