The winning Strategy Challenge team created a roadmap for a Baltimore nonprofit helping fathers and families achieve stability and economic success.
Within the city of Baltimore, poverty hits the Black community hardest of all. Of the 21% of residents living below the poverty line, more than 70% are Black1. The Center for Urban Families (CFUF), a local nonprofit, works to lift this vulnerable population by strengthening the connection between Black fathers and their children and helping foster economic stability among urban families through a variety of supportive services, including job training and parenting education for non-custodial fathers.
And its impact is growing. CFUF has launched programs that have expanded its reach to other parts of the country. Its leadership had larger ambitions and sought to diversify its fund-raising through a so-called social-enterprise model. They had two ideas about how to do this but needed help confirming whether the ideas were feasible and fiscally sound.
“We didn’t have the capacity to assess the right approach with our team. We saw the benefit of having smart individuals come in and guide us,” says Brian Lyght, CFUF’s Chief Operating Officer.
Tapping Outside Experts
For help exploring its options, Lyght and Joseph Jones, CFUF’s Founder, President & CEO, turned to Morgan Stanley, whose 11-week Strategy Challenge pro bono program—now going into its 13th year—matches nonprofits with rising talent within the firm to help solve key strategic issues. The program culminates in a presentation to a panel of judges both inside and outside the firm who name a winner of the challenge.
This year’s participants, including the five-member team assigned to advise CFUF, faced an exceptional hurdle. Due to the COVID-19 pandemic, they couldn’t visit their nonprofit partners in person and had to collaborate remotely, connecting in marathon team virtual sessions with executives and each other.
“We spent many days and nights working virtually; we saw the sun go down together,” says Shellise Josephs, a Vice President in Internal Audit at Morgan Stanley and a member of the CFUF Strategy Challenge team.
Only one of her teammates had spent any time in Baltimore, but they all quickly grasped the importance of CFUF’s mission. “The challenges that CFUF is addressing are pretty prevalent in communities across the country, including where I live, so I had that lens to bring to it,” says team member Christina Brown, a Vice President in Finance.
Assessing the Opportunities
After getting to know the CFUF organization, the Strategy Challenge team set about evaluating the two potential avenues for growth. “As we analyzed both proposals, we determined that for us to get comfortable with saying ‘yes,’ four conditions had to be met: there had to be demand; CFUF had to have the organizational capacity to execute on the idea; the idea had to be financially sustainable; and it had to align with CFUF’s mission,” explains Gregg Bakalar, an alternative investments sales strategist in Wealth Management. Other team members evaluating the alternatives for CFUF included Adam Brown, an Account Manager in the Institutional Equity Division, and Natalie Smithson, an Associate in Global Capital Markets.
The two proposals were:
- A fiscal sponsorship platform, whereby CFUF, as an established nonprofit, would leverage its experience and internal capacity to provide financial and administrative support to less established Baltimore charities; and
- A plan to monetize CFUF’s fatherhood curriculum, tailored to Black fathers, and market it to organizations in other cities, for which CFUF already had inquiries from other organizations and potential financial sponsors to back the initiative.
Saying No…and Yes
The Strategy Challenge team quickly discovered that the fiscal sponsorship idea posed financial and reputational risks to CFUF, based on recent struggles of other nonprofits who acted as sponsors in the Baltimore area. “It would have been very challenging from an operational standpoint, and CFUF could have wound up footing the bill for these organizations it was supporting,” says Josephs.
The potential for the second idea—monetizing the fatherhood curriculum—was much better. With the strong demand for fatherhood programming, especially tailored toward Black fathers, and CFUF’s respected reputation in the community, monetizing the curriculum would give CFUF the opportunity to not only expand the impact of the fatherhood curriculum beyond Baltimore, but also diversify revenue streams to re-invest in their work. The team suggested developing an electronic learning platform and explained how CFUF could expand its offering to include webinars and speaking engagements, among other services. “They gave us a detailed roadmap of how to approach the opportunity,” says Lyght.
Planning for the Future
As work on the Challenge was completed, the team finally got to meet in person in New York—and discussed plans to visit Baltimore. Before they had that chance, however, they learned their plan had won this year’s Strategy Challenge, judged the best out of the six teams competing.
CFUF’s leaders are hoping that the Strategy Challenge team will bring that winning expertise to Baltimore by hosting a meeting with the nonprofit community there to share their learnings about fiscal sponsorship with a broader audience. Additionally, the team provided CFUF with a template to evaluate sponsorship in the future, if the outlook for it improves.
“CFUF is better positioned now, more than ever, to scale our evidence-based programming that supports urban, African American fathers,” says Jones.
For the team members who worked with CFUF, the experience highlighted skills that will serve them well in their Morgan Stanley careers, says Martin Vergara II, Chief Operating Officer, Corporate Services & Global Centers,, who acted as the MD advisor to the team. “At Morgan Stanley, we pride ourselves on delving into complexity,” he says. “The evaluation of strategic opportunities presented by the CFUF team highlights the strengths of our young talent.”
Adds team member Smithson: “Just seeing the impact that we were able to have on this organization, using skills developed in our day-to-day jobs, was really powerful.”