In the commercial world, the past 25 years have seen a dramatic growth in the availability of professional services. Everything from advertising agencies, management consultants and human resources firms to IT companies and investment banks help companies build their businesses.
Yet in the philanthropic and non-profit sectors, very little of these business-to-businesses support services exist. It was for this reason that in 1999 the Bridgespan Group was founded. Incubated at Bain & Company, the global consulting firm, Bridgespan aims to fill the gap, helping non-profits and foundations become more effective by offering business tools and consultancy services.
“Those services are not available in the non-profit sector,” says Tom Tierney, Bridgespan’s founder, who in 2000 stepped down as Bain’s chief executive to focus his energies on the new enterprise. “What [the sector] receives are pro bono services delivered at the margin by organisations that have excess capacity – and those services are not of the consistently high quality that the sector needs.”
Part of the reason for the lack of firms serving the sector is dearth of funds. With most charities operating on revenues of between $1m and $25m a year and lacking access to capital markets, few can afford the fees of the mainstream professional services firms that are consulting to corporations.
Another stumbling block is that charities that have decided to invest in services often find the organisations providing the services are poorly resourced themselves, unable to attract the talent they need and the funds to expand. As a result, the charity may not gain the benefits of the investment, and any charity that has had a poor experience of working with consultants is less likely to turn again to external help.
“We talk about a profit pool in the business world,” says Mr Tierney. “But in the non-profit sector it’s more of a profit puddle. There isn’t much money to attract and build great professional services. So the incentives are modest but the need is not modest.”
For this reason, Bridgespan was developed as a non-profit organisation, giving it the same financial structure as the organisations it serves. “We eliminated the possibility of a non-profit motive that would have caused us to drift to those with money,” explains Mr Tierney.
For Bain, sponsorship of Bridgespan was itself part of a philanthropic mission. Instead of creating a foundation and giving away a certain proportion of its cash flow every year, the company saw the donation of its expertise as a way of having more impact on the non-profit sector.
“The leverage from a corporate social responsibility perspective is pretty unparalleled,” says Mr Tierney. “Because you export your core competencies rather than doing the random pro bono project, which is fine but you can’t scale it.”
Today, about 90 per cent of Bridgespan’s clients are charities and non-profit groups, while the rest are made up of foundations, including the Gates Foundation, the Rockefeller Foundation and the Packard Foundation.
The group benefits from the expertise of its parent. As well as having Bain’s former chief executive at its head, Jeff Bradach, the group’s co-founder and managing partner, is a Bain alumnus. Several other former Bain executives are on staff while the consultancy regularly sends individuals to Bridgespan for periods of secondment.
Within the group, an executive search organisation called Bridgestar helps organisations identify and recruit senior executives though an online jobs board as well as through recruitment advisory services.
“You might call us a combination of Bain, Heidrick & Struggles and Goldman Sachs,” says Mr Tierney. “Because we’re increasingly involved in the strategy work and organisational elements as well as the capitalisation and financial element of charities.”
Another role for Bridgespan is as a source of knowledge for the sector. Everything from book chapters and white papers to case studies, newsletters and articles are made freely available on the website.
Like many companies, the group has initially focused on its home market, with most of its clients based in the US. It recently opened a third office in New York and now has a staff of about 140 people serving about 60 consulting clients and 200 executives search clients – tiny by comparison to Bain’s business but large by the standards of the non-profit sector.
However, Bridgespan also has global aspirations. A starting point is working for non-profit organisations such as the Rockefeller and Gates foundations that are based in the US but whose projects are often outside the US.
Mr Tierney believes Bridgespan can start helping to boost the professional services that are available in emerging markets through partnerships with local firms and work with large global non-profits and foundations.
“The place where some of the greatest needs are, and where much of the philanthropy is, is in the developing world. And we aren’t going to be opening an office in Kenya any time soon,” he says.
“However, we hope that, in the next five to 10 years,our international scope is such that we can help build capacity in service firms in other parts of the world.”
Certainly, as charities strive to professionalise their operations and achieve more with less, the kinds of services offered by Bridgespan are likely
to become more sought after. Moreover, donors are demanding more accountability from the organisations they fund.
“Philanthropy is moving in the direction of wanting results,” says Mr Tierney. “And people want to get more results because the problems are gigantic compared to the resources.”
