Aaron Hurst is a man with a mission. Hurst, CEO of Imperative and author of The Purpose Economy, is out to reinvent corporate philanthropy. In 2001, Hurst launched Taproot, a company that aims to make pro bono service a part of every business. The idea is simple. Many non-profit organizations face a major handicap when it comes to two things: funding and talent. That, in turn, hinders scalability and societal impact.
According to Hurst, the talent issue is easily solved. Skilled professionals, according to him, owe a responsibility towards society. “If you are lucky enough to have a business education, design education or engineering education, you have a broader responsibility to society,” he says. By offering their services pro bono to non-profits, they are fulfilling, what he calls, their ‘professional social responsibility’.
Hurst has been an evangelist of the pro bono movement for more than a decade now. In this wide-ranging interview with CKGSB Knowledge, he explains how pro bono works, the challenges confronting non-profits and the role of business schools in making NGOs more effective.
Q. Corporate philanthropy has become a buzzword today. Are you happy with how most companies implement their corporate philanthropy strategies and their involvement in pro bono work?
A. The first time a company tries to do philanthropy or corporate social responsibility (CSR), it’s not very satisfying but it evolves over time until it becomes fully integrated into the company. You’ll see some of the best companies in Silicon Valley and other places they don’t even have CSR or philanthropy; it’s just built into the fundamental DNA of the company. Some of the older companies didn’t have it before, so they add it on, and it feels like it is more of an appendage to the company. But then over time it starts to seep into the company. So I think I’m happy, but I’m impatient. I also have to have some patience to realize it takes time to make that change.
Pro bono work to me was always something different though. It’s not about companies. A lot people think of pro bono as being about companies, which makes sense. To me if you think about CSR, pro bono is about ‘professional social responsibility’. If you are lucky enough to have a business education, design education or engineering education, you have a broader responsibility to society. You are so lucky to have these talents, (so you must) make sure that what you have is (not) only accessible to those who can pay for it, but (also) to those who need it most. One of the biggest challenges (is) that in society, these skills are becoming more and more necessary for success. But they are becoming more and more expensive so only the big companies can afford them. It’s more about an individual designer, business professional or accountant making sure that you spend some of your time helping those who couldn’t afford your talents because you believe that is necessary for a good society.
So our work in the US and much more internationally is about how do we change the relationship between the professional and society so they are not just responsible to their boss but they are responsible to the bigger community.
Q. How do you define your role in this pro bono work?
A. If you look at the history of lawyers, accountants or doctors, they already had the sense of broader responsibility to society. But the other professions didn’t. With the Taproot Foundation, the work we did was to bring awareness to these other professions and to say you are just as important as doctors and lawyers and accountants, and non-profits need your help. (We)exposed them to that first opportunity. Once they have that opportunity and they experience it, they are usually hooked for life because it is so rewarding. A lot of what we did in the US was to help expose people and also to make sure the process and structure was strong because if someone has a bad experience the first time they do pro bono, they don’t do it again. A lot of what we try to do is figure out what is the science and art of pro bono so people have a wonderful first experience and are committed for life.
When I started doing Taproot in 2001, most people did not do pro bono. It was considered ‘you get what you pay for’. By the time I left Taproot, there was probably between $15-20 billion a year in pro bono being done in the US. It’s a major shift and you are starting to see it now at universities, professional associations and companies.
Q. What are the incentives for a corporation to engage and encourage their employees to do pro bono work?
A. Companies in the US have slowly been picking up pro bono, but I think it really varies depending on the type of company why they do it. For professional services firms and consulting firms, they see it as a really critical way to grow their talent and engage their talent, so it’s a pretty easy business case. You’ll see Bain, McKinsey, and they do tens of millions of dollars a year in pro bono. For bigger companies that aren’t consulting firms, the biggest value has just been reducing turnover of top talent. Because (for) the top technology professionals, marketing, etc., it’s such a competitive labor market that they see this as one of the really key ways to differentiate the experience of an employee at Hewlett-Packard versus going over to another company. So that’s been the real value. We’ve also seen a lot of R&D come out of doing pro bono. Because people are used to solving problems the same way over and over again at a company, when they go out and see things can be done differently, they bring that back to the company. There are many stories in the US and IBM is a great example. They’ve developed many patents based on the work they’ve done pro bono for non-profits and government because it gives them the opportunity to do things very differently. So innovation has been a real driver as well for pro bono.
Q. You talk a lot about a major shift in America. What is the situation like in China?
A. China is so exciting because there are so many professionals. Everything is at a different scale–it’s the cliché right? In China many of the NGO and GONGO [government-affiliated NGOs] organizations are very, very small. They are not yet at that point where they can take that training to learn how to use pro bono. It’s waiting for that market to mature so that they really are able to be strong clients for these professionals.
Funding is difficult–there (are) not (a lot of) charitable foundations here to support a lot of this work. But luckily some key companies—Intel, Hewlett-Packard and also some Chinese companies—are really starting to embrace pro bono. We will start to see the rise of corporate funding and staffing to support it in the next couple of years. Like with all of China, it’s a very old society, and they have that patience to know that it’s not going to happen overnight. It’s going to take a while to evolve. At the core, the Chinese business community and government community is very aligned with this vision of having professionals not just be mercenaries, but (also) be actually committed to society’s health overall.
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Q. From your understanding, what’s the biggest challenge for Chinese organizations and NGOs?
A. The biggest challenge is capacity. I think the professionals want to do it and the companies are willing to do it if they understand it. They just need to have the staff time and staff skills to really know to manage a pro bono project. Because pro bono is a combination of knowing how to manage volunteers but also how to manage consultants. A lot of people, in the US in the private sector as well, don’t have training and don’t know how to manage consultants. It’s not just non-profits either. Many people within companies don’t work with consultants effectively. Often when people describe the problems they have with pro bono, they are the same problems you would have working with McKinsey. Working with consultants is wonderful but challenging. Being able to build that capacity and knowing how to get the most out of a consultant, not to expect them to be superheroes and instead realize they just become part of your team and you need to work with them.
Q. How can business schools contribute to this kind of work?
A. Business schools are one of the most important players in the propagation of pro bono because it’s the responsibility in civil society for the dean or head of the business school to really ensure that when everyone graduates from business school, they have a clear understanding that they are fortunate to have these skills and that they need to make sure they make them available to those who can’t afford them. You do that in a number of different ways. One is through the speeches and the leadership at the school, whether it’s the professors or the dean, and just reinforce that message. The second is by making sure that part of the MBA program involves students getting out and doing pro bono work for NGOs and GONGOs. It is critical to have that experience but also make sure the case studies and the curriculum look at NGOs and GONGOs as part of what it takes to run a successful organization. Ultimately business schools should be renamed because it’s not really just about business. It’s about how to run an effective organization to enable it to be successful at whatever its mission is.
Q. Can you share with us some examples of best practice from the American experience?
A. The best programs, and you’ll see this in almost every top business school now, are where students are consistently being given projects as teams that involve doing real work in the community as the way they learn their curriculum. That’s a major innovation that’s taken hold and it’s very rare now in the US for someone to graduate with a MBA without doing a project pro bono in the community. It’s just a common part of the practice. Secondly, you are seeing more and more courses that are on management in the non-profit sector that have social innovation integrated into the curriculum. I’ve worked in for-profit companies, I’ve worked in non-profit, and I can tell you without any hesitation that managing a non-profit is much more difficult. We often think that business professionals know more about how to lead and to manage than non-profits, but non-profits are way more complicated and require such stronger skills. Business schools in the US are starting to realize that and bring in faculty with strong experience in the non-profit sector. And you’re looking at traditions from the non-profit sector, like community organizing, and applying those to a business environment. All the work I do today is actually taking those non-profit principles and helping to train companies on how those work so they can really be effective.
Q. Why are non-profits so complicated?
A. Non-profits are complicated firstly because of the funding stream. Most of the funding for non-profits is not from the customer. So you end up with twice as many customers. You have the actual customer and then you have the people paying for it. And so you are expected to satisfy both these needs. Then you’ve got a board of directors in the US, which is another customer you have that represents the community and you need to keep them happy and engaged in a way a company generally does not have to. Then you’ve typically got staff to which you are not able to pay market rates so you’ve got to find ways to incentivize people beyond cash to make them want to stay and do that work. Then you’ve got to figure out how do you measure success? A company bases it on net revenue, shareholder value and sustainability to some degree. But it’s usually quarter-to-quarter or maybe one year. In a non-profit, the impact is not felt for three years or five years, and it’s multiple variables that are somewhat subjective. So it’s really hard to know what success is. As a CEO of a non-profit, you can’t just say, ‘we had a very successful quarter, we had net revenue of X, we had shareholder value of Y.’ As a non-profit it’s not that binary, so you have to lead with much more relationship and nuance to connect people to what you are doing.
Q. China has a lot of non-profit organizations. We also see a lot of foreign companies want to work and partner with local Chinese NGOs, but it can be quite challenging. What are your thoughts on this?
A. The most important skill in business and in life is empathy. The ability to understand other people and to listen before you talk. That’s the number one challenge with pro bono and it’s the number one challenge for American or European or other companies going into either a non-profit in their own country or in another country. They start by giving advice, they start by trying to make a difference, instead of realizing the first step is to shut up and listen and understand first. I don’t think it’s really an issue of China or another country–just in general with any relationship, listen first. If you do that, you are fine.
Q. How do you envision this area evolving in China in five years?
A. So regarding pro bono in China in the next five years, my hope is that the government really will play a bigger role and really celebrate those people and individuals who are leading this in the professions, and start to really play a role in challenging the marketing community, the HR community and MBAs to make pro bono part of what it means to be a professional. China, almost uniquely, is in a position to do that, even better than in the US, because there is such a strong tradition of the people being dedicated to the nation and to the people first. So it’s a very natural reflection of the Chinese values. I really hope that that is fully embraced and the government is really reinforcing that message and companies are starting to take that on. It’s not as much about cash donations as it is about expertise. Because now there is a lot of money floating around in China, it’s the talent and the time that I think is scarcer among these professionals. It is just such a critical change that needs to happen.
Q. You also talk about how local NGOs need to engage in capacity building. What are the challenges here compared to foreign organizations?
A. So capacity building for non-profits is very difficult in the US. It’s not funded well, donors don’t want to give money for it–it’s not sexy. In China it’s that times 10. The challenges are really great. One is that there are not enough organizations in China to help build the capacity of those organizations. Secondly, there’s no funding to support the staff time to do so. Finally it’s just the maturity of the overall field. If you are a donor, you want to give money to help a child, you don’t want to give money to build a website to help the non-profit that helps the child. So everyone complains about funding in the US–it’s a major problem, and in China it is 10 times worse because it is a less mature field and people don’t yet understand charity, much less that there’s capacity for that charity. It’s a real challenge of just public awareness, educating donors, building organizations who focus on building non-profit capacity. The key is to be patient. It’s going to take five or 10 years before that really takes hold.
Q. In this area there are three players. One is the government, the second is private companies and the third is non-profits. What is the best possible way for them to work together in China and elsewhere?
A. The best way to build any kind of partnership is to have a shared vision. Too often partnerships are built around strategies, not around vision. The second the strategy falls apart, the partnership falls apart. So for government, civil society and corporate partners to work together in China or anywhere, the key is for the leaders to develop a common vision and know that they will fail many times along the way, but know that they are committed to that long-term vision and keep trying. That vision has to be something that they all get real value from, they all believe in and they are all willing to fail a little bit to get there. In general, people too often say they should work together, but you should only work together if you have a common vision that you want to get to. So it really requires a single leader standing up and saying, ‘I have a vision for what could be’, and getting people who share that vision to come together and build that strategy.
That’s the key piece, and that is where pro bono is so powerful because that is one of those visions. So to say that by 2020, pro bono (will) become part of the ethics of professions in China, you have this multi-billion dollar resource for NGOs and civil society for the future. That kind of vision is something that all three can work together on and in the end they know they have achieved something remarkable.