Nonprofit Sector

Partnering With the Nonprofit Sector

24 Jun 2016

If you have been paying attention to consumer sentiment over the last 5 years, it is pretty clear that the Gordon Gekko attitude of “greed, for lack of a better word, is good” has shifted towards social responsibility in the business sector. All you need to do is look at Occupy Wall Street and the message it delivered, that corporate America needs to be part of the solution towards social change. Those businesses that have embraced and marketed their altruistic sides, finding ways to partner with the nonprofit sector, have done well. Believe me, in the world of social media, word gets out quick. Just look at how many companies joined the ALS bucket challenge to cash in some of the viral goodwill that it created. 

So why should you embark on greater partnering with the nonprofit sector? There are many positives that can come from it: 

1) Increased Revenues: Tom’s Shoes created a program that for every pair of shoes they sell, they will donate a pair to a person in need… “one to one.” During 2014, it is anticipated that the Company recorded over $300 million in sales, approximately 30% directly to consumers on it’s website, effectively eliminating the middleman and increasing margins. This is incredible for a company that sold its first pair of shoes in 2006. Many other companies have joined the Tom’s Shoes approach to growing their revenue by being socially responsible, including Long Island’s Elara Foodservice, a national distributor of foodservice supplies, who donates a meal to a food pantry for each case of product the company sells. Elara’s CEO, Dan Grinberg, has said he can directly correlate increased sales to his social mission of helping to feed the hungry. 

2) Improved Image: Owning a business, we all know how hard it is competing for customers and sales. You need to find ways to differentiate yourself from the rest of the pack. Partnering with the nonprofit sector can be a game changer. Many major companies have set up corporate responsibility departments to give back to the community and show that they are good corporate citizens. Other prominent companies have also entered into partnerships with nonprofits. Ben & Jerry’s, for example, purchases fudge brownies from Greyston Bakery, a social enterprise venture of the Greyston Foundation, a nonprofit organization in Yonkers, New York, to make its fudge brownie ice cream.

3) Access to Product: Savers, Inc., a for profit company that runs thrift stores across the United States, has a distribution network and it’s retail outlets, but has had difficulty obtaining higherend product for it’s stores, until it joined forces with Big Brothers/Big Sisters. Big Brothers/Big Sisters was able to obtain clothing donations, which it sells to Savers for resale in its thrift stores.

4) Reduced Marketing Costs: How often do you see Tom’s Shoes ads? Yet the Company booked $300 million in mostly B to C (business to consumer) sales. Why is this? The power of the people. Tom’s has been embraced as a true social enterprise, so his mission of “one to one,” donating a pair of shoes for each pair sold, has resonated with his customers who have shared his message through numerous social media outlets to people that they know. As a result, Tom’s is doing well by doing good.

5) Endorsements: Nonprofit endorsements can go a long way in helping a company sell its products. If your product is endorsed by the American Heart Association, or the American Cancer Society, or the Diabetes Foundation, it could mean a significant up-tick in product sales. Take the time to explore natural nonprofit affinities to your products, and figure out how much of an impact an endorsement can have.

6) Employee Morale: A company that gives back to its community typically fosters a corporate culture that attracts and retains employees. With the rising cost of hiring and retaining quality staff, and the higher level of turnover that exists today, if you can reduce your turnover through increased morale and improve your chances of landing top talent, why wouldn’t you do it?

By considering ways to work with the nonprofit sector, developing a triple bottom-line mentality (people, planet, and profit), and truly becoming a good corporate citizen (not just when profits are up, but making it part of your corporate culture and DNA), you can grow your business, improve your image, increase employee morale, and drop more money to your bottom line. Social enterprise is the new wave in business operations… are you ready to ride it?