PONPO Seminars: Nava Ashraf on Pricing in the Nonprofit Sector
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By Juliana Koo, SOM’06
Nonprofit healthcare managers often feel conflicted about charging a price for their goods or services, especially when clients’ immediate health and welfare are at stake. On one hand, it is often the case that their target client population is poor, and placing an additional financial burden on poor people feels wrong. On the other hand, there is evidence that clients do not use donated products appropriately, resulting in lower impact of nonprofit managers’ time and investments. Here is a case where the right decision may feel completely wrong.
In her PONPO seminar on September 18, Nava Ashraf (Assistant Professor of Business Administration, Harvard Business School) presented a report of a field study that she conducted in Zambia with two colleagues to sort through the factors that affect a client’s use of a product based on whether and how much she pays for it. If it is true that pricing boosts usage, Ashraf contends that there are two potential reasons. It may be that prices screen in people who want to use the product, resulting in a higher proportion of users among the purchasers. She calls this the screening effect. It may also be that paying actually has a psychological effect that induces use.
United Way of America, located in Alexandria, VA, is the national office of United Way. I worked in the Diversity and Inclusion department, focusing on best practices. I conducted a review of current best practices in diversity and inclusion in the private sector. I used a framework based on best practices to analyze internal human capital survey data and then highlight the key findings on diversity within the system. Using these findings, I provided recommendations on strategies to advance the organization’s diversity plan. I also identified areas for improvement of the content and imagery of the United Way’s website and recommended ways to better reflect the organization’s commitment to diversity. Additionally, I interviewed United Way and university career office staff as well as college students to develop a college recruitment strategy to attract a more diverse cohort of graduates.
My work over the summer dealt with knowledge management and training opportunities offered to local United Way organizations throughout the US. My primary deliverable involved marketing analysis of existing training opportunities through interviews with the field, focus groups, review of UWA course evaluations, and analysis of registration trends. My recommendations were presented to the senior leadership team of the United Way, and have shaped the organization’s 2008 learning and training strategies.
I interned for One Acre Fund, a startup NGO based in western Kenya. One Acre Fund, founded by Andrew Youn (Yale ‘00), provides targeted microloans to extremely poor farmers in an effort to help them pull themselves out of poverty. My responsibilities for the summer were two-fold: First, I developed a Monitoring and Evaluation system to allow the organization to measure its impact on its participant farmers. This involved researching best practices in program evaluation, developing and field-testing a baseline survey, training our local staff to administer the survey, and building a data entry business that can scale with the organization. The second half of my job was to revise the curriculum for One Acre Fund’s primary cash crop: passion fruit. Among other things, I learned how to build manure compost piles and apply fertilizer to passion fruit fields. The summer was an incredibly valuable personal and professional experience and I was enormously impressed by the organization Andrew has built.
This summer, I worked for both AMS Planning and Research and The Momentum Group. AMS is an arts management consulting firm focused on market research and strategic planning. I built a pro-forma model for a proposed Performing Arts Center in California and I conducted extensive research on New York City dance activity for a major arts facility.
The Church Pension Group is a not-for-profit company that serves the financial and insurance needs of Episcopalian churches, clergy, and lay employees. As an intern under the CFO of the enterprise, I worked with CPG’s publishing company on strategy and financial concerns. The aspect that I liked most about the experience was that concerns regarding the relationship between mission and financial responsibility were constantly being asked. In addition, with $9 billion under management, CPG was the rare not-for-profit that had many of the resources and staff development opportunities of a Fortune 100 company. In short, it was a great experience.
I found it truly amazing to watch Teach For America operate, as a whole, due to the organization’s extraordinary ability to set goals and put in place clear metrics. In the first-year curriculum, we frequently discussed the inherit difficulties that non-profits face in communicating their achievements (and—as a consequence—the difficulties that arise in obtaining funding), since many non-profit goals are often classified as “qualitative.†Even when these qualitative goals are met, the accomplishment can be difficult to put into measurable-terms (i.e. quantitative, hard-facts and numbers) and this leaves room for subjective interpretation of how well the organization is or is not performing.
In the context of users’ changing needs, the New York Public Library continues to redefine its mission. During my internship, I helped to identify and prioritize metrics for Senior Management to include in a monthly evaluation of the overall health of the organization. I researched and analyzed best practices of metric assessment within and outside the industry, and I met with key internal stakeholders to set monthly performance targets and to incorporate their interests into the design of the Library’s first balanced scorecard. The internship provided me with the incredible opportunity to combine my interests in culture and education with the quantitative and integrated management skills I’d honed in my first year at SOM.
This year, I had the privilege of composing one of the school’s first social enterprise cases, on Achievement First (AF), a New Haven-based charter school management organization with schools in New Haven and New York.