Nonprofit's success has B-school wheels turning

By D.C. Denison, Globe Staff, 7/26/2003

Business school professors are an opportunistic group, quick to attack new phenomena with the standard battery of analytic tools: strategic, financial, and marketing. If it makes money, the B-school set wants to know what makes it tick. So we shouldn't be surprised that an event like the Pan-Massachusetts Challenge has found its way into business school classrooms. Now in its 24th year, this two-day August bike-a-thon from Sturbridge to Provincetown (Aug. 2-3, this year) now attracts more than 3,300 riders and 1,900 volunteers; last year it brought in $15 million in donations for cancer care and research at Dana-Farber Cancer Institute and its Jimmy Fund. This last data point, in particular, is what grabs the attention of the business school profs and MBA students.

"Social entrepreneurism" is the most common name used to describe organizations like the Challenge. Whatever you call it, the field is growing. Babson College in Wellesley, which specializes in entrepreneurship, has been bulking up its offerings in the "social" sector. The school now offers three such courses: an overview of social entrepreneurship, "environment entrepreneurship", and "nonprofit management." Billy Starr, the founder of the Challenge, has addressed a number of classes at Babson; his organization has been the subject of a major student study; he even received an honorary degree from Babson in 1998.

Harvard Business School has also made a commitment to social entrepreneurship, with its Initiative on Social Enterprise. Stanford University Business School runs an influential Center for Social Innovation, which "informs, shapes, and accelerates a growing movement aimed at bringing general management, entrepreneurship and social science to the social arena."

At this point the definition of social entrepreneurship is still evolving, but it's definitely on a different track than the feel-good "cause marketing" of Ben & Jerry's or The Body Shop. It's much more than simply responsible environmental practices and a percentage of profits to charity. The connection means harnessing the latest entrepreneurial techniques to social goals.

Contemporary social entrepreneurs include Dr. Verghese Kurien, who founded a project that revolutionized the dairy industry in India; Michael Brown and Alan Khazei, founders of City Year, and Muhammad Yunus, the father of the "microcredit" movement in Bangladesh.

J. Gregory Dees, professor of social entrepreneurship and nonprofit management at the Fuqua School of Business at Duke University, attempted a comprehensive description of the field a few years ago. According to his definition, social entrepreneurs play the role of change agents in the social sector by resolving to create and sustain social value (not just money, in other words); by recognizing and relentlessly pursuing new opportunities to serve that mission; by engaging in a process of continuous innovation, adaptation, and learning; by acting boldly without being limited by current resources, and by exhibiting a heightened sense of accountability to the constituencies served and for the outcomes created.

Billy Starr, who founded the Pan-Mass Challenge 24 years ago, takes a far less academic approach to the topic. When I spoke with him last week, just 10 days before the start of this year's bike-a-thon, he was down-to-earth about the event's success.

"The most essential element is the human connection," he said. "You've got to be able to communicate a vision, get people involved, and then deliver the credibility.

"There's really no mystery involved," he continued. "Our success is the result of a convergence of event programming, bicycling, credibility, repetition, and the economy. You also have to love the process, because that's what it's about day after day. And even with all that, it took me 10 years to make this a major event . . .It's really not very theoretical."

Of course nothing seems theoretical 10 days before a major event. But, in fact, an increasing number of business academics think there's plenty to teach about the field. Business school students dealing with a tough job market are also more inclined to target nonprofits as a place to flex their new MBA muscles.

Kate O'Halloran, associate director of the Arthur M. Blank Center of Entrepreneurship at Babson College, will be riding in her sixth Pan-Mass Challenge next week. She believes that today's business students have a lot to learn from the model.

"Anybody who participates in the Pan-Mass Challenge appreciates the tremendous, tremendous organization involved," she said. "It's operations, marketing, logistics, financial rigor -- everything you learn at business school.

"For business students and entrepreneurs there used to be a major difference between for-profit and nonprofit," she said. "That line is definitely blurring."

D.C. Denison can be reached at denison@globe.com.