Financial Support for Social Enterprise Alumni at HBS

Recognizing the growing quest for social impact among MBAs, Harvard Business School (HBS) will slash the loan repayments of graduates working at for-profit social enterprises.

Beginning in October 2017, a newly extended initiative will support alumni working at nonprofits, public sector organizations and for-profit social enterprises. These include certified ‘B Corporations’ and limited liability corporations in the US, or the equivalent in another country. Applications from alumni working at for-profit social enterprises will be awarded on a case-by-case basis, with a limited number of applications accepted on an annual basis.

The initiative is an expansion of HBS’s Loan Repayment Assistance Program, which reduces the educational debt repayment burden for alumni in managerial positions in the non-profit and public sectors.

Nonprofit salaries the lowest at Harvard Business School last year

When it was first launched in 1992, the Loan Repayment Assistance Program appeared to be a move to support graduates working in areas that typically pay less than traditional MBA jobs in management consulting or investment banking. HBS MBAs working in the nonprofit and government sectors earn average annual salaries of US$90,000 (as per the school’s latest employment report) — the lowest median base salary of all industries.

But the expansion of the program suggests that Harvard Business School also wants to support MBAs who are making an impact at the same time as turning a profit. “The line between nonprofit and for-profit is increasingly blurring,” said Matt Segneri, an alumnus of the school and director of its Social Enterprise Initiative. “We are seeing a growing number of HBS graduates elect to pursue opportunities at the intersection of sectors, working at hybrid organizations or for-profit social enterprises.”

Social enterprises: Both mission and market-driven models?

The move is also a natural extension of Harvard Business School’s stated mission of inspiring leaders across all sectors to tackle society’s toughest challenges and make a difference in the world. The shift also reflects growing social enterprise offerings in the HBS MBA program, which highlight and celebrate for-profit models that are both mission-driven and market-driven. This includes courses such as ‘Investing for Impact’ and the social enterprise track of its annual New Venture Competition, where an increasing number of entrants pursue for-profit business models.

It also highlights the support MBAs can receive long after they finish their studies at a business school.