Simply put, philanthropy needs more MBAs, said J. B. Pritzker, managing partner and co-founder of The Pritzker Group and founder of New World Ventures. “It is discouraging how little efficiency and great business practices are brought to some philanthropic organizations,” Pritzker told students at a June 30 event hosted by the Chicago Booth Philanthropy Club, which is run by students in the Evening MBA Program.
People who dedicate their careers to not-for-profit organizations sometimes do not have the business mindset needed to manage effectively, creating a need for MBA talent, he said. “Whether you decide you want to spend your entire career or just some of your time in philanthropy or a great nonprofit, I hope all of you will bring really good business practices and help the people who are there to carry them out,” Pritzker said.
MBAs must have passion for any type of philanthropy in which they engage, he said. “To simply say, ‘I want to volunteer and do some good,’ is certainly a very positive thing,” Pritzker said. “But you won’t be able to sustain it, just like in business you won’t be able to sustain, build, be ambitious, and succeed, unless you focus on something that you’re passionate about.”
About 10 years ago Pritzker discovered his passion in early childhood development as an “outgrowth of everything I had learned in business,” he said. Of the enormous amounts of money spent on kindergarten through 12th grade education, much of it is “thrown away” on remedial education that would not be necessary with effective early childhood development, Pritzker said.
“All of the research on this issue tends to show that if we go at these problems at increasingly younger ages, you get more and more efficiency and better effect,” he said. “The research says the best time to address third-grade reading problems is when kids are 0 to 5 years old, before they ever get to organized education. Eighty-five percent of brain development in children occurs before they ever show up for kindergarten.”
He described how after years of research, Nobel laureate James Heckman, Henry Schultz Distinguished Service Professor of Economics and in the College and the Harris School of Public Policy, determined the best way to address the United States’s most pressing economic problems is to take action during Americans’ early childhood. “Heckman is no liberal thinker,” Pritzker said. “He’s a human capital development specialist.”
Heckman found that the ROI in early childhood development is about 10 percent annually, Pritzker said. “This is the result of savings in health care and education, increased economic growth, and job creation in building human capital,” he said. “If you are concerned about fiscal responsibility, economic growth, and competitiveness, there is no better place to put a dollar. This is exciting to me.”
The Philanthropy Club launched the speaker series to provide a variety of perspectives on philanthropy, said Evening MBA student Deena Thottumalil, chairperson of the student-led club. “We’re trying to get people from different walks of life,” Thottumalil said. “We might have somebody in Walden Capital, somebody already involved in philanthropy, somebody involved in schools, or a sports star. We’re trying to bring different views and understandings.”
— Phil Rockrohr