Eyes Wide Open: Managing the risks of a new corporate partnership

Proportion
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For most charities, their greatest asset is their reputation. But many enter into corporate partnerships bewitched by the attraction of a big cheque and risk compromising this valuable asset.

Amnesty International is running a campaign against child exploitation and has named household brands such as Kellogg’s, Colgate-Palmolive and Nestle as profiting from child labour in the manufacture of their products. See the campaign here. A charity partnering with one of these companies will have to assess how this impacts on their own reputation.

In Australia, The Whole Pantry and its founder, Belle Gibson, were found guilty of breaching the Australian Consumer Law by engaging in misleading and deceptive conduct. Belle Gibson had claimed to have beaten cancer and made thousands of dollars with a book deal, apps and a wellness program claiming to share her miracle cure. A range of charities were promised a share of the proceeds, which never materialised. Did any of them think to check her claims of curing herself from brain cancer? They lent their good names to someone who was a fraud.

We were helping a children’s charity with their corporate partnerships when a book publisher approached us and offered to donate proceeds from a new range of children’s books. Sounded promising… until we did some more detailed checking on this enthusiastic new partner. It turned out their back catalogue included bestsellers called Shaft, Horn and Hot. Adult erotic books partnering with a children’s charity? Not a good fit!

Charities need to think carefully about new corporate partnerships and put in place a few basic steps to protect themselves from risks to their reputation.

  1. Agree on your no-go areas before you start prospecting

This not only saves time when an opportunity arises, but gets the whole organisation thinking about what constitutes a good fit. If you’re febfast, would you partner with an alcohol company? If your mission is to improve obesity, would you take money from McDonald’s? Think about the industry segments or companies that are not a fit with your values or mission and get agreement early on about your boundaries.

  1. Conduct a thorough due diligence

When you are preparing a list of prospects, or responding to a new opportunity, make sure that you do thorough due diligence research on your new partner. Your research should include their brand, marketing, core activities, alliances, leadership and practices. A basic search of publicly available information should flush out any controversies, lawsuits or thorny issues. You can then make a commercial decision on a future partnership, based on solid information.

  1. Review the information regularly

If you have an ongoing corporate partnership, make sure you conduct a regular review of the information as things can change unexpectedly. You can make it part of the annual review of the relationship and even better, put a break clause in the contractual agreement to cover any important changes.

For example, a local engineering company was a generous donor to a well-known international aid organisation. It had been a loyal partner for years but then it was taken over by a large multinational whose website boasted of selling “non-standard armaments”. Children in poverty and a company selling weapons? Not compatible, so the charity ended the partnership.

Corporate partnerships do offer the potential to deliver something transformational for a charity. Entering into a relationship with eyes wide open is key to preserving the integrity of a charity’s reputation. Spend the time to do your homework and you can secure meaningful partnerships without putting your reputation at risk.

If you’d like to know more about due diligence and building an effective profile for a corporate partnership, then contact us at: info@stellarpartnerships.com  Did you enjoy this article? Don’t miss future ones by subscribing to our newsletter via the box on the right.

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