MBA Programs

Philanthropy Gains Eager Followers in B-Schools


When Laura Arrillaga-Andreessen first started teaching a philanthropy course at the Stanford Graduate School of Business in 2000, she quickly discovered she was a pioneer in the field. There were just a handful of case studies on the topic and few, if any, teaching materials, she says. As a result, it took her about a year-and-a-half to design the curriculum for it.

Ten years later, the landscape has drastically changed. Arrillaga-Andreessen has since published 25 case studies about philanthropy. This fall she will publish a book entitled Giving 2.0, which she hopes will serve as a resource for students engaged by the topic. Interest in her class has surged at Stanford and she now offers an undergraduate course, too. Says Arrillaga-Andreessen: “Almost every year, I’m oversold.”

She’s not alone. Today, dozens of MBA and undergraduate programs teach philanthropy as an academic subject, exposing students to both the art and science of giving. Some schools—including Stanford, Columbia Business School, and the Boston University School of Management—teach entire courses focused solely on the topic, while others weave philanthropy into the curriculum of social-enterprise courses. The topic appeals to business students because many may wish to serve eventually on the boards of nonprofits or become philanthropists themselves, professors at those schools say.

According to the Aspen Institute’s most recent Grey Pinstripes report, a biannual survey of business school education, 36 of the world’s business schools now offer philanthropy-related courses. The movement has also taken off at the undergraduate level. According to Campus Compact, a national coalition of universities and colleges that promotes civic engagement, there are approximately 100 courses offered across the country on the topic. Many classes give students a set amount of money that they can donate to local nonprofits in their community, says Maggie Grove, a special-projects consultant for Boston-based Campus Compact. This makes them popular with students and many have wait lists, she notes. “Students are embracing it because it is active learning,” Grove says. “Students want opportunities that allow them to make an impact in their community.”

Volunteering and Funding, too

The Ohio Campus Compact office runs the U.S.’s largest university philanthropy program, Pay it Forward, a federally funded service-learning program offered on 33 college campuses in Ohio, Michigan, and Kentucky. Every course selected to participate in the program receives a certain amount of money—for the past two years, $4,500 annually; students spend the semester determining how to award the money to local nonprofits and devoting at least 15 hours volunteering at one.

Business students have been keen to participate in the classes. In the 2010-11 academic year, more than 34 percent of all students participating in the Pay it Forward program were business majors. Thirty of the 74 courses offered were either in business or in business-related fields such as grant writing or leadership, says Pay It Forward Project Director Kirsten Fox. Together these courses contributed about $137,00 and more than 12,000 student-volunteer hours to nonprofit groups.

“How many business students are out there hoping to be the next Bill Gates?” Fox says. “These things are exciting to them because they see them happening outside of academia, but they can make it happen in the classroom.”

That was the case for Kelsi Fawley, 21, a business major who took a class called the Principles of Management last spring at Otterbein College, a private, liberal arts school in Columbus, Ohio, that received one of the $4,500 philanthropy grants from the Pay it Forward program. Fawley belonged to a team of five students who spent the semester advocating that funds go to nonprofit Equine Assisted Therapy, a therapeutic riding program for youths with disabilities.

“I Was Totally, Emotionally Involved”

Fawley’s business skills came into play when she was asked to review the nonprofit’s financial strengths and weaknesses. The team noted that about 83 percent of the program’s funds derived from fundraising, grants, and other contributions and that the shaky economy had forced the organization to operate with fewer horses and employees in recent years. After making a presentation in class, Fawley and her team procured $1,100 for the organization. The money will support 10-week sessions for eight students, she says. Fawley is spending this summer working as an unpaid intern at a local nonprofit that works to find affordable housing for low-income families.

“Usually when you do a project for school, you write it at 2 in the morning before class, turn it in, and you are good to go,” Fawley says. “But with this assignment, I was totally, emotionally involved.”

In Nancy Lahmers’s undergraduate honors seminar at Ohio State University’s Fisher College of Business, students spent a year researching how to give away the $4,500 they had been allotted by the Pay it Forward program. They researched 100 charities that focus on youth and education, analyzed their federal tax filings, and evaluated the quality and financial health of the charities through such organizations as the Better Business Bureau. When students put out requests for proposals (RFPs) they were flooded with dozens of requests from nonprofits seeking a portion of the money. The students ultimately voted to put most of it into an after-school program in Columbus called Directions for Youth & Families, stipulating that the funds be used to hire a dance teacher to keep students active and energized after school.

Keen Competition for Funds

“The students were amazed at how competitive it was,” Lahmers says. “We had $4,500, which is not huge in the world of philanthropy, and it showed how much those nonprofits really wanted that money.”

The experience of giving money away to a nonprofit or charity while in college appears to wield a long-lasting impact on students, according to a 2010-11 survey of students who participated in the Pay it Forward Program. For example, before taking the class, 41 percent of students said they planned to give money to area nonprofits. After they completed the course, that number climbed to 64 percent. The proportion of students who said they were more likely to volunteer or engage in philanthropic activities through their lives rose from 48 percent to 73 percent after they took the class.

MBA students are also eager to become better-educated, savvier philanthropists, says Kristen McCormack, faculty director of the Public & Non-Profit Management program at the Boston University School of Management, where she has been teaching a course on the topic for the last decade. During the last four years, a group of students in the course have been charged with the task of giving away $10,000 to a local charity. The funds were initially provided to the school by Campus Compact and more recently, by local donors. This year’s class decided to give all its money to a group called Medicine Wheel Productions in South Boston, a nonprofit that works with troubled youth via public art projects.

“They need to figure out ‘how much good can I do with this money,’” McCormack says. “It is a very strategic kind of question that involves their business skills.”

A “Hands-On” Generation

In the last few years, interest in philanthropy and fundraising classes has grown as more business schools emphasize ethics and corporate responsibility in the curriculum, McCormack notes. As a result, more students are interested in serving on the boards of directors of nonprofit groups and in giving away a portion of income to charitable organizations. At the same time, the number of new family foundations is on the rise, she said, as more students want to learn how to make an impact with their money. “This is a generation used to being hands-on,” McCormack says. “They want to have a direct impact.”

At Columbia Business School, Melissa Berman, president and chief executive officer of Rockefeller Philanthropy Advisors, a nonprofit that advises donors on multimillion dollar philanthropic projects, has been teaching a class for the last four years, called Strategic Philanthropy. During the half-semester course, Berman teaches students about the structure, governance, and function of philanthropic investing—from donations to dual-purpose investments, as well as strategies for personal philanthropy and corporate philanthropy projects. Guest speakers this spring included representatives from the Bill and Melinda Gates Foundation, the Ford Foundation, and the New York State Attorney General’s Charities Bureau.

For one assignment, students are asked to devise a “philanthropy road map,” the same tool Berman uses when she works with Rockefeller clients to help them identify what issues they care about and how they plan to allocate resources to philanthropic causes over the course of their lives. Katherine Szostak, who took the class in 2010, says the exercise helped her sharpen her philanthropic goals, which include making an impact in education, health, and women’s rights issues. “It really drills down into your belief system and helps you discover what you believe is an effective strategy,” she says.

One of Berman’s students in the course, Joanne Greenstein, a 2009 Columbia MBA graduate, was able to secure a job after graduation at Rockefeller Philanthropy, where she now works as a philanthropic advisor. The class helped her get a holistic view of the philanthropy field, she says, and as a result, she feels more effective at her job. “We were exposed to so many different individual philanthropists and foundation staff,” Greenstein says. “It just gave me a taste of what I would be doing later.”

Join the discussion on the Bloomberg Businessweek Business School Forum and follow @BWbschools on Twitter.

Damast is a staff writer for Bloomberg Businessweek.

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