Initiative on Social Enterprise, Dean’s Office undermine credibility with sudden announcement of fellowship cuts

Several RC students were thrown into panic last Friday, April 12, when they received a memo from the Initiative on Social Enterprise (ISE) that began with, “Congratulations!”

Applicants for the second round of Social Enterprise summer fellowships were informed that their application had been approved (“Congratulations!”), but the amount awarded would only be up to half what they had been led to believe they would receive.

There’s pitifully more to this story. Applicants for the Social Enterprise summer fellowship were required as a condition for application to accept a position with a sponsoring employer, who was required by the fellowship terms to pledge (with few exceptions allowed) a minimum of $600 per week in salary. All fellowship promotions said the ISE would, in turn, match this amount.

This brought total planned compensation for students who took a summer position in the social enterprise sector to $1200 per week – not quite market rates, but a reasonable income for a chance to explore work in a sector where everyone agrees premium MBAs are as woefully needed as they are underrepresented.

How baffling then that the fellowship committee claimed surprise when it informed unsuspecting applicants that the number of applications this year could be double the previous year’s number, and therefore individual funding would be reduced. What a way to recruit people to the cause when the opportunity to recruit has never been greater.

In all the promotions for this fellowship – through Career Services, Section Career Reps, afternoon presentations, the Social Enterprise website, and The Harbus – students desperate for summer work were told that each application would, as in years past, be evaluated solely on the merits of the application itself. The writing was on the wall since last summer: applications would be up – way up.

But the ISE showed no concern. In fact, the Initiative even expanded its summer fellowship program this year so that students accepting summer internships with for-profit, social-purpose organizations (not just with not-for-profits) would qualify for funding.

As a result of all these promotions, what signals did the fellowship committee think was being sent to students? Certainly most applicants never expected that the number of applications received could slash up to a quarter of their summer income. That expectation would surely have altered the calculations of many applicants.

Earlier this term, with great fanfare in collaboration with Dean Clark, Dean Kester, and University Professor Michael Porter, the ISE announced a new fellowship for ECs, the Service Fellows Program, that would fund graduates with jobs in the social sector for one year after graduation.

In an interview with The Harbus at that time, Dean Kester revealed that the funds for that program would be taken from unrestricted endowments, money that could also be spent on a range of other items including IT development or new construction. He said the decision to launch this new fellowship was a result of the administration’s belief in the school’s mission statement and that work in the not-for-profit sector should be a part of every MBA student’s training.

Somehow, however, funds were not available to uphold the spirit, if not the letter, of the terms under which the Social Enterprise summer fellowship was promoted. Last week, the Initiative on Social Enterprise was advising concerned applicants that it was “continuing” to make a case for additional funding from Dean Clark.

Why this case needs to be made in the first place to a man who just sponsored a conference about “ethics, values, and spirituality” remains a mystery. As of our publication time Friday evening, and after several days of heavy criticism from applicants and their supporters, the ISE announced that the Dean’s Office had “indicated” it would provide “additional funding,” but no administration offical would go on record with an actual amount, preferring instead to see just how many students apply in the upcoming third round.

In the “update” letter to applicants, Stacey Childress, Director of the ISE, said that because of additional funds from Dean Clark, the fellowship committee “anticipates” that awards will be “close to the initial” amount expected.

This is silly. If the money is now there to make the awards “close” to the initial amount (after a deluge of criticism), what’s the incremental cost of fully honoring the terms under which the program was promoted? Apparently it’s equal to the administration’s BATNA on the reputational integrity of the Initiative on Social Enterprise.

That’s not to say that the Initiative is being particularly deft at handling its own reputation. Its original award letter to applicants included the galling line, “While we realize this news is not what you expected, please remember the commitment that you made to your chosen organization before you applied to the fellowship program.” In other words: you’re stuck now and we know it.

But this is an instructive though tragically ironic lesson. Take heed: in the social enterprise sector, you are in fact always at the mercy of your benefactors (not to mention the integrity of their word).

This is the message, the cold hard reality that stands in stark contrast to the self-sabatoging “doing well by doing good” double-speak often heard in conjunction with this sector. It’s probably not a bad way to begin a summer forray into this area.

The Harbus owes an apology to its readers. A major piece of the Social Enterprise summer fellowship promotions was a regular series in The Harbus written by last summer’s fellows. We regret that, at least in part, many students now find themselves in a precarious position because of the exposure we gave the program. We shared everyone’s expectation that the fellowship committee was accurately predicting demand and would honor the terms under which their program was promoted.

It seems their promotions were “too” successful – so successful that the committee decided not to honor the terms that caused the success in the first place.

It was so successful that it also revealed an important hidden truth: that there is in fact a WTP limit behind the principles of which the administration speaks. But in fairness, we should all know by now in our lives that talking the talk is easy when talk is cheap.

Reputation and integrity, however, are not cheap. And you know people have reached that WTP limit once they rely on slight-of-hand retractions and legalistic parsing of phrases to defend their position.

In the end, however, there is an elegant synchronicity between the two meanings of the word “value,” a pressuresome point that requires one to back principled values with economic value in order to demonstrate the real measure of one’s worth.