New Profit Inc.

Inspirational alums: The Social Enterprise Club recently caught up with Alexander Packard (HBS 1997) to get his perspective on his move from the for-profit to the non-profit sector and the challenges and rewards he has experienced in his transition.

Harbus: Can you please tell us about yourself?

AP: I graduated from HBS in 1997 (the first ever Section J) and returned to my previous employer, The Advisory Board Company in Washington, DC. There I ran new product development for a division of the company that we took public (now Corporate Executive Board – NASDAQ listing: EXBD) and subsequently remained with the parent company until it went public (The Advisory Board – NASDAQ listing: ABCO). Toward the end of this period I spent two years working with the founder of the Advisory Board, David Bradley (HBS ’77), to build a high-end niche media/publishing business. I also ran advertising sales and strategy for The Atlantic Monthly. I joined New Profit in August 2002.

Harbus: What made you decide to join the non-profit sector? Was your goal to be involved in the non-profit sector formulated over many years or did this ideal crystallize post-graduation from HBS?

AP: In the ten years since graduating from college I found myself spending increasing amounts of time volunteering in the non-profit sector, and over this period I was gradually moving from a broad scattering of non-profit interests to deeper involvement with fewer organizations. In 1999 I joined the Board of Directors of a promising non-profit in Washington that provides food and other services to homeless men and women. Almost immediately, I found myself passionately involved in many aspects of the organization’s growth: building a stronger Board, fundraising, developing performance metrics, hiring and retaining great talent, etc. I realized the huge impact that my professional experience could have in helping a relatively small organization grow and succeed, and how much I could learn along the way. As my involvement grew more significant I started to wonder if it was possible to combine my years of experience growing an entrepreneurial business with my passion for having an impact in the community. A friend and mentor connected me with New Profit Inc., a Cambridge-based venture philanthropy firm that helps social entrepreneurs bring their innovations to scale on a national level. At New Profit, I found an incredible opportunity to join visionary entrepreneurs who are deeply passionate about big, system-changing ideas, and who have developed a model that brings the financial and non-financial resources that non-profits need to grow and become sustainable.

Harbus: How does your HBS experience help you as a professional within the non-profit arena?

AP: The great takeaways from HBS are the tools that allow you to look at a complex situation, identify the key issues, think creatively about crafting a strategy, and then access the people and resources needed to succeed. These tools are honed by the (repetitive!) nature of the case studies at HBS, but more importantly by the learning setting where students share their thinking with professors and peers who give brutally honest feedback and bring a wide variety of alternative perspectives. In my current role, the value of my HBS experience is reinforced by the broad range of areas of expertise that I need to possess – from marketing to strategy and from finance to organizational behavior.

Harbus: What were the challenges you faced moving from the for profit to non-profit sector?

AP: I can immediately think of three challenges I’ve identified since starting to work in the non-profit sector, all of which are structural, and all of which can be conquered.

The for-profit sector benefits from a wealth of resources and strategic thinking that has never been replicated in the non-profit world. For example, there are few thought leaders in the sector that have never fully addressed the question of what a non-profit organization needs to grow to scale, to maximize social impact, to measure performance, and to ensure sustainable, diversified sources of funding.

In addition, the capital market for non-profits is upside-down: organizations with greater need often get more funding, while the high-performing “winners” are often deemed “too successful” to qualify for additional funding or resources. Is this the way great investors have supported the growth of the most enduring for-profit companies? Our sector needs a range of types of social investors who provide financial support for non-profits at various stages of their growth, and who reward innovation, impact and success.

Finally, my experience is that many (but not all!) funders of non-profits spend more time worrying about the inputs than the outputs. An example of this would be a funder who will make a grant to support a new program at an existing non-profit but will not pay for an existing program or for overhead. Subject to this thinking, determined non-profit executives will invent many new programs to receive funding, but will starve their organizations of the talent and support systems necessary for success because few funders will pay for these things.

Harbus: What advice do you have for any graduate from HBS that intends to get into the non-profit sector either as a founder or in a management position? What do you now know that you wish you did when you made your career transition? What would you do differently of you could go back in time?

AP: The most successful social entrepreneurs I know bring the same aggressiveness, determination, goal-orientation and courage to their work that you find in for-profit CEOs. But the difference is that these folks need even more courage because of the odds that are against them, and the failures of the current system to support non-profit growth. I encourage other HBS graduates to think seriously about applying their skills and experience to the sector, but in a way that creates meaningful results and lasting change, and by committing themselves (rather than playing) in the field. Two examples of this are Rob Waldron and Gerald Chertavian (both HBS ’92), CEOs of Jumpstart and Year Up, respectively. They both left the for-profit sector after very successful experiences as CEOs of high-growth companies, and have chosen to use their experience and talents to run organizations that improve the lives of young children and young adults in remarkable ways. To do this, however, it takes real passion and a strong sense of the moral imperative to use your education, access to resources, and skills to improve the world around us. The bottom line is – don’t be risk averse! If you have a passion for having the kind of social impact that is changes lives, don’t wait – it only gets harder to make the transition.