Because nonprofit organizations work toward philanthropic rather than fiscal ends, they sometimes lack the business prowess necessary to stay afloat and maximize their impact, School of Management professors said.

To help nonprofits glean this business expertise and generate revenue to further their causes, the SOM is holding a business plan competition. The contest will award eight winners cash grants and pro-bono consulting advice. The competition is being funded by grants totaling $4.5 million from Goldman Sachs and Pew Charitable Trusts.

The competition, in effect, aims to synthesize the social benefit of nonprofit missions with the profitable strategy of a corporation, SOM professor Sharon Oster said.

“I think this project fits in exactly with the identity of the school,” Oster said. “It combines business skills with a social mission.”

A group of 200 evaluators — composed of SOM alumni, current students and faculty members — have already whittled the pool of 655 entrants to 80 semifinalists.

A third round in late December will further reduce that number to 20 finalists, who will present their plans at a May competition in New York City. Four grand-prize winners will each receive $100,000 and four runners-up will receive $25,000 to launch their winning business ventures, according to a press release.

Oster, who was approached by Pew Trusts to lead the competition, said entries were judged based on the feasibility of their ideas to create self-supporting organizations.

In a recent NonProfit Times article, Oster said that nonprofits, faced with a limited well of public donations and grants, are increasingly turning to commercial ventures to support their philanthropic work. Nonprofit organizations such as the Metropolitan Museum of Art in New York operate gift shops that serve as a financial buttress to the organization’s central mission, Oster said.

The applicants come from diverse cross-sections of the nonprofit spectrum — including the arts, education and social services, said Stanley Garstka, the SOM’s deputy dean. Some of the applicants represent subsidiaries of long-established organizations, while others represent small groups of concerned citizens.

“Everyone’s going to need something different,” Garstka said. “I think the bottom line is to help five to 10 nonprofits really establish a for-profit venture that is going to add to their basic mission.”

The SOM is offering a spring course to coincide with late stages of the competition. The course will pair each of the 20 finalists with two students who will advise the contestants and help them produce a final business plan.

Garstka said SOM students will study social venturing phenomena and possibly compile a book detailing the case studies of each of the entrants.

“There’s a pedagogical side to this,” Garstka said. “Can we learn something from this process?”