Nov 15, 2018
Your nonprofit needs corporate support, and for-profits need CSR programs. How do you bring these needs together to form a symbiotic relationship? We looked at the benefits for both sides, how nonprofits can position themselves, and one organization that’s doing it right.
With the internet at our fingertips, today’s consumers are becoming increasingly aware of where their money is going. This means that corporations need to consider their purpose beyond making money and increasing revenue for their shareholders. More companies are investing in CSR (corporate social responsibility) programs, which dedicate resources to delivering economic, social, and environmental benefits to all stakeholders. Luckily, this is something nonprofits can use to their advantage, because when you’re looking for a successful corporate partnership, you know they need you just as much as you need them. Finding that corporate partnership can be challenging, however. You need to consider what elements will make your organization an attractive nonprofit partner and how to position your nonprofit to build relationships.
Corporations need more than just revenue
With 55 percent of consumers willing to pay more for products from socially responsible companies and 93 percent of the world’s companies now publishing annual CSR reports, it’s clear that for-profit organizations can no longer rely simply on revenues and stock prices. Having a CSR program means allocating resources toward a cause, community, or initiative. Although the direct goal of the program is not tied to revenue, a strong CSR program is likely to contribute to positive business outcomes. According to Forbes, companies are using CSR as a way to push innovation, cost savings, brand differentiation, long-term thinking, customer engagement, and employee engagement.
Double the Donation outlines some of the ways corporations benefit from a CSR initiative:
- Improve public image. Companies that demonstrate their commitment to various causes are perceived as more philanthropic than companies whose corporate social responsibility endeavors are nonexistent.
- Increase media coverage. It doesn’t matter how much your company is doing to save the environment if nobody knows about it.
- Boost employee engagement. When companies show that they are dedicated to improving their communities through corporate giving programs, they are more likely to attract and retain valuable, hardworking, and engaged employees.
- Attract and retain investors. When companies donate money to nonprofit organizations and encourage their employees to volunteer their time, they demonstrate to investors that they care about more than just profits.
Statistics provided by Double the Donation.
Successful initiatives aligning with company values and brand
Companies that currently have strong CSR initiatives include Target and Lego. In 2017, a report by Reputation Institute named Lego as the top CSR company based on its ethical behavior, ability to operate transparently, promote protection of the environment, and support of worthy causes. Lego’s “Build the Change” initiative does an excellent job aligning to their company values and brand with a focus on building a better world for children. Meanwhile, Target’s efforts in recent years have included giving 5 percent of its profits to local communities. The company has donated $875 million to education alone since 2010.
While some companies’ CSR programs flourish, when scandals hit others wish they had a strong CSR program and good reputation to fall back on. Earlier this year, Starbucks responded to racially motivated backlash following the surfacing of a video depicting discrimination against two black patrons in a Starbucks in Philadelphia. In response, the company closed 8,000 U.S. stores for racial bias training, and established themselves as “corporate activists.” Having a strong CSR program can help companies bounce back from situations like this one. However, they need to be genuine and embraced top-down, as consumers can easily see through a half-baked attempt at reputation-saving. A Forbes article titled “I Take My Coffee Black” notes, “People expect more from their public and private institutions (and occasionally their baristas) and Starbucks is only the latest firm to confront these challenges.”
Qualities of an ideal nonprofit partner
Companies are desperate to find nonprofit partners that can help them achieve their CSR goals. When looking for a nonprofit to incorporate into those goals, they are looking for an organization that:
- Is aligned with the company’s business model/industry
- Has multiple entry points to involvement
- Enables meaningful volunteerism
- Offers continuous partnership promotion
- Is responsive
- Is grateful
The best partnerships between nonprofits and for-profits are symbiotic relationships in which both organizations benefit from the program. Jessica James of Jessica James Consulting, consultant to PepUp Tech, advises nonprofits on creating successful partnerships, and assisted PepUp Tech in establishing its strong grasp on linking its mission to corporations. She emphasizes how companies are looking to partner with nonprofits that align with their values because their stakeholders demand it.
“They want a nonprofit partner that is going to give them a variety of different ways to collaborate – from large volunteer events to lunch and learns and speaker series featuring their executives, from co-marketing of products to co-writing of blog posts about the issues that matter most to both sides. They want responsive, professional, positive liaisons and the feeling that there is always something new and fresh to work on collaboratively,” noted James. “By partnering with nonprofits, companies are receiving a number of benefits that support their bottom line. In return, your nonprofit should be receiving financial support that feels equal to the benefits you are providing the company.”
From shareholders to stakeholders
As Salesforce CEO Marc Benioff states, “The question is how do you achieve equality? I believe that, for business, we have to shift from shareholder maximization to stakeholder maximization.” As companies consider retention methods for employees, how to attract potential talent, and consumer buying power, they are shifting away from seeing shareholder profits as their sole metric of success.
Forbes writes, “Whether they like it or not, boardrooms and the C-suite are facing growing pressure to demonstrate to their stakeholders and society writ large that their value systems are not meaningless words on a wall or annual report, but rather important pillars they will stand on when challenged.”
Making business decision based on stakeholder maximization rather than shareholders, and incorporating a larger purpose into business goals, can ultimately help companies do something crazy: make more money for their shareholders. As James states, “Considering the implications of your business practices from all angles, and striving for deeper responsibility and accountability to all of the constituents that your business affects, actually improves the bottom line.”
Building partnerships: How PepUp Tech does it right
PepUp Tech is a nonprofit whose mission is to assist underserved students and help build the skills, mentorships, and confidence needed to begin careers in tech and help diversify the industry. The organization also provides Salesforce boot-camps, and its Tech Explorers team helps bring tech resources and curriculum to students in grade school. It works closely with companies in tech to provide volunteers, internships, job opportunities, and funding.
However, the advantages go both ways, allowing corporations the opportunity to network, attract talent, and keep employees happy through industry-specific events. Because PepUp Tech’s tech-minded mission was baked in from the time it was founded, it has an advantage in establishing corporate partnerships. This doesn’t mean building partnerships is impossible for other organizations with less industry-specific missions, because it all starts with establishing relationships.
PepUp Tech has established successful partnerships and been able to support their mission by engaging members of their community.
How nonprofits can use CSR programs to their benefit
Getting started on building a corporate partnership can be a daunting task, particularly if your nonprofit doesn’t have a mission that clearly aligns with a for-profit. We sat down with Jessica James to explore how your nonprofit can establish a successful corporate partnership.
Jessica James of Jessica James Consulting and consultant to the nonprofit, PepUp Tech.
iATS: How can a nonprofit establish a corporate sponsorship even if it doesn’t have an industry-specific mission?
Jessica James: Regardless of what your nonprofit does, you should be able to demonstrate with statistics the societal implications and benefits of your mission being fulfilled. If you run a workforce development program for ex-offenders, what is the taxpayer cost savings of those individuals being gainfully employed and not receiving entitlements? Show them the larger-picture return on investment, in addition to showing them what a partnership will do for their company culture, brand, reputation, and relationship with clients/customers.
iATS: How can nonprofits build relationships in their communities that could potentially lead to corporate sponsorship?
JJ: By creating meaningful volunteer opportunities and then maximizing the relationships you already have. Where do board members work? What are their corporate networks? Start by asking every board member to provide you with this list, and then work through those lists by inviting the corporations to your signature volunteer events. Once they attend and are “wowed,” explore hosting a customized day of service for them, or partnering on a co-branded product or article/blog post about the issues your nonprofit is tackling. Always have another invitation to keep them engaged, and ensure you are making a direct financial ask that matches the investment you put into creating and maintaining the relationship.
iATS: As a consultant, what is the biggest mistake you see nonprofits make when looking for a corporate sponsorship?
JJ: Not treating the sponsorship like a business deal. Too many nonprofits still adhere to the “tin cup” mentality of begging for scraps. If you are going to gain a serious investment from a company, you need to be seen as their equal, as their partner. Clearly articulate what is in the partnership for them (i.e., employee engagement and thus improved satisfaction and lower turnover; positive press and endless content for social media; reputation management; brand building) and prove to them the bigger societal return on investment for contributing to your organization. Then put a number to it that is commensurate with the value you are offering them. The more you play small and act like “we’ll be grateful for whatever we get,” the less seriously you will be taken and thus the less you will gain.
iATS: Why are CSR initiatives important for nonprofits?
JJ: Nonprofits are missing a tremendous opportunity for revenue generation and overall growth if they do not capitalize on this global trend in CSR. Companies are looking for reliable nonprofit partners, and if you can prove yourself to be that partner to them, they will want to snag you and keep you close. Corporate partnerships can bring so much more to a nonprofit besides funding, including volunteer hours, pro bono services, in-kind gifts, potential individual donors, board members and honorees, and awareness building. You do not have to be a big, national nonprofit, have a large team or a dedicated corporate giving staff member to launch a corporate giving program. Why not start today?
Start seeing the benefits of a corporate partnership
In a global economy that demands corporate responsibility, now is the best time for nonprofits to start establishing partnerships and creating a plan to engage members of their communities. Since both organizations benefit from the partnership, nonprofits need to position themselves as equal and ensure both organizations are clear on what can be gained. Engaging in a partnership is an investment for both the nonprofit and the corporation, and goes beyond a team of volunteers showing up for a few hours in matching T-shirts. By considering what makes a good partner and marketing the benefits for both your organization and the corporation, you can establish a symbiotic relationship that has a lasting impact on both sides.
Images provided by PepUp Tech and Jessica James Consulting.