Wednesday, August 14, 2013

A story from the Ivey Impact Day: Influencing MBA's to think differently.

Guest Blogger: Cory Tanaka, MBA Candidate 2014
President, MBA Fundraising and Corporate Social Responsibility Club
Ivey Business School, Western University

The day was not without challenges, with 33°C temperatures and sauna like humidity more than 60 of my new friends lugged kilos of mulch and equipment through fields of prickly bushes. Despite the conditions, there were smiles all around as we freed young saplings planted last season from the choke of this year’s overgrowth. It was Ivey Impact Day, and “impact” was on everyone’s mind as the entire MBA class dispersed among non-profit organizations in London to donate their time and energy to the community. Across several organizations, including Reforest London where I was working, the class contributed 400 hours of service but the benefits reached beyond the immediate help we provided.

(Other organizations that benefitted from the student's work was: The London Food Bank, Unity Project, Habitat for Humanity and Mission Services.)

While many of the students had volunteered in the non-profit sector prior to doing their MBA, the general consensus among them was that working on the front lines greatly enhanced their understanding of the issues our community faces. Furthermore, the day’s work demonstrated that there are many opportunities for them to use their knowledge and energy to help the non-profit sector, where there are fewer resources to handle the problems that private sector managers face with regularity.
The lead up to Ivey Impact Day was made more meaningful by Chris Moss from Pillar Nonprofit Network who came to Ivey and delivered an incredibly insightful speech that deeply affected our perceptions of how non-profit organizations are managed. Her challenge to the students was simple on the surface; how to define “overhead” in a non-profit? 
(source of challenge was derived from: Dan Pallotta's Ted Talk)

Overhead is a common term used to define all expenses incurred outside the provision of services or the cost of goods given away. I am very familiar with this term from past volunteer experience in the health sector where our organizations performance (and funding) was tied to how low we kept the overhead percentage. When Chris pointed out that fundraising expenses are considered overhead the problem became clear; how can we grow services without investing in the fundraising infrastructure to grow the revenue that pays for those services? 

In my previous job in the private sector, I worked on many projects that were implemented because the revenue they generated was greater than the costs incurred. This is how private sector organizations grow. But if the hurdle for the not-for-profit sector is that a fundraising project has to generate enough revenue so that the organization’s overhead ratio does not increase then our perceptions of “overhead” are causing us to turn down many opportunities that could greatly increase the net cash flow to the non-profit sector and its ability to provide services. We need to rethink how we evaluate these organizations to consider the total impact rather than how they perform on an accounting metric.  

After putting in hours of sweat equity in uncomfortable conditions we felt a renewed sense of energy that can only come from serving others. Among the students surveyed, an overwhelming 97% of felt that Ivey Impact Day was germane to the MBA program. If the same proportions of tomorrow’s business leaders attribute the same relevance to corporate social responsibility within their own organizations then I have high expectations for the impact the non-profit sector will have in the future.