May 5, 2014 | Read Time: 7 minutes
After four years and tens of thousands of dollars, Megan Doud, a fundraiser at the University of Michigan, received her master of business-administration degree from the institution last week.
The commitment of time and money has been worth it, says Ms. Doud, director of annual giving at the university. The experience, she says, has helped her grow as a manager and boosted her career.
Since she began the MBA program in 2010, Ms. Doud has been promoted twice and now manages a staff of four.
Fundraisers say the skills that business schools teach can help in many ways, such as in balancing a budget, talking with donors in detail about their corporations’ or foundations’ work, and researching potential board members’ ability to invest in a cause.
What’s more, an MBA can help a fundraiser become a contender for a leadership role, in which finance, management, leadership, and organizational skills are of utmost value.
‘Is It Required? No.’
But the MBA path has been lightly traveled by fundraisers so far. Many question whether the degree is worth it: The price tag for an MBA from a top-tier school exceeds $100,000, yet many nonprofit development jobs pay less than half that amount.
What’s more, recruiters say they look more at a fundraiser’s track record of reeling in donations than whether “MBA” appears on someone’s résumé.
“Is it valuable? Yes. Is it required? No,” says Maura Daly, chief communication and development officer at Feeding America, a national hunger-relief group.
In hiring fundraisers, she says, her organization is more likely to seek candidates with experience in building relationships with donors and who understand the complexity of the group’s cause rather than seek out those with an MBA. Though the organization has a few fundraisers who have the degree, she notes, it also employs “highly successful people who don’t have the degree.”
MBA vs. CFRE
And some fundraisers say the credential of a Certified Fund Raising Executive, commonly called the CFRE, which costs a fraction as much as a master’s degree, carries more weight because the skills it measures apply directly to the job at hand.
The MBA is most useful for someone seeking to run an organization, while the CFRE demonstrates to prospective employers a successful fundraising track record, says Patricia Egan, a fundraising consultant who holds both credentials.
“If you have got a good, solid skill set, if you have your CFRE and you have raised millions of dollars, and your goal is to be a top fundraiser, then I am not so sure an MBA is going to pay off,” says Ms. Egan.
Janet Glaze, major-gifts officer at All Saints Health Foundation, is proud of her MBA from National Louis University, but it will be many years until she repays her more than $20,000 in student loans.
Ms. Glaze also received her CFRE, which she says cost around $1,000.
“I feel like, bottom line, the CFRE has been more valuable,” she says.
Yet some fundraisers who have earned an MBA—like Ms. Doud, who took classes while working full-time—say the degree has indeed paid off.
“I am using things I am learning all the time in my current job,” Ms. Doud says.
In addition to scrutinizing the content of the annual fund’s direct-mail pieces to determine if the messages are meeting the right audience, she has learned techniques on how to encourage workers to collaborate.
An MBA degree has been beneficial for Leslie Graham, director of development at the California Institute of the Arts. Ms. Graham opted for the Boston University School of Management, where she got a public and nonprofit master’s in business administration.
“I wanted to stay in the nonprofit world, but I wanted to have a stronger skill set on the business side,” she says.
At CalArts, Ms. Graham wrote a business plan for a center for professional development and artist training, an idea that the institution had considered but never pursued.
The plan led to a $250,000 grant from the Hearst Foundations. CalArts has since raised more than $2-million for the effort.
Measuring Success
Despite that success, Ms. Graham says, not all fundraisers need MBAs. She thinks the degree is most useful for those raising money from corporations or foundations or someone working at a small organization who can complement an executive director who has the vision for a compelling program but lacks business skills.
“The development officer is a great partner when she has the business skills to do the cash-flow statement, work with the auditors, and create a budget,” she says.
More fundraisers might seek a business degree if more recruiters demanded it. But most charities do not place an MBA at the top of the list when seeking fundraisers.
“As long as I’m here, there won’t be any requirement for an MBA for fundraisers at Yale-New Haven Hospital,” says Kevin Walsh, the vice president for development, who manages a staff of 24 people.
He says the MBA is not an indicator of success in the fundraising world, pointing to two people formerly on his staff who held the degree but didn’t succeed there because they “lacked the most important ingredient a major-gifts officer can possess, and that is common sense.”
Costs Keep Rising
MBA degrees may not come cheap, but some nonprofit organizations offer assistance.
For example, Ms. Doud’s degree at the University of Michigan cost $104,000, but her department offered tuition assistance that totaled nearly $20,000.
The university also has a loan-repayment assistance program for people who complete the MBA and then work for nonprofit organizations.
But even with help from an employer, it’s hard for fundraisers to figure out if earnings will be enough to pay for any master’s degree, including an MBA, says Ms. Daly, of Feeding America.
“The challenge is that the cost of education has skyrocketed so much over last decade,” she says, making such projections about return on investment in nonprofit careers especially tough.
She has contemplated an MBA but has not taken that step, preferring instead to learn more about the cause her charity works on, hunger relief, by taking on different jobs at the organization.
“There is something to be said for other types of learning in the sector,” she says.
Negotiating Deals
But Nell Alexander, one of Ms. Daly’s colleagues at Feeding America, is currently pursuing an MBA part-time at DePaul University. She raises money from businesses for the charity: Corporate gifts and foundation grants account for 65 percent of Feeding America’s budget.
Ms. Alexander says she has already used knowledge from her classes to support her work to negotiate marketing deals with companies to benefit the charity.
But she came to her job with an undergraduate degree in finance and for-profit work experience. Earning an MBA was always a goal, not an interest she developed after starting her job at Feeding America.
“A lot of people may think, ‘Why are you getting your MBA? You work at a nonprofit,’” she says. “I may not sit here and analyze spreadsheets, but I am learning different ways to tackle problems and gaining creative insights from my classes that I can take and fit into what I am working on currently.”
Feeding America offers annual tuition assistance of $3,000. “The financial piece is not the happy part of it,” says Ms. Alexander. “But if it’s important to you, you are going to find ways to make it work.”
Studying on the Job
One nonprofit institution, the Ann & Robert H. Lurie Children’s Hospital of Chicago, makes it easier for its employees to earn an MBA, offering an on-site, part-time program in conjunction with National Louis University.
Any member of its staff can apply.
The hospital covered $5,000 annually for Erin Patti, senior prospect research and management officer. That was three-fourths of the cost of the degree program.
“It was affordable and convenient with work,” says Ms. Patti. “It was very focused on what people who worked at the hospital actually did.”
Ms. Patti, who had never previously taken a business class, says she gained knowledge about working on a team as well as how to decipher company financial information.
However, if her degree had cost six figures, as it would have at many elite business schools, she would have had second thoughts.
“I would only put myself into that much debt if there was a payout after I graduated,” she says. “That’s tough to do in the nonprofit world.”
