Many companies interested in giving back to their communities are seeking opportunities for charitable giving. A rewarding way to channel this giving is through the formation of a partnership between a for-profit business and a non-profit, community benefit organization. Focused giving through a partnership arrangement with a community benefit partner can provide a multitude of rewarding and productive benefits.
First, and most importantly, a partnership is a rewarding method for a business to directly participate in the delivery of a community benefit. Second, strategic partnerships provide a way for businesses to build stronger relationships with their customers, employees, and for-profit business partners. Finally, partnering can allow a business to help others while at the same time creating an opportunity to increase profits. Partnering coupled with strategic marketing can serve as an avenue for businesses to reach new and diverse customers or clients, and donations to qualified non-profit organizations can also produce tax-saving deductions.
A business should choose a partner that shares its mission and values in order to maximize the positive benefits associated with partnering. In short, businesses should choose partners that are “On-Brand.” For example, a builder could choose an organization like its local Habitat for Humanity; a clothing store could partner with a personal development organization like Dress for Success; or a law firm could partner with an organization that provides legal support to low-income families. Perfect affinity may not always be achievable, but partnerships can still develop where the altruistic interests of a business align with the purposes of a community benefit partner.
In order find an “On-Brand” partner an introspective examination must first be carried out. Identify the purpose, mission, and values of your business. Clarifying your companies’ purpose will make it easier to identify natural partnerships. Next, find out which causes your customers support: partnering with a community benefit organization that your customers support is a good way to build customer loyalty and goodwill. Finally, don’t forget about your employees: supporting an organization that champions a cause your employees support and care about will foster a positive workplace environment and ensure participation.
After you have identified the type of partner you wish to work with, the next step is choosing a specific community benefit partner that operates in the field. Important considerations include: size and location, what type of support the potential partner needs, leadership of the community benefit organization, legitimacy and trustworthiness, and potential negative consequences.
The first factor to consider is the size and location of the potential partner. On one hand, partnering with a national organization may produce more recognition. However, choosing an organization that is both geographically local and active in the local community can bring more satisfaction to the business principals and employees by providing an opportunity to witness firsthand the results of their efforts and donations. Of course, supporting a local branch of a national organization can, to a certain extent, provide both national recognition and personal satisfaction.
Next, determine what type of support the potential partner needs. Certain partners will benefit most from financial contributions, while others may benefit more from manpower in the form of volunteer hours, shared expertise, or leadership (e.g. serving on a board or directors or providing legal or accounting advice). Harmonize the benefits your business is capable of offering with the needs of your partner. If your business is not in a position to donate large sums of money, look for an organization that can benefit from your know-how, resources, or volunteer time. If you would rather financially back an organization rather than donate time on the ground, there are plenty of organizations that would suit your needs. Making this determination at the outset will avoid surprises as the partnership develops.
Third, look into the potential partner’s leadership to ensure compatibility. Think of the partnership like a relationship, you must be able to get along in order to succeed. The principals of the business should meet with the potential partner’s board of directors and executive or other officers. Make certain a strong working relationship can be fostered with the people you will deal with on a regular basis. Note that the composition of the board of directors changes more frequently than the executives in charge. Discord between for-profit business principals and community benefit leadership is a sure-fire way to ruin a partnership.
Next, investigate the legitimacy and trustworthiness of the prospective partner. First, make sure the prospective partner is validly registered as a tax-exempt organization with both the state and the Internal Revenue Service. If your partner doesn’t meet these qualifications your business’s contributions may not be tax deductible. In order to determine legitimacy you can check certain electronic databases (e.g. GuideStar.org) or ask the non-profit for its letter of determination.
Further, you should carry out some basic due diligence. A reputable organization will define its mission and goals clearly, have measurable goals, and use concrete criteria to describe its achievements. Ask to review the organizations’ financial statements because ensuring that a prospective partner’s finances are in order is important. When reviewing finances, a business should decide whether it wants to partner with an organization struggling to make its charitable goals, or a successful one which has consistently met its goals. Both types have their own governance and financial issues, but of different kinds. For instance, a successful organization has the advantage of community recognition, but an inflexible governing body may make responding to new challenges difficult. On the other hand, a newer organization may have a dynamic governing body, but could be struggling to receive necessary funding.
Additionally, evaluate the reputation of the potential partner and any negative consequences that an affiliation could cause. Assess the reputation of the organization by interviewing members of the community and carrying out research. Aligning with a partner that has a bad reputation can harm the for-profit business’s reputation, which would be completely counter-productive. Conversely, partnering with an organization in good standing can serve to bolster both entities’ reputations.
Finally, when choosing a partner, a business must be mindful of unintended consequences such as employee dissatisfaction with the prospective partner or adverse publicity. Companies should determine whether the potential partner’s mission or values, even though legitimate and charitable, conflict with the companies’ values or its employees’ beliefs. For example, partnering with an organization that supports abortion or gun rights may lead to negative publicity or disenfranchise employees or customers. Similarly, it is important to ensure that there are no circumstances on the horizon that will negatively affect the potential partner’s reputation or standing in the community down the road.
To sum up, partnering with a community benefit organization provides a business with a unique opportunity to give back to the community in a meaningful way, while at the same time promoting its business and bottom line. Companies choosing to take on a community benefit partner should plan ahead in order to maximize the benefits of the relationship. Finding a partner that naturally fits with a business’s values and mission will foster a rewarding relationship for years to come.