B-Schools See Promise in Nonprofits

More schools are offering customized courses to teach public-sector groups and small industry associations leadership and strategy

What can 16 future Canadian police chiefs glean from an hour-long video featuring former General Electric Chairman and CEO John Welch? Well, says Bruce Herridge, 49, superintendent with York Regional Police in Ontario, Canada: "We don't have luxury of cutting bottom 10% performers," but police leaders do have to think more about strategy, leadership, and training than ever before.

The Welch video is just one piece of a four-week Police Leadership Program at the University of Toronto's Rotman School of Management. Herridge and his colleagues spend six, 13-hour days a week on campus in courses focusing on finance, strategy, marketing, and diversity. The command-team members are in line to become chiefs of police services, with up to C$70 million budgets, and see themselves as CEOs in training for ever-changing organizations. But this is their first taste of leadership development after years of police training that covered everything from ticketing to accident investigations.

The Police Leadership Program is just one example of how business schools are customizing their curriculums for nonprofit organizations. Though schools are more accustomed to working with manufacturing or consulting firms, they're increasingly moving into alternative markets. And their motivation isn't only financial: "We're learning the application of our techniques outside of the areas we usually teach," says Joseph R. D'Cruz, program director and professor of strategic management at Rotman.


  Even other educators have something to gain as B-schools branch out. At Washington University's Olin School of Business in St. Louis, about 25 grade-school principals attended a five-day Management Institute for Principals program in June, 2001. Stuart Greenbaum, Olin's dean, says the program was a way to help the local community. Indeed, St. Louis schools continually struggle to meet accreditation, so the B-school sees leadership improvements as a key remedy.

Samuel McCauley, principal of Ames Visual & Performing Arts Elementary School in St. Louis says better management can lead to big improvements in student achievement. "Principals are middle managers, and we needed management techniques for survival," he says. McCauley is also thinking more about how he markets his 450-student school to the community: "We have a lot of talent, so I'll try to look at this more like a business would and market what we do well." He wants to use the B-school training to encourage teachers to think strategically about new programs and the school's future.

Arts-program administrators could use a hand, too, B-schools say. Stanford's Graduate School of Business has stepped up its efforts to attract more nonprofits to its executive education programs. In a partnership with the National Arts Stabilization, a nonprofit arts-management organization, the school now offers eight programs for nonprofit leaders, focusing on general management, leadership, and strategy.

"Many nonprofit leaders haven't had business experience before," says Gail Bitter, associate dean and director of executive education at Stanford. "They come into the [nonprofit] business because of an interest in a particular area." After a Stanford program, held in cities such as Omaha, Boston, and Cincinnati, participants should feel comfortable talking to advisory boards in business terms. Harvard Business School offers similar open-enrollment programs on nonprofit management.


  These courses won't stuff a B-school's coffers. Since nonprofits usually lack the budgets for executive education that multinational companies have, schools that pursue such work often need to subsidize their efforts. Dartmouth's Tuck School of Business runs executive programs in the summer for minority leaders, many of whom work in government agencies and nonprofits. "We get scholarships for all of them," says Dean Paul Danos. Still, the programs are just below break even.

And not all B-schools consider work with smaller companies or nonprofits to be worth the effort, especially for custom programs. Dennis Langley, executive director of the Mechanical Contractors Association of America (MCAA), sent requests for proposals for a custom-made executive-education program to 18 business schools. Only eight responded. "That tells me they think we're a small fish or don't think we fit their profile," he says of his association of family-owned companies. Indeed, many schools say they're selective about which organizations they work with, hoping to target smaller groups where they feel they can make a difference. And working with notable nonprofits can give a significant boost to a school's reputation.

Still, the schools that choose to work with the smaller organizations say they're pleased with the results. Babson College in Massachusetts won the MCAA's contract because the school "was candid and took us very seriously from day one," Langley says. In fact, Babson will spend about 20 days visiting companies that belong to the association to learn more about the business, and administrators say the work will give them a peek into an industry they knew little about before. William Bigoness, associate dean and director of the school of executive education at Babson, says the school is too small to hesitate when interesting companies approach them: "We don't have that luxury."

By Mica Schneider in New York

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