Last Thursday, the HBS Initiative on Social Enterprise (ISE) retracted an earlier announcement that this year’s Social Enterprise Summer Fellowships would be funded at a level significantly lower than previously expected.
The summer fellowship program, which has been running at HBS since 1982, provides financial support to current MBA students who choose to work in nonprofit and public sector organizations during the summer.
Whilst the original terms of the fellowship do not specify in advance the amount a recipient will receive, historically, the ISE has matched the salary paid by the recipient’s host organization up to a level of $600 per week for a maximum period of 12 weeks. This year’s applicants were generally under the impression that such an approach to funding would continue to apply.
On April 12, the ISE announced that interest in the fellowships had “far surpassed” expectations, and was “beyond the financial targets for the program.” The ISE also announced two measures to ensure that “as many students as qualify” would be supported.
First, the fellowship’s award payments would be adjusted downwards to a level of “$300-$400 per week,” the exact amount to be confirmed when final demand for the program became clear. Secondly, separate requests for travel awards were to be evaluated on a case-by-case basis, with preference given to “supporting some portion of international and west-coast domestic travel.”
On April 18, the ISE announced in an e-mail to Summer Fellowship recipients that it had secured additional funding for the program from Dean Clark, and that awards were now anticipated to be “close to the initial fellowship amount.” Travel awards will continue to be dealt with as outlined in the earlier communiqu‚.
In an interview with The Harbus, Stacey Childress, Director, Initiative on Social Enterprise, outlined the reasons behind the original announcement of the program’s funding shortfall, and the subsequent interactions with the Office of the Dean.
“Across the whole school, departments are experiencing the repercussions of the current economic downturn,” explained Childress.
With individual departments currently finalizing their budgets, it became clear to the ISE that, even though final demand for the program would not be known until May 2, the forecasts that it previously developed significantly underestimated the actual level of interest in the program.
Within a day of making the announcement of cuts to the fellowship awards, Childress had a “candid and frank” conversation with Dean Clark. Extra funding for the program was secured, in spite of the pressure on HBS departmental budgets.
Last year, 48 MBA students (31 RC’s) availed of the program. Revised forecasts for demand this year expect “up to two times” last year’s level of participation. The funding shortfall for this year’s program is of the order of $250,000. Childress was quick to point out that, though this amount seems small when compared to the school’s endowment, the School’s operations are not funded from the HBS endowment.
At the end of last week, Fellowship recipients were somewhat relieved that large cuts in funding seem to have been averted. Questions remain, however, about why changes to the program were communicated in such a manner, and, with two rounds of applicants already processed, why the alarm bells on final demand for the program did not ring sooner.
Childress admitted that the timing of the original announcement was “unfortunate.” However, the decision to provide extra funding for the program demonstrates “the Dean’s and the School’s commitment to Social Enterprise,” she concluded.