As a nonprofit fundraiser, you know the value of partnerships that bring a consistent stream of revenue. After all, every nonprofit could use financial support from a partner in the for-profit sector.
Socially responsible consumerism has become the foundation on which nonprofit and corporate organizations can build meaningful relationships. The general public has raised its expectations of the corporate sector, requiring greater accountability on social and environmental issues.
That said, there are two main types of corporate funding for nonprofits beyond Corporate giving:
- Corporate sponsorships
- Corporate partnerships
Corporate Sponsorships for Nonprofits
Historically, the relationship between nonprofits and businesses has been sponsorship-focused. Sponsorship funding is where a company contributes to a nonprofit without a substantial gain in return, with the exception of tax deductions and a positive boost in their brand. Think of a bank sponsoring a 5k run to raise money for breast cancer research.
At their core, corporate sponsorships are a way for companies to align themselves with a charitable cause. With the continued emphasis on corporate giving, businesses both large and small are looking for ways to soften their images through:
- In-kind sponsorships where companies donate goods or services to an event or project
- Financial support is where an organization donates money to sponsor a program or event with the aim of building a positive reputation in the community
- Media sponsorships are where a company pays for the cost of advertising and promoting an event
- Employee giving through automatic payroll deductions, volunteer programs, and corporate matching gifts
For some companies, purpose comes first, which means an increased emphasis on corporate philanthropy. Such companies take active interests in their own communities, resulting in corporate giving that isn’t strategic or public in nature but rather geared towards causes they care about.
Corporate sponsorships can increase awareness around your cause and lend an aura of enhanced credibility to a less-established nonprofit. However, a poor partnership can tarnish the image of a nonprofit and result in diminished public support. For this reason, it’s of utmost importance to partner with a for-profit organization whose values match your own. It’s also a good idea to research the sponsor’s reputation and their history of giving.
Finding the right fit sponsor is often a challenging endeavor, resulting in many nonprofits foregoing the risk of aligning themselves with a corporation. But you’ll find that corporate sponsorships are often worth the risk when done right. Corporate sponsorship can open doors that lead to new donors and volunteers, allowing you to expand your nonprofit and reach new audiences.
There’s one problem, though: businesses are allocating less and less of their budgets to this classic corporate funding model. About a decade ago, corporations engaged in Corporate Social Responsibility as a way to leverage a nonprofit’s good works for their own PR. Today’s consumers are belief-driven, which means they want to buy from brands that take a stand as forces of social good. As such, companies are looking for more meaningful, long-term relationships with nonprofits, creating room for a more sustainable model of nonprofit support: partnerships.
But how are corporate partnerships any different from sponsorships?
Engaging Corporate Partners
Partnerships are about impact. They’re a way for organizations to balance their business objectives with the expectation to be socially responsible. Unlike sponsorships, corporate partnerships are more relational than they are transactional. Such partnerships are mutually beneficial – a social good partnership can increase customer loyalty and drive customer engagement while generating much-needed funds for a nonprofit.
Purpose-driven companies are taking over the world of business, which opens up new avenues of approaching corporate partners. Checkbook philanthropy doesn’t cut it anymore, which increases your chances of locking in a corporate partnership. Start by laying some groundwork, researching a potential partner’s business goals, and initiating an open dialogue. Corporate partnerships for nonprofits stem from the alignment of goals.
The world is changing; it’s time for nonprofits to adapt and switch from sponsorship to a partnership mindset. Call us today for a free, no-obligation consultation about your nonprofit.