After considering 551 nonprofit organizations’ income-generating business plan proposals that were submitted to its annual contest last summer, the Yale School of Management-Goldman Sachs Foundation Partnership on Nonprofit Ventures announced 20 finalists yesterday.
Of the finalists, who are based all over the United States, four winners will receive $100,000 each and four runners-up will win $25,000 when the competition’s results are announced in May.
“It exactly fits with the mission of the school. It’s a co-mingling of the for-profit and nonprofit sectors,” Deputy Dean Stan Garstka said of the contest, which is in its second year.
Garstka said the idea for the partnership and competition came from the Pew Charitable Trust, which initiated a study of nonprofit organizations. He said the SOM and the Pew Charitable Trust later approached Goldman Sachs, a move he said gave the contest “credibility in the for-profit sector.” Pew and Goldman Sachs provided a total of $6 million to fund the contest.
SOM professor Sharon Oster, who serves with Garstka as co-faculty director of the partnership, said the partnership’s business plan competition is unique among those held at other business schools. She said most comparable contests involve plans generated by students and involve for-profit corporations.
“Our view is that existing nonprofit organizations have plenty of ideas for new ventures. They just lack the technical management tools to get them off the ground, and that’s what our students have to offer,” she said.
Contest officials used a few basic criteria to select the finalists. Oster said judges sought what she called a “sound venture” in terms of numbers; the plan also had to be consistent with the mission of the applicant’s organization.
“These organizations represent a truly diverse mix of program areas, business types and stages of development,” Samantha Beinhacker, deputy director of the partnership, said.
In addition to financial support intended to help launch the organizations’ proposed ventures, the competition also provides participants with consultations and technical assistance from SOM students and alumni during and after the contest.
“The SOM has been rated number one in its nonprofit management program for many years. It seems a natural fit from their point of view to call us,” Oster said.
Garstka and Oster said 10 percent of all SOM alumni assisted in evaluating this year’s proposals, while current SOM students were able to make visits to the nonprofits and work with professional consultants to help fine-tune each organization’s plans.
“Everyone who enters the competition gets all of the feedback from all of the evaluations,” Garstka said. “It is very tough-nosed and direct — I don’t want to say negative — but very realistic in terms of these ventures succeeding.”
Beinhacker said she, Oster and deputy director of the partnership Cynthia Massarsky will publish a guide to generating income for non-profit organizations in conjunction with the contest this spring.
At the competition’s culminating event in New York City this May, the 20 finalists will present their proposals in person to a panel of judges. Oster said Yale Vice President for Finance and Administration John Pepper will be the keynote speaker.