When the Wharton Social Impact Initiative program began five years ago, people didn’t really … get it.
“When I first started, the first emails coming my way were, ‘Here’s a coat drive, it must be what you do. Here’s Toys For Tots,’” said Sherryl Kuhlman, managing director of WSII. “They couldn’t envision what it could have been because the models were philanthropy, volunteerism, maybe corporate social responsibility, but no understanding of some of the increasing complexity.”
That complexity has been at the heart of WSII’s development over the past five years. Previously, Wharton students’ nonprofit consulting work consisted of building a strategic plan for some ailing organization — “There was always this sense of, ‘Here’s this weak nonprofit, we can come at them with our business sense and we can help them,’” Kuhlman said. But WSII chose to focus its students’ effort on impact investing, which employs a market-based approach to raising capital for social programs.
“It’s not that we said ‘Nonprofit was bad,’ we said, ‘There’s a niche here of using capital for making these things happen,’” Kuhlman said. “That’s what our students respond to a lot.”
It’s a shift that makes sense for the market, too: Over the past few years, philanthropy has become more entrepreneurial. Still, there are prejudices that need to be erased before more people jump on the social enterprise bandwagon — such as the stigma of capitalism.
There’s a “middle ground,” Kuhlman said, between nonprofit and for-profit organizations, and that’s the sweet spot of social impact. But for social impact to work, those on each side need to change their perceptions of the other.
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“When you’re talking about measurement and accountability, [social work students] automatically go, ‘Business is bad, you’re trying to take this over,’” she said. “There’s this sense that what we [in the social sector] do is complex and meaningful and important, and you guys make widgets and you’re telling us what to do?”
“It’s about using finance, capital, all those tools,” she went on. “The same minds that created derivatives, let’s get them thinking about other ways they can use money and capital flow and stacks to make good things happen.”
That’s the difficult thing about social impact — encouraging the business-minded to also be socially minded, and vice versa. WSII is “agnostic” about the tax status of the organization enacting social impact because at the end of the day, it’s about what works — an attitude that echoes that of a certain philanthropic managing trustee.
“Coming from an academic background, we can only do so much talking,” she said. “At some point, we just have to do something.”
It looks like people get WSII nowadays: While it’s not a formal academic track, Kuhlman said that the program typically hires 50 to 60 students, and about twice that many apply. About 250 students, or one-third, of each fall’s MBA class attends an info session about WSII each fall — numbers that reflect “the strong interest at Wharton and Penn for understanding the role of business in making the world a better place.”-30-
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