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Nonprofit Interns Celebrate SMIF's 25th Anniversary

October 2006

STANFORD GRADUATE SCHOOL OF BUSINESS—They call it "The 2 percent solution,"—a fund that underwrites summer internships for Stanford MBAs who work for nonprofit organizations and public entities. Part of its support comes from MBA students themselves who donate 2 percent of their summer salaries with for-profit organizations to support the effort.

For 25 years, the Stanford Management Internship Fund (SMIF) has supplemented salaries for students working in relatively low-paying summer jobs for public and nonprofit institutions, allowing students with tuition bills to pay to earn salaries nearly as large as their peers in the for-profit world.

A SMIF fellowship leveled the playing field for Haydee Moreno, a second-year student and co-chair of the group's student-run board. Since salary would be about the same if she took a nonprofit job, "the question became, 'What did I really want to do?' I was able to decide where I would be the most happy and where I would learn the most."

Here is how SMIF works: During the winter or spring of the first year, a student locates a 10-week summer internship at a nonprofit or public entity. Once the employer agrees to hire the student intern, he or she applies for SMIF funding. Some 25 to 30 applicants are selected annually as SMIF Fellows.

The student's employer contributes $600 to $1,000 salary per week, and SMIF makes up the difference. The program's goal is to get the student to a salary of $1,300 per week, which, as of last year, is about 80 percent of the median salary of classmates with internships in for-profit organizations.

Since 2001, the Graduate School of Business has provided the primary funding for SMIF, though over 65 percent of the first-year class donates 2 percent of their summer earnings to the fund. Additional donations come from faculty, staff, and other members of the Business School community. SMIF's annual budget is $195,000 and, in 2006, faculty, students, and staff donated over $30,000.

Brian Kelley, MBA '82, who helped found the program, was among those gathered recently to celebrate SMIF's 25th anniversary. In 1981, Kelley recalled, SMIF started with 30 volunteers and 30 telephones. It funded seven students that first summer.

"It was our sense that exposing students to the public sector made a lot of sense," Kelley said. ". . .and 25 years of work has done nothing but intensify my feeling that the role of nonprofits and the public sector are vital to the economy."

To date, the fund has supported 400 interns in 250 organizations, including 27 student fellows during summer 2006. In recent years, students have worked at Goodwill Industries, the David and Lucille Packard Foundation, the United Nations Development Fund, the Rocky Mountain Institute, and the World Bank.

Kriss Deiglmeier, executive director of the School's Center for Social Innovation, told the anniversary gathering that 100 percent of all host organizations that partner with SMIF say they would recommend the program to others. She said the value of a SMIF intern to his or her host organization averages around $20,000, adding: "The impact SMIF has is pretty significant."

Last summer, Moreno interned at Pacific Community Ventures, a nonprofit that provides resources and funding to businesses that benefit low and moderate-income communities in California. During her 10-week internship, Moreno developed strategies to help the organization provide additional human resources-related products and services to its clients.

"The internship far exceeded my expectations for the kind of work I was able to do and for the impact I was able to make," Moreno said.

"It was great for two reasons. First, it involved something I felt strongly about and could empathize with. Second, it was a challenging assignment and I was able to stretch myself, stretch my skills, and apply some of the things I had learned before coming to the internship," she said.

Robyn Goldman, Moreno's classmate, spent 10 weeks helping the Community Foundation of Silicon Valley assess how technology was being used to connect donors to nonprofit organizations. Her work there allowed her to develop an idea for a philanthropy tool that could help increase philanthropic giving.

"I am forever grateful for the opportunity that the SMIF program made possible—how it encouraged me to experiment, how it mobilized me to transition from for-profit to nonprofit, how it enabled me to grow both as a businesswoman and individual, and how it opened doors to my future career," Goldman said.

Opening doors is precisely the aim of SMIF: Contributions to the fund allow MBA students to work in nonprofits and public entities where there might not be resources to pay them competitive salaries. As such, it has allowed 400 students to bring their management skills to bear in areas of great social impact. And that is the 2 percent solution.

—John Stafford