The world of business is changing. The advent of the internet and social media outlets such as Facebook, Linked-In, and Twitter, have dramatically changed the way people get information. People are starting to shy away traditional news outlets and instead are getting more information from friends, industry websites, and celebrities. This has similarly changed how consumers and businesses communicate. Take a look at Occupy Wall Street, the success of companies such as Tom’s Shoes, and how major corporations are positioning themselves in the marketplace. It is clear that it is no longer about a single bottom-line focusing solely on profit. Businesses today need to think triple bottom-line and focus on people and planet in addition to profit.
Businesses are starting to embrace social enterprise as a large part of their corporate culture. In its simplest form, social enterprise is utilizing business concepts to resolve social issues. For example, solving homelessness through entrepreneurial thinking, where homelessness is addressed in a self-sustaining business model. Many businesses have found that creating a joint venture or business alliance with a nonprofit organization has helped to create new business opportunities for them.
Savers and Big Brothers/Big Sisters:
Savers runs a chain of thrift stores around the country. Savers had the distribution network, but it needed an avenue to obtain product. Savers entered into a business relationship with Big Brothers/Big Sisters of LI (“BBBSLI”), whereby BBSLI solicited the donation of clothing and Savers provided the distribution network to sell the clothing. BBSLI obtained much needed capital without having the added organization stress of running a thrift store, and Savers, who already had a proven retail chain, received much needed inventory to stock its stores at competitive pricing.
Ben & Jerry’s Ice Cream and Greyston Bakery:
Greyston Bakery is a bakery run by the Greyston Foundation, a nonprofit organization focused on helping people and families reach self-sufficiency. The bakery hires people in underserved areas and helps them to develop skillsets towards long-term employment. In the 1980’s, the bakery entered into an agreement with Ben & Jerry’s to provide all the fudge brownies for Ben & Jerry’s fudge brownie ice cream. This alliance allowed Ben & Jerry’s to assist in the social mission of helping to fight poverty and homelessness and to demonstrate that it is a strong corporate citizen. A similar arrangement has recently been developed between 1-800-Flowers and Independent Group Home Living’s (IGHL) Flower Barn, a greenhouse and nursery run by IGHL that hires individuals with developmental disabilities. 1-800-Flowers recognizes the social and business benefit of establishing this collaboration and will be looking to establish similar collaborations across the country.
Elara Foodservice Disposables and Island Harvest:
Elara manufactures and distributes plastic food service gloves. From the very beginning, Elara’s President, Dan Grinberg, felt the need to give back to the community. Taking a page from Tom’s Shoes, Elara donates a meal to a food pantry for every case of disposable gloves it sells. This is a key component of Elara’s marketing message and it is part of their corporate DNA. As a result of this arrangement, Elara has been able to attract and retain staff, has seen an increase in sales, customers have asked to piggy-back into their donation program, and they have helped to foster and develop a culture of giving. Although the donations cut into Elara’s margin, the company has seen a steady rise in its overall profitability attributable to an increased sales volume. These are just a few examples of collaborations between the nonprofit and for-profit sectors. Social enterprise is quickly gaining traction across the country and businesses are realizing the need to be good corporate citizens. With cutbacks in government funding, increases in demand for services, and increased competition for contributions, the nonprofit sector is seeking new ways to partner with the for-profit sector.
Collaboration with the nonprofit sector could provide a real benefit to your company. In deciding whether this may be a good fit for you:
• Determine whether you are experiencing a high employee turnover. Having a more socially responsible focus can help to increase morale within your company.
• Develop a workable strategy. There are many different ways to collaborate with the nonprofit sector. Find one that will be mutually beneficial for both your company and your nonprofit partner.
• Prepare to make a change to your overall corporate mission/focus. Build social enterprise into your DNA and make it part of your corporate culture. That is the only way to develop long-term benefit.
• Incorporate the nonprofit affiliation into your marketing strategy. Utilize it in all aspects of your marketing including in your advertisements, on your website, etc.
Most businesses think of the nonprofit sector as a one way street, but it does not have to be. The sector could provide an effective partnership that provides real tangible benefits to both your company and its bottomline.
Kenneth R. Cerini, CPA, CFP, FABFA
Ken is the Managing Partner of Cerini & Associates, LLP and is the executive responsible for the administration of our not-for-profit and educational provider practice groups. In addition to his extensive audit experience, Ken has been directly involved in providing consulting services for nonprofits and educational facilities of all sizes throughout New York State in such areas as cost reporting, financial analysis, Medicaid compliance, government audit representation, rate maximization, board training, budgeting and forecasting, and more.