Building Corporate Alliances and Partnerships

Nonprofit Leadership: Maximizing Impact

Mission of Nacientes Palmichal To preserve and protect natural resources

specially the water resource of the Nacientes Palmichal formed the Negro y Tabarcia rivers basin and assure the water supply for the habitants, agriculture and industrial production.

Main programs Environmental education (community and

schools)

Rural Ecotourism with benefits being shared by the organization and community

Sustainable production practices working with individuals and corporations

Crafting Alliances – why do it?

Convergence Phenomenon CSR – what it and what drives it? A framework for evaluating potential alliances Some models of alliances Some risks… Making it work

The lines between businesses and nonprofit are blurring…

Convergence

CSR refers to business practices intended to have a positive impact on society – not just the company’s financial bottom line.

Source: Institute for Global Ethics

Corporate Social Responsibility

Doing Good Business

“We believe that the winning companies of this century will be those that not only increase shareholder value, but increase social and environmental value.”

Carly Fiorina, CEO, Hewlett Packard

Nonprofit Leaders can leverage this enlightened business mentality

The UN Global Compact is the largest voluntary CSR initiative with over 5000 members (short video)

CSR means aligning business operations with fundamental and universal values:

Human rights Labour rights Environmental standards Anti-corruption & transparency

Some drivers moving business towards CSR practices include:

Growing investor pressure

Some of the benefits experienced by businesses adopting CSR measures

• Enhanced brand image and reputation

• Increased sales and customer loyalty

• Greater productivity and quality

• More ability to attract and retain employees

• Better use of renewable resources

• Community relations

• Product safety and decreased liability

Improved

Financial

Performance

Discussion Questions inspired by ‘Capitalizing on Convergence’

Do you have some concerns with CSR? What can nonprofits learn from

businesses? What can businesses learn from

nonprofits?

A conceptual framework for looking at corporate alliances

Loss making Break even Profitable

Mission enhancing

Mission neutral

Missioninterfering

Consider Yes Yes

No ? Yes

No! No Scrutinize

Source: Corporate partnerships: A Guide for the nonprofit manager. The national center on nonprofit enterprise

Some options for corporate-nonprofit alliances

1. Event sponsorships – financial or other contribution in exchange for recognition

2. Transaction-based promotion: Donation in direct proportion to sales revenue. E.g AmEx.

3. Direct sales – partner with business to sell products under their own name

4. Solicited donations – corporations help solicit donations by using their own channels

5. Product approvals – lending your “seal of approval” to corporate products for a % of sales (royalty)

6. Shared resources – pro bono work by corporations

Source: Corporate partnerships: A Guide for the nonprofit manager. The national center on nonprofit enterprise

Alliances should be structured as a win-win arrangements

Nonprofit leaders should ask themselves the following questions when thinking about building alliances:

1. What is our image?2. Do we have brand recognition?3. Is our cause especially attractive to certain

industries/companies?4. Is our target audience particularly relevant to certain

corporations?5. Are we local, national, or int’l?6. Do we have board members we could leverage?

Proactively develop a strategy for corporate alliances

Does your nonprofit organization have a natural corporate partner profile? (Workshop in small groups – pick one person to volunteer his/her org.)

1. Which alliance model might make sense for you? (see last 2 slides and go through the 6 questions)

2. Come up with a specific corporate partnership opportunity for your nonprofit organization

3. How does your idea present a ‘win’ for the business?4. What benefits does your organization get?5. What internal obstacles may you face?6. How could you initiate such an alliance while mitigating

the risks?

Making the alliance work Open and clear communication between

partners Terms specified in a contract Routine track of progress

“When these work they have great payoffs for both partners – as well as for the public.”

What are some of the risks to nonprofits?

Some of the risks to nonprofits Wasted resources Reduced donations Loss of organizational flexibility Tainted partners Dependency of corporate funding Overwhelming success!

Source: Profits for Nonprofits - Andreason

Sharing partnership experiences Positive experiences Negative experiences Lessons learnt…

Source: Profits for Nonprofits – Andrason

“The leaders of nonprofits and businesses would be wise to shift their current mind-set from one of “us and them” to one of “we”.

Austin J, Gutierrez R, Oliastri E, Reficco E. Capitalizing on Convergence. SSIR (2007).

Time permitting

Cause-related marketing – and its difference from CSR Cause-related marketing (CRM) is defined

as the public association of a for-profit company with a nonprofit organization, intended to promote the company's product or service and typically to raise money for the nonprofit.

CRM is generally considered to be distinct

from corporate social responsibility – why? Source: The Foundation Center http://fdncenter.org/learn/faqs/html/cause_marketing.html

“The era of convergence is upon us” Creating Value – social and economic value

Managing Stakeholders – both are broadening their definition of stakeholders

Hybrid Organizations – for-profit and non-profit subsidiaries

Mobilizing Capital – social venture capital to Socially Responsible Investing

Austin J, Gutierrez R, Oliastri E, Reficco E. Capitalizing on Convergence. SSIR (2007).

Socially Responsible Investing Socially Responsible Investing (SRI) is an investment

strategy that integrates social and/or environmental criteria into financial analysis.

SRI is catching on with many individual and institutional investors who seek to: Align their investment portfolio with their personal values by

avoiding companies that do not meet certain standards.

Encourage improved corporate social and environmental performance through an active investment strategy.

Identify companies with better long-term financial performance through the analysis of social and environmental factors.

Source: Calvert Group : http://www.calvertgroup.com/