This post was written by Taran Catania ’20. Connect with her on LinkedIn.
Whether I was working in field research for a local conservation group or serving as a legislative representative for a national environmental organization, I loved my time in the nonprofit sector. No matter where I was, I was surrounded by mission-driven people, my work gave me a sense of purpose, and I was always proud to answer the standard icebreaker “so what do you do?”
But then I left the nonprofit world – and not for the reasons you might think. The assumption when people leave the nonprofit sector to go to business school is that person wants to make more money. Now, don’t get me wrong: there are extremely good reasons the nonprofit sector should stop undervaluing and underinvesting in staff. But the short answer is no, I did not leave for that reason.
The real reason is: I was tired of fighting for change, but not seeing an obvious plan for its impact or scalability. I was tired of “doing good” by rules that limited how much good we could do. I wanted the chance to take risks for something I believed in.
During Dr. Erik Monsen’s Crafting the Entrepreneurial Business Model class, I was introduced to a TED Talk by activist and fundraiser Dan Pallotta called “The way we think about charity is dead wrong.” As Pallotta points out, nonprofits are rewarded more for not acting like businesses (such as severely restricting overhead spending – “For every dollar donated, 83 cents go to the cause!”) than for what impact they have. From inherent rules limiting nonprofits’ ability to competitively compensate staff, market and advertise to generate revenue, or access capital markets to spur growth, the nonprofit sector is at a disadvantage to the business world in almost every way.
To add further limitation, nonprofits are systematically discouraged from taking risks. Risk, which always carries some chance of failure, is a generally unacceptable use of charitable dollars. And as Pallotta puts simply: “When you prohibit failure, you kill innovation.”
In other words, there is a reason there is no “venture capital” of the nonprofit world. No one is looking to make large donations to a nonprofit that wants to take chances, invest in its own growth, and pursue unexplored, better ways to make and scale change.
But as we can tell from the growing list of Certified B Corps and the increasing buzz around Corporate Social Responsibility (CSR), the business world is evolving to pick up where the nonprofit sector leaves off. And it’s doing so with some creative, innovative risk-taking.
So until we can foster a nonprofit sector that operates under fewer limitations, fighting for social and environmental change from a business angle may offer greater opportunities to create positive, scalable impacts. (That is, as long as businesses commit to doing so meaningfully.)
In the meantime, I’ll be here reading anything written by Vu Le at Nonprofit AF, bicycle commuting in my Allbirds sneakers, and pursuing a Sustainable Innovation MBA to be a part of this business evolution.