The For Profit ConnectionPosted: May 23, 2013
The link between non-profit organizations (NPO’s) and for-profit businesses (FPB’s) is an increasingly important one. As always, future government funding levels of charitable causes remains uncertain.
We should keep in mind that many NPO’s are very small. The Nonprofit Almanac 2012 [NCCS] reports over 80% of public charities with operating budgets of less than $1MM and 45% under $100,000. Many of these organizations have a limited ability- beyond the traditional tax benefit for charitable contributions or another type of tax credit like the EITC- to offer a return on investment that would be competitive with alternative options typically available to US corporations. For example, in the human services sector, nonprofit clients typically have basic needs like food, clothing, housing, transportation and employment. Unfortunately, it is unlikely those same clients will have access to disposable funds that allow them to turn around and support a corporate sponsor through the purchase of their high end products or services. It is likely that those same NPO clients are living in a social environment with others who share their economic plight and are equally unable to support a FPB. In summary, sponsorship of a small nonprofit often provides much less visibility to paying customers for the FPB than could be gained through other marketing activities.
Now to the harsh reality: some corporate sponsors cannot move past these limitations. However, looking beyond the financial return on investment, small nonprofits have much to offer that cannot always be measured in dollars and cents. How important is this to a specific FPB? That is always the wild card. The moral compass of each FPB is certainly as different as the people who govern them.
With that backdrop, I would offer the following suggestions to small NPO’s.
- Get to know the staff at the corporate Community Relations departments in your service area. This should be your first stop and a good place to openly share information about the value systems of your respective organizations.
- Keep a pulse on new business start-ups and local economic news. This will allow you to learn more about current developments in your business community and who the real movers and shakers are. Subscribe to legal or business publications, if necessary.
- Always try to leverage existing contacts to get new prospects.
- Wealthy individuals/business owners sometimes set up their own private foundations. Be sure to explore this avenue.
- Everyone knows others and is a donor suspect. Sometimes the path you take to get to the right person will be a windy one. In fact, it will rarely be a straight line.
- Your time-and the FPB’s time- is limited. Be focused and use it well. Having your dots connected for the FPB will ease the process. Prepare a snapshot of your organization too.
- Plan facility visits for potential sponsors. Face to face is how most deals ultimately get done.
- Always issue press releases showing how your partnership benefited the community.
- If you need help with the research and cultivation process, certainly seek it out.
If you have not already done so, don’t forget to pick up your free copy of the Multiplying Good program. This free blueprint is available at Wobbly Nonprofit.