One of the biggest pluses of starting a business is the ability to give back. Your ability to fund local, national and global causes can pay off in a myriad of ways. But it’s essential that before you write your first letter, you do a little behind-the-scenes work. The last thing you want is to make an avoidable misstep when setting up your business philanthropy attempts.
What types of errors are common, especially when companies partner with non-profit organizations? A major challenge is a gap between what each party wants or expects. Another is the inability to work together towards a shared goal. And it’s never good to be so overly generous that you can’t deliver what you promise, jeopardizing your company’s bottom line.
The good news is that it doesn’t have to be difficult to build relationships with nonprofits. All you have to do is follow what can best be described as the “golden rules” of this type of partnership. If you do, you will reap the rewards. These include everything from better brand recognition to higher employee satisfaction scores, especially when you get employee buy-in. Here are six golden rules that should guide your non-profit partnerships.
Golden rule #1: Choose a partner whose values align with your company’s.
There are approximately 18 million non-profit organizations in the United States. With those numbers, you should be able to find a match that shares your company’s mission and values.
Molly MacDonald is the founder of the Pink Fund, a charity offering 90-day grants to cover non-medical funds for qualifying breast cancer patients. In her experience, choosing a nonprofit that aligns with your vision and purpose is essential.
“There has to be an appeal to their mission, company culture, voice, branding,” explains MacDonald. “If the company is genuinely excited about the partnership rather than just ticking a box, it will make for a much more successful partnership.” She adds that these kinds of genuine connections often appeal to consumers looking for authenticity from their favorite brands.
If you’re still not sure which charity to support, even after careful research, conduct a survey and ask your employees for suggestions. Or, if you prefer, give them a list of possibilities and let them choose. This is the first step in getting their buy-in.
Golden rule #2: Make your partnership visible.
It’s great to support a non-profit organization. But you are under no obligation to hide your relationship. In fact, most companies like to highlight the good deeds they do. A good example of this is TOMS Shoes.
Not a TOMS enthusiast? TOMS donate a pair of shoes every time the company sells a pair. It’s a great trade and makes a lot of sense. This humanitarian arrangement has been in place for more than ten years. And TOMS isn’t shy about using its wider impact as a key differentiator.
You don’t have to feel like you’re being insincere by talking about your charitable partnerships. Rather, you should openly discuss them on your website, your blog, your social media pages – you name it.
Over time, you become associated and intertwined with the nonprofit. This is good for both your brands and the people you serve. Returning to TOMS, think how rewarding it is for customers to know they didn’t just buy shoes. They also bought footwear for children who might not have one. That’s a good reason to continue buying from TOMS in the future.
Golden rule #3: Get sound financial advice from a tax professional.
To get the most out of your partnership, think about the tax implications. The less you pay in taxes each year, the more you may be able to share. For example, you can give your employees a special year-end bonus thanks to your company’s philanthropic efforts.
Unless you have a CFO who understands tax law inside and out, hire a professional before making any agreements. You don’t just have to know how you can spend a lot but what your limits should be. Having a realistic knowledge of how your donations will affect your taxes will give you peace of mind.
Don’t forget to ask your tax advisor about matching your employees’ gifts. Let’s say you support a specific charity and give your employees the chance to do the same in paychecks. Can you achieve even higher tax benefits by making a match up to a certain percentage?
No leader wants to pay Uncle Sam more than is absolutely necessary. Knowing your tax parameters will help you build a financially and philanthropically successful partnership.
Golden rule #4: Put everything in writing.
Word of mouth can go south. The problem usually comes down to interpretation. To avoid this conundrum, always insist that your contractual partnership be set out in a legally binding agreement.
What belongs in your written contract in your non-profit partnership? Nothing is really set in stone. Make sure all bases are covered so no surprises – and no balls fall. Pink Fund founder, Molly MacDonald, says the New York State Attorney General has some best practices guidelines that have helped them when working with business partners
Keep in mind that this will (and should) take some time. It’s not your job to rush the process. Instead, focus on crossing all the “T’s”. A good place to start is to walk forward as a team through the flow of your journey. What does that journey look like? Who is responsible for each part of the trip? By addressing these broad questions early, any stumbling blocks can be removed.
While you can enter into a formal partnership without an attorney, don’t override an attorney’s authority to have it reviewed. Paying up front for someone’s expertise can save you a lot of headaches in the long run. And if you or the nonprofit violates your contract, you have everything in writing.
Golden Rule #5: Start small to allow room for growth.
You may have read about IKEA’s recent collaboration with an entire city in Sweden. Though you were inspired, you were equally impressed – and afraid you couldn’t possibly do the same. Relax: Your first nonprofit partnership doesn’t have to be extraordinary or huge to make a difference. Honestly, if you’re testing this kind of arrangement, you should probably go small rather than IKEA-large.
One way to start little by little is to find a way to volunteer for or with the charity. If it’s local, like a food bank, you could pay your employees to help out for a day. If it’s worldwide, consider funding a special event or making a one-time donation.
As you get to know the other nonprofit and its needs, you can strive for a more engaged partnership. However, taking a conservative path makes sense. After all, you might discover that the charity is harder to work with than you thought. In that case, it’s better to know before going too deep.
Don’t be afraid to plant these little seeds over some charities just to see which ones “stick”. You will probably get a good sense of which ones put you in the best light with employees or customers. That is two thirds of the employees attracted to targeted employers And 55% would work for one even though the salary was lower. When you support charities that your team approves, they’ll let you know.
Golden Rule #6: Set stats to track your progress.
It’s always a smart idea to measure all your campaigns and initiatives. Still, deciding how to measure your nonprofit relationships can be a little confusing. Ultimately, though, you need to record some stats or you’ll struggle to know if you’re making progress.
What are some metrics you might apply when researching your partnership with a charity? You may want to track every business that has come to you through your charitable marketing. As long as you have analytics in place, you can connect the dots between website visitors and sales. For example, you can find out how many people viewed your social donation blog and then made a purchase.
Another business KPI that could work for you are the hours employees spend volunteering. You may want to weigh that figure against any industry standards, if any exist. Even if it doesn’t, your stats can provide a baseline to rise above from year to year.
Just make sure you consistently stay on top of whatever readings you’re targeting. They give you insight into how well your partnership is working. They can also give you more to discuss in your next (or inaugural!) corporate social responsibility (CSR) annual report.
No one would argue that companies have a responsibility to do as much good as possible. And doing good starts with lending a helping hand in the form of strategic partnerships with non-profit organizations. By following a few simple golden rules, you can put all involved stakeholders on the path to success.