Matt Stephenson felt conflicted when he quit his Goldman Sachs job at the inception of the financial crisis about a decade ago.
The coveted Wall Street analyst job included covering mortgage-backed securities, which critics say contributed to the global economic collapse. “I started my career in investment banking at Goldman. I loved the work,” says Stephenson.
But upon leaving the industry and seeing markets and economies crash, he “felt close” to the crisis and wanted to do work that makes a positive impact on society. “The only way [the 2008] crisis was possible was through mass complicity,” says Stephenson, recognizing the role his prior profession played in the crash.
An MBA degree helped him make a fundamental career change to the education sector, first as a teacher but today he is a social entrepreneur.
He graduated from the University of Pennsylvania’s Wharton School in 2011 and, in 2016, founded the nonprofit organization Code2College. It connects minority and low-income high school students in Central Texas with engineers at technology companies, such as Google and IBM, who voluntarily teach the kids how to code.
Like many MBA graduates who work in social impact, Stephenson was motivated by how satisfying and worthwhile it can be. “Some of the most rewarding parts of my day are seeing students learn from a volunteer from an organization which they may live 10 miles from, but would never have thought they could work at,” he says. “A lightbulb goes off and they can see themselves in these roles.”
For many MBA graduates, for whom the memories of the Great Recession are still vivid, working in the “social impact” sector is appealing as a way to use their business management skills to make a difference.
MBAs prioritize ‘impact’ over financial rewards
A survey of 1,500 MBA students by Bain & Company, the consultancy firm, found that 66 percent of women and 59 percent of men planned to prioritize “impact” over financial rewards in their careers.
“In part, it’s a generational thing,” says Erin Worsham, executive director of the Center for the Advancement of Social Entrepreneurship (CASE) at Duke University’s Fuqua School of Business. “These students were raised in a society where they have exposure to many social issues that are prevalent though social media and 24/7 news networks, so there’s more awareness of them.”
According to annual polls by the advisory company Deloitte of millennials — those aged between 18-35, a time when people typically do an MBA — 83 percent believed corporations should make positive societal or environmental impact a priority, not only maximizing shareholder return.
Gauging how many MBA graduates work in social impact is difficult because it is possible to put purpose above profits in many industries that do not fall under the sector’s definition, such as finance.
Fuqua alumna Beth Bafford, for example, is vice-president for syndications and strategy at Calvert Impact Capital, a nonprofit investment firm helping underserved communities access capital markets.
Having previously worked in the public sector, she discovered “impact investing” at business school between 2010-12. “It is a perfect setting to learn more about yourself, the industries you’re interested in, and how to apply your skillsets to work for good,” says Bafford, adding that she met a former Calvert CEO at Fuqua.
She worked a stint at consultancy firm McKinsey & Company on graduation, however. Bafford explains that she wanted to see how the private sector operates, rather than pay off student debt in a lucrative industry, as some MBA graduates do before switching to social impact. “I believe that any major global challenge has to be solved with the participation and engagement of all three sectors — public, private and social,” she says.
Alumni stories such as Bafford’s are common, according to Worsham. “When I pursued my MBA [at Stanford between 2003-05], impact was a narrow field consisting mostly of nonprofit or government work,” she says. “Students still pursue those paths, but there is diversification. They can pursue impact in so many different ways.”
This MBA wants to eradicate poverty in Peru’s Andean region
Marta del Rio Villanueva spent a decade working for global brands such as Burger King and American Express after getting her INSEAD MBA in 1991.
But she then returned to her native Peru and founded the snacks business Wasi Organics with an INSEAD MBA alumna, in 2013. Its products, packed with “superfoods” that are high in antioxidants such as cacao or quinoa, promote health and wellbeing.
Del Rio Villanueva aspires to eradicate poverty in Peru’s Andean region by sourcing locally grown foods, integrating farmers’ associations into her supply chain.
She says: “I wanted to do more. I had this theory about what type of businesses will last. I wanted to prove that a business can have an impact on society, on the environment and turn a profit. And I also wanted to pave a path for young entrepreneurs in Latin America.”
The INSEAD MBA gave her the confidence, tools and network she needed to build the social enterprise that works with 500 families and plans to reach 10,000 by 2023.
“This is by far the most challenging job I ever had,” Del Rio Villanueva says, explaining that she manages a myriad of functions simultaneously. “It is anything but boring.”
Her advice for those who also want to do well by doing good is: “Whatever you choose [to do], make sure you have the purpose, the passion, the skills, and your own definition of success.”
But social impact work pays less than some other career paths
One challenge for MBA graduates is: social impact work tends to pay less than traditional career paths, though many say the trade-off is that it’s rewarding in other ways. At Wharton, for instance, those working in the social impact industry last year earned a median annual salary of $96,500, compared with $150,000 in consulting, and $130,000 in both financial services and technology, according to the school’s own reporting.
Fuqua addressed the problem, offering students financial awards, for example “full-ride” scholarships covering tuition and other MBA costs, and stipends worth up to $15,000 to pursue summer internships with impact, says Worsham. “We help our students pick the career they have the most passion about regardless of what the financial implications are.”
Back at Code2College, Stephenson says the Wharton MBA has been “invaluable” to the non-profit organization’s fundraising effort, as it seeks to expand from 250 admitted students in 2018 to 1,000 in 2019.
“I took negotiations with Adam Grant and his course has categorically improved my approach to relationships,” he says, explaining that he shifted from a transactional approach to a relational one. “I attribute my ability to secure over $30,000 during our first fundraising push thanks to Adam Grant,” he adds.