On April 12, Community Action Partners (CAP) of HBSAB (the Boston area alumni club) convened a keynote and panel discussion at HBS on New Paradigms in Nonprofit Fundraising and Marketing.

Addressing an overflow crowd of over 100 alumni and nonprofit practitioners, renowned social entrepreneur and author Dan Pallotta gave a thought provoking keynote address on the structural disadvantages nonprofits face in fundraising and marketing that constrain the sector’s ability to produce large scale impact. Drawing off of his hugely popular Ted talk, Dan walked the audience through ways in which the nonprofit sector is inherently handicapped as compared to the for profit sector in five key areas: 

1. Society’s ideas on appropriate compensation for nonprofit leaders

2. Misconceptions about nonprofit investment in overhead – including advertising and fundraising

3. Little appetite for risk in pursuit of new ideas, particularly risk in fundraising initiatives 

4. Limited capital to invest in an idea upfront to get it to scale - i.e. no runway, must show dollars primarily flowing to the “cause" from day one 

5. No well-developed capital markets or growth/risk capital available to the sector

Pallotta argues that as a result of these limitations, our culture is constraining nonprofits from achieving transformative impact. He spoke of his work training nonprofit boards to develop “a pragmatic and conscientious alternative to the culture of financial deprivation and constriction that they often find themselves upholding.”  He also spoke of his work with the Charity Defense Council and Advertising for Humanity to transform the way donors think about impact and strengthen the fundraising power of high performing nonprofits.

Following the keynote, a panel of nonprofit practitioners moderated by HBS Social Enterprise Initiative Director Matt Segneri shared their real-world perspectives on fundraising, risk taking, and the challenges that result from misconceptions around overhead and unrestricted funding. Asheesh Advani, CEO of Junior Achievement Worldwide, spoke of the importance of identifying your organization’s true assets, and urged nonprofit executives to identify and clearly communicate to donors the value of unrestricted funds versus restricted funds for their organization. For example, Asheesh estimated that unrestricted funds are four times as valuable as restricted funds to Junior Achievement’s impact. Karin Cassel, Director of Development for Caritas Communities, spoke of the challenges of fundraising in a small organization with limited resources, and of the critical importance of building personal relationships when raising donor support. And Leslie Pine, Managing Director of The Philanthropic Initiative, spoke of working with donors to achieve the right balance of “heart and mind” in giving – finding a philanthropic cause that speaks to your heart and your personal values but also produces real, measurable impact. 

A lively discussion followed the panel, with the audience trading ideas on innovative ways to finance nonprofits including social impact bonds, Direct Public Offerings, and flexible capital coming from sources like the Omidyar Network and the Chan Zuckerberg Initiative.  The audience also discussed how alumni can advance a large-scale shift in how the social sector operates. Matt Segneri encouraged those who serve on boards and other leadership roles in the sector to push beyond incremental change and to advocate for new ways of thinking about risk taking, overhead and investment in fundraising. Many participants stayed long after the program had ended to continue the discussion with their peers. In short, it was a truly compelling evening that left the audience thinking about big changes in how social enterprises think and do business.

Amelia Angella (MBA 2001) is the Executive Director of Community Action Partners (CAP), which is a volunteer organization of Harvard Business School and Harvard Kennedy School alumni helping Boston-area nonprofits apply management skills to their business challenges. A program of the HBS Association of Boston, CAP marshals more than 100 HBS and HKS alumni volunteers each year to serve a select group of Boston area nonprofits. This year, CAP volunteers are working with 13 nonprofit clients on pro-bono consulting engagements for approximately eight months. Alumni also volunteer with CAP Brainstorms, one-night sessions for nonprofits to discuss a specific challenge. To learn more about volunteering or if you know of a nonprofit that would benefit from our services, visit the CAP website at www.cap-hbsab.org.

¹“The Bolder Board Training”, www.bolderboard.com