By Ali Telfer + T1 Partnerships team Environmental, Social, and Governance models are being quickly adopted by brands across Canada. Consumers, employees, and executives are calling for responsible, ethical, and sustainable business practices to be adopted.
A popular ESG strategy is for brands to create partnerships with not-for-profits (NFPs) that align with their company values – ideally, both parties can benefit from the partnership through the NFP's brand equity and the brand's partnership dollars.
87% of business leaders now agree that corporate social responsibility (CSR) is becoming more of a requirement for companies rather than a nice-to-have.
However, these partnerships, when poorly designed, can actually limit or impact NFP’s results. When an NFP partnership is not strategic, a brand runs the risk of being an obstacle, rather than an accelerant, to meaningful impact. If a traditional sponsorship model is applied to an NFP partnership (e.g., cash in exchange for assets, with ROI being measured asset-by-asset), this can create a power imbalance. NFPs that become reliant on the sponsorship revenue will do everything they can to renew the brand's investment, even at the expense of their own organization's goals.
Take the example of employee engagement initiatives. At first glance, a volunteer day for a brand's employees sounds like an excellent way to create awareness and affinity for the brand's ESG partnership. Yet these kinds of engagements can be resource-heavy for an NFP to deliver, making them vulnerable to the funder's request regardless of relevance to the NFP's organizational goals. For example, imagine you are an events manager for a non-profit, and a sponsor "donated" 25 volunteers, but you don't have any programs or training to be able to leverage their time optimally. This donation/resource suddenly becomes useless.
It is crucial that both parties have a clear understanding of the not-for-profit organization's needs, and collaborate to determine the most effective ways to make a positive impact. Brands that create a process where the NFP's best interests are at the centre of decision-making are best positioned for mutual success.
A better alternative would be for brands to understand whether an NFP needs extra volunteer labour to deliver on a community initiative. If the NFP would otherwise have to hire external help, a partner's volunteer time could offset costs and benefit both parties.
Our work with a Canadian not-for-profit supporting youth involved in researching and developing a platform to increase the impact their partnerships. We addressed the organization's need for unrestricted funds, creating a platform that serves as a rallying cry for brands interested in joining the cause. The opportunity for brands to support this not-for-profits, while providing the needed funds for the organization, is complemented by the concept of trust. The ideal partner supporting them trusts that they know how to best allocate partnership funds to make real community impact that partners seek.
To build meaningful partnerships with not-for-profits, brands can follow these practical steps:
Build equity by aligning goals and values. Meaningfully understand partners' objectives, values, and impact to ensure a strong foundation for collaboration based on shared goals. This will enhance credibility and impact perceptions.
Develop a joint strategy for mutual growth: Create a joint strategy outlining how both partners can work together to achieve mutual growth, leveraging each partner's strengths to maximize impact and drive business growth.
Determine which assets are accelerants and which are bottlenecks: Engage stakeholders and the community to tackle foundational bottlenecks and build a partnership proposal to accelerate growth.
Measure and evaluate the partnership's success. After defining what success looks like and what metrics will be used to measure that success, it is important to track progress and impact regularly. This helps in identifying areas for improvement, adjusting strategies, and continuing to drive mutual growth.
Authentic partnerships between brands and not-for-profits can be a catalyst for significant impact for both parties while creating lasting, positive change in society. By understanding what each party is (and isn't) looking for from a partnership, both brands and not-for-profits can achieve top and bottom-line growth while staying committed to their shared vision of a better world.
Reference: Making The Case For Socially Responsible Business 2022 (https://accp.org/)