Partnerships are more than just the money, right? Just like airlines are all about the schedules, seat size and in-flight entertainment, until one crashes into a hillside. Then it’s all about safety and maintenance. Alan Joyce is attempting a tricky balancing act between returning Qantas to profitability and getting a fully loaded 767 into the air without an engine dropping off.
It’s the same challenge for non-profit in a tough economic climate. You want to have deeply aligned, high social impact partnerships, but you’re worried about keeping the doors open. The Save the ASRC emergency appeal shows how precarious the situation can be for smaller non-profits depending on community giving. It doesn’t have to be a trade-off. Corporate giving has grown consistently, despite economic headwinds. There are plenty of million-dollar partnerships announced in recent months. Here at Stellar we’ve been encouraging you to think about the holistic impact of partnerships. We also know that many of you are underselling yourself and could get more money from your existing partnerships.
Here are some things to consider if you want to get more cash and less lip service for your efforts.
Put a price on workplace volunteering
Staff engagement, attraction and retention is one of the biggest pain points for every business. The shortage of talent and the Great Resignation during COVID is making every CEO work harder to motivate their staff. You’ve probably been peppered with requests for workplace volunteering opportunities. So why do so many non-profits still offer it for free? The motivation, team building and inspiration that comes with working with your non-profit is solving an expensive problem for corporates. The latest Benevity research shows that “a 100 person company that pays an average of $50,000 pa could have turnover and replacement costs of between $660,000 and $2.6mln per year, depending on their turnover rate”. Imagine how much bigger the cost for the larger, listed companies.
Workplace volunteering costs your non-profit time, salaries and effort to administer. At the very minimum you should be covering those costs and explaining politely to corporates why you are charging a fee. The lovely team at St Kilda Mums depends on teams of corporate volunteers to keep their service running but has a fee scale to match. Habitat for Humanity has a high demand for corporate volunteers and charges $5,000 per team, unless you’re a bigger corporate partner and then it’s included in the partnership. Yes, you’re connecting with new potential corporate leads, but they need to pay their way first and demonstrate that they’re serious about making a contribution. The ones who baulk at paying are probably the ones who’ll never upgrade into a partnership anyway.
Consider the full costs of in-kind donations
Everyone loves freebies-until they’re not actually free. Have you noticed that the latest clickbait offer always comes with strings and pre-conditions? We’ve heard of many non-profits being offered goods or services in kind- especially when businesses are tightening their belts and don’t want to expend cash. Often, they’re valuable to the ongoing running of programs or activities and they’re gratefully received. Equally often, there’s a hidden cost that charities have to bear. Our friends at AMRRIC received donated pallets of animal health products for their work in rural and remote Aboriginal communities. Very useful, except there was no money for warehousing, storage, packaging and transport to get the products to the communities who needed them. Goods in kind without cash can simply be an excuse for corporates to offload end of season or unwanted items from their core range. If so, you need to charge them for the costs of being their solution to sustainability or warehousing. Scared of getting push back? Just remember that all those hidden costs are borne by the regular mums and dads who donate every month, trusting that you’re doing the right thing with their cash. If you’re wavering in asking corporates to cover the full costs of their donation, just imagine explaining it to the 80 year-old widowed donor that she’s cross subsidising some big pharmaceutical company who won’t pay up.
Understand your own value
Value is highly subjective; it’s different things to different people. What’s Vegemite to one person is Kryptonite to someone else. The value of your partnership depends on how your corporate prospect perceives value. The ones struggling with staff engagement will find your volunteering options highly valuable, whilst the corporates busy digging stuff out of the ground will pay more for solutions to their environment and sustainability challenges. The key is to understand the true value of the solutions that you offer to the corporate’s problems and pain points. Then you’ll have a stronger commercial proposition and won’t be entering into partnership discussions hoping for some token philanthropy.
We’ve seen some examples recently of non-profits getting a few cents in the dollar for their expertise, brand and reputation. Others have entered into partnerships hopeful of just getting some ‘brand exposure’. This is bordering on exploitation, as neither option will pay the bills and keep the lights on. If you’re aiming for a slice of the billions in corporate giving you need to be strong and ask for more. Corporates may say that they don’t have budget; of course they do- they just choose to spend it elsewhere. You need to demonstrate the commercial value of your offering and show that they’ll be worse off without your partnership. If you want more cash from corporates, you’ll have to ask for it.