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Strategic thinking – Consultant sees business in pro-bono work

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BOSTON – Management consultant Bain & Co., which historically has worked for free for nonprofits, is turning its nonprofit expertise into a business that targets the nonprofit sector’s explosive growth.

Thomas J. Tierney, Bain’s worldwide managing director who mapped out the idea on a napkin nine years ago, says pro bono work doesn’t fill the needs of foundations and other nonprofits.

“Pro bono consulting for nonprofits doesn’t produce the results because it is in and out,” he told The New York Times. “They often have no follow-up because the ugly fact is you get what you pay for.”

Bain’s newly formed Bridge Group hopes to complement pro bono work with advice about management, growth and financial campaigns, analyzing donations and tracking successful projects so they can be used as a learning tool. The firm, which will charge fees for that advice, expects to handle about 10 clients this year.

Jeffrey L. Bradach, managing director of the new initiative, told the Times that fees generally would be about one-fifth of what Bain charges corporate clients and in many cases will be paid by foundations. Bain earns an estimated $700 million annually from corporate clients.

The Bridge Group has been set up as a separate nonprofit, but it has close ties to Bain and its consultants will have access to Bain’s database of case studies and project knowledge

The creation of such a strategic consulting firm is likely to encourage a trend to consolidate nonprofits, much like the mergers that have swept the banking industry, the Times reported.

The United States has about 770,000 nonprofits, not including religious organizations, and they raised an estimated $750 billion in fees, grants, donations and investment earnings last year. Many of the organizations are small and duplicate the works of others.

The Bridge Group, with a staff of 12, has offices in Boston and San Francisco.

— Cindy Stiff

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