Archive for December 20, 2010

There are barriers to mutually beneficial relationships, partnerships, and collaborations within and between the for-profit and non-profit sectors. Over the next few months, I’ll take a stab at addressing a few of the barriers I have experienced over the past 15+ years from both sides of the isle. Some I was able to traverse, some I went around, and some flat stopped me where I stood. Nevertheless, there are significant benefits to both the non-profits and for-profits through the creation of what I call “Mutually Beneficial Collaborations” or MBC’s that hopefully will result in “Mutually Beneficial Relationships” or MBR’s. Forgive me. I love acronyms. Don’t worry, I will define both MBC’s and MBR’s in later submissions. Now, I am absolutely confident there are case studies upon case studies and examples upon examples of non-profit and for-profit collaborations that worked and even more that were either not as beneficial as expected or were doomed from the start. I have a few in each category that I can expand on from a first hand perspective, and will. However, I would like to look at things from a broader, more “fundamental”, viewpoint. And, if that wasn’t thrilling enough, I will do what I can to provide as many “what not to do’s” as “what to do’s”…being that I know as many or more of the former as the latter.  In light of the last statement, indulge me in a short sidebar so I can provide a little insight into my approach.

The M.O., or modust operardi, of most consultants or advisors, me included to some extent, is to take a look at what a business or organization is doing: its systems, methods, strategies, applications, etc…, and make recommendations on ways the business or organization can improve, fix, cure, sure-up, galvanize, improve, globalize, modernize, and so on and so on, its current systems, methods, strategies, applications, etc… In many cases, the recommendations work or at least have the potential to work. In others, the recommendations have no chance of even landing in the same hemisphere of working or being a viable solution. The really cool thing here is that the same recommendation could be given to two different groups and will be a raving success in one case and an utter failure in another. Moral of the story: Each organization or business is different and unless the consultant or advisor gets to know the client, to include but not limited to: the client’s culture, wants, past successes and failures, current capabilities and resources, expectations, etc…, at best it’s a calculated guess or a SWAG (scientific wild … guess) as to whether the recommendations will work. Therefore, it is possible that in some situations, making recommendation on potentially what “not” to do is better than recommending what to do. We’ll talk about this more later. Back to the issue at hand.

Let’s take a quick look at both sides of the coin…

Non-Profits:

In 2007, over $295B in private donations (includes individual, corporate, and foundation donations) were given to charitable organizations. In 2005, 73.8% of public charities reported less than $500K in annual expenses, 82.3% reported less than $1M in annual expenses, and 93.7% less than $5M. * Currently, 1,514,821 tax-exempt organizations are registered with the IRS. This number includes 956,760 public charities and 112,959 private foundations. In addition, 443,464 other types of nonprofit organizations, such as chambers of commerce, fraternal organizations and civic leagues, are registered with the IRS.*

  • These organizations are meeting societal needs through the services and programs they provide, usually on a local or regional level.
  • The lack of available resources or perception of the lack of resources, in many cases, restricts the ability to obtain adequate, in either numbers or experience or both, staffing and/or systems.
  • Are passionate about the cause and those they wish to serve but inexperienced in many aspects of business, marketing, branding, fundraising, etc…and don’t speak the language of “ROI” that is spoken in today’s marketplace and in homes across America and absolutely necessary in establishing mutually beneficial relationships and support networks.
  • There is often no available funding for training, consultants, etc… And when funding exists, often the solutions presented by outside groups and consultants either conflict with the organization’s culture – internally and externally, exceeds organization’s capacity to implement, or are simply inadequate to meet the organization’s needs because…“You get what you pay (or can pay) for.”
  • Non-profits, like businesses, are territorial and protective of their donors, sponsors, partnerships, etc…, as they should be, but sometimes cannot see the benefit of relationships with other NPO’s and causes.
  • Think that all the money for sponsorships and support is in corporate America marketing departments and don’t know there are multiple revenue sources within corporate entities…sources that don’t reside in marketing.

For Profit Sector, Individuals, Family Foundations, etc…

  • Give charitably to organizations or causes because “it’s who we have always supported” despite the lack of synergy or staff buy-in/support
  • Want to support charities and philanthropic endeavors but….
  • Not sure of the right charity or organization to support
  • Cannot justify support or see the benefit, from an ROI perspective, of charitable giving or involvement
  • Do not have the time, staff resources, or experience to research and find the “right” charity or organization, one that compliments the company or donor’s: culture – internally and externally, capabilities, mission, etc…, or create the company or donor’s own philanthropic initiative
  • Don’t trust the nonprofit’s ability to “handle” the funding and/or resources given

By no means are the above lists exhaustive. They simply include a few stats as well as personal observations through my own experiences with both sides of the profit isle.  Nevertheless, I will be looking at a few of the above as well as others over the next few months. I truly believe there is great benefit to be had by both the for-profit and non-profit at any level, from multi-national organizations and businesses to the smallest local organizations and businesses, through strategic, well thought out, innovative, and timely MBC’s.

Until next time…

*(Source: The Urban Institute, National Center for Charitable Statistics, Business Master File 12/08)

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