Charity begins on an MBA

More and more students are focusing on not-for-profit organisations and charities, says Stephen Hoare

Employed by Friends of the Earth since leaving university 15 years ago, Duncan McLaren has mapped out a management career with the environmental charity. His job has embraced fund raising, running campaigns and policy making. Having just completed an MBA at the Judge Institute in Cambridge, McLaren has been appointed chief executive of Friends of the Earth (Scotland) where he runs an organisation that employs as many staff and has a turnover comparable with many medium-sized businesses. Speaking for the entire sector, he says: "There is a lot we can learn in terms of marketing, positioning and business management skills."

Charities such as Friends of the Earth have had to become increasingly professional to expand and gain influence. According to Cranfield University School of Management, the UK's non-governmental organisation (NGO) sector embraces 198,000 charities and has an income of £15.6bn. Amanda Tincknell, chief executive of the Cranfield Trust, a fund set up to help MBAs volunteer their services for charity, says: "Charities have expanded to become a professionally managed sector of the economy delivering a lot of government services."

Friends of the Earth employs two MBAs, both in senior management positions. Why do they need this level of expertise? McLaren says: "For any NGO to deliver its objectives, it needs to engage with business. At Friends of the Earth we need to know how businesses makes their decisions so we can exert influence." Besides McLaren, the Judge Institute's full-time MBA cohort included the HR director of Scope, an executive of the World Bank and a fund-raiser for Consumer's International.

Lancaster University Management School also has a growing number of NGO executives on its MBA programme. Julia Gibbs, who graduated from last year's MBA class, has moved from a strategy adviser with Barnado's to Edinburgh University where she is researching the impact of organisational change on staff within the NHS.

According to Gibbs the enhanced role of charities in taking over government work has placed a premium on MBAs. "Sixty per cent of Barnado's work is commissioned by or is in partnership with government and local authorities, and like many other charities there is a heavy emphasis on corporate relationships. Barnado's has an annual income of £130m and runs 300 projects across the UK benefiting more than 100,000 service users – young people and their families. Why would an organisation the size of Barnado's not need the same level of management skills as the commercial sector?"

Business schools are aware of the need and are responding. Henley Management College's Centre for Voluntary Sector Management has boosted awareness of the sector. It's director, Stephen Lee, says: "Last year saw a 100 per cent increase in the number of MBA dissertations focusing on charities and not-for-profit issues."

Business schools are also finding that the NGO sector is becoming an attractive proposition for executive career changers. Amanda Tincknell says: "The high level of redundancies in the commercial sector has led to a greater pool of talented individuals coming on to the market – former high earners now looking for career fulfilment."

They have a lot to offer. Mike Tyler, 58, took up the post as chief executive of the charity Tower Hamlets Education Business Partnership (EBP) following an MBA at the business school of Imperial College in London. Once a senior sales manager for IBM, Tyler swapped a generous salary for a modest wage. He now runs a charity with an annual income of £1m and which employs 16 staff. The EBP's task is to match children in deprived inner city schools with reading mentors and adult role models.

"The MBA enabled me to plan my exit strategy," Tyler says. "I used to sell at IBM but now I'm back in the City selling a different product – young people! I can raise sponsorship and recruit volunteers from companies because I'm not intimidated by the business environment."