When it comes to pursuing market success, for-profit businesses and nonprofit organizations often seem to stand on opposite sides of the financial spectrum. The former group is stereotyped as being mercenary, gain-focused, and unsympathetic; the latter is known for being well-intentioned, but perpetually underfunded, understaffed and under-supported. Nonprofits and businesses are remarkably different both in how they run and how people perceive them. From a glance, their priorities appear to clash. 

Looks, however, can be deceiving. As Bruce Burtch, cause marketing guru and noted nonprofit author, puts the matter in an article for Third Sector Today, “There is nothing in business today that provides as much economic and social benefit, on as many levels, to as many stakeholders, as a strategic partnership between any combination of the nonprofit, for-profit, education and government sectors when focused on the greater good. Nothing else comes even close.”

Some might say that Burtch is somewhat optimistic in his comments. After all, while most people - regardless of whether they are consumers, employees, executives, community leaders, or stakeholders - care about their community and the greater good, most tend to confine their efforts to slipping a few dollars into a collection box or donating a couple of weekend hours to a cause. Forging a sturdy partnership between a business and a non-profit takes time and effort; why should either party divert their resources to helping the other? 

Because, I would argue, Bruce Burtch is correct - a partnership between for-profit businesses and non-profit businesses has an incredible potential for mutual benefit and growth. The very differences that set nonprofits and for-profits apart are what make them so complementary and useful as partners. 

Partnerships Boost Awareness

For nonprofits, forging ties with businesses in the community has a few clear perks. Nonprofits naturally garner more contributions than they might have been able to attract independently and also have the chance to spread awareness of their organization and cause across the company’s established employee and customer bases. With any luck, some of the donors and volunteers they recruit through the initial partnership will remain onboard for years to come. 

For businesses, the benefits are a little more subtle. Companies might not attract new investors or employees on the strength of their philanthropic efforts, but they will develop a reputation for being a community-oriented business. This positive aspect will feed into potential customers’ first impressions of the company and its brand and increase brand recognition overall. 

Importantly, nonprofit partnerships could even lead community members to choose philanthropically-aligned businesses over their competitors; in 2014, a study conducted by Cone Communications and Echo Research found that given similar price and quality, 90% of shoppers worldwide would prefer to consume brands that support good causes. 

Partnerships Create Community Goodwill

When nonprofits partner or put on a philanthropic event with a company, the two boost their visibility in the local community. The news creates an opportunity to circulate more information about the nonprofit’s cause and efforts and empowers the nonprofit to develop more ties with other local businesses and organizations. One corporate partnership can thus serve as the first in a series of stepping-stones towards greater visibility and community engagement. 

Businesses also benefit from community goodwill. By participating in or sponsoring events with nonprofits, they can establish themselves as local changemakers and inspire greater loyalty from their local consumers - a benefit which should never be underestimated, given that attracting a new customer can be five to 25 times more costly than retaining an existing one. 

Partnerships Lift Employee Spirits

Just as nonprofits benefit from increased volunteerism and contributions when they work with corporate organizations, so too do their partners enjoy increased employee morale and strengthened corporate cultures. 

As I mentioned above, people want to do good - and will be more likely to give their time and energies in the future. One recent study from Deloitte found that employees were twice as likely to see their corporate culture as “very positive” if their employer took part in company-wide volunteer activities. Employees tend to appreciate their employers more when they know that the company cares about their community. Moreover, coming together for a cause can promote better in-office rapport and strengthen interpersonal relationships; this, in turn, can lead to better morale, increased productivity, and - by extension - heightened profits. 

Partnerships between nonprofits and for-profit businesses have more potential value for causes, communities, and corporate interests than can ever be captured on a ledger. Consumers, employees, and locals care about philanthropic interests - and so, as business leaders, should we. 

About the Author(s)

 Jake   Croman

Jake Croman is an entrepreneur, philanthropist and college student who currently attends the University of Michigan. Jake Croman's networking experience and logistical know-how extends to his work fundraising on behalf of charitable organizations such as St Judes Children's Hospital and the Eddie Croman Foundation.

Entrepreneur and Philanthropist, Student University of Michigan
Ways Small Businesses and Nonprofits Mutually Benefit from Each Other