During Impact Week (April 17–21, 2017), whose theme is Purpose + Profit, UCLA Anderson is highlighting stories of mission-driven careers, companies and projects that fulfill unmet needs in sectors from e-commerce to cleantech.
By Jamie Nichols (FEMBA ’18)
I’m going to go out on a limb by suggesting two ideas about the nonprofit and social service sectors: 1) There are plenty of well-intended, poorly run nonprofits whose extremely admirable missions prevent them from going under; 2) most nonprofit professionals have a chip on their shoulder about how comparably straightforward measuring value and success seems in the for-profit realm. This can lead to a near-fanatical emphasis on fundraising as a proxy for impact or to a reduction of value solely in for-profit terms (whether it be service dollars provided, units served or gross income).
So, how can we actually measure meaningful impact in the long term, and how is this reconciled with the more immediate returns promised to donors? The focus areas of many nonprofits and impact-oriented firms ― for example, education, health and the environment ― are long-term investments by design, and the ROI can take years or decades to be realized. Is it irresponsible to dismiss short-term metrics in favor of longer term faith? Is the nonprofit sector responding to poorly designed systems better addressed by the government and for-profit market?
After four years as chief operating officer of the Foodbank of Santa Barbara County, and following previous stints at nonprofits like the Harlem Children’s Zone and AmeriCorps, I applied to UCLA Anderson trying to find direction on how organizations can ensure resources are being allocated as responsibly as possible to people and places most in need of assistance. At my own Foodbank, we rescue and procure 8 million meals to serve to over 100,000 people per year. But the plurality of waste in our local landfill is food: upward of 30 percent of food produced for consumption is thrown out, and the food insecurity rate has hovered stubbornly at around 1 in 5 people in our county (the bulk of them children). What could we do better, how could we maximize our impact with limited resources, and is tallying meals and clients served the right yardstick for success?
Many of my questions have been given context in the realm of accounting, statistics and operations over the past two years at Anderson. Classes like Data and Decisions gave me the tools to evaluate how our procurement and distribution costs correlate with serving specific census blocs and populations, allowing us to pivot our resources to areas and populations less visible but in higher need of healthy foods. The solution is sometimes fewer meals provided and people served across the board, but more nutritious food distributed to populations most at risk of poor nutrition and diet-related illness. On the supply side, classes like Financial Accounting conveyed how federal deductions and state credits posed a considerable opportunity cost for farmers who tilled “cosmetically challenged” foods. By demystifying the financial incentives for donating, we’ve been able to rescue hundreds of thousands of additional pounds of food while reducing our food purchasing costs by over 20 percent over the past two years.
New classes in the Anderson curriculum like Impact Creation, Analysis, and Evaluation illustrate opportunities to engage the for-profit sector not only as donors but as partners through delegated philanthropy. Although it may be easier for a company to make a donation, take a picture and hope for the best, the for-profit sector is often the pivotal link in establishing real, lasting impact. Whereas a company like Uber may initially express interest in donating a few thousand dollars, that same investment used to subsidize drivers’ delivering meals to low-income seniors provides far more value to a community. Promoting for-profit organizations to support social causes in their realm of expertise is often a missed step in philanthropy.
Anderson’s new MBA specialization in social impact has unveiled the growing opportunity for different sectors to partner in tackling and evaluating social and environmental causes. Broadly speaking, the NGO community may be better positioned to determine the need for services and design the programs to address problems, and the for-profit sector is often better prepared to gauge risk, provide financing, apply business expertise and incentivize efficient programming. In the case of social impact investing, for-profits can also provide socially-minded firms with access to capital markets that are otherwise unavailable, which may provide more of an impetus to improve efficiency at the firm and increase funding from the investor. In the end, as long as these two sectors remain siloed ― with the corporation making a highly visible donation and the NGO left to report all the wonderful things done with the money ― the incentives and financial support for providing lasting, measurable impact are probably skewed.
UCLA Anderson has provided me the ideal environment in which to explore the space for collaboration between the nonprofit and for-profit communities, while also gleaning new approaches to better serve my own organization. I’ve been lucky to engage with professors, alumni and a student body equally interested the opportunities ahead.