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Stellar Partnerships

4 risks that derail corporate partnerships

Sometimes the lure of big money can make us overlook the risks behind a decision. Like a gambler convinced that the next game is going to be the big winner, we can fail to see the real costs and consequences. In the UK a restaurant chain offered to sponsor a local soccer team for under 10-year old boys. The sponsorship provided much needed funds for equipment, kit and training.   Unfortunately the restaurant was Hooters, a chain infamous for barely clad waitresses and an owl logo that was American slang for breasts. Pictures were shared of the bemused young footballers with the sexy waitresses posing in tracksuits. Amid a Twitter storm of jokes about the sudden interest from touchline dads, the Football Association banned the sponsorship as inappropriate.

Corporate partnerships can deliver incredible results, but they do come with risks. Its best to be prepared for the four main risks that can derail a partnership.

Misalignment of values

The example of Hooters showed that every non-profit needs to consider its core values and whether the partnership is a good fit. For that reason many health charities choose to avoid partnerships with corporates involved in junk food, alcohol or tobacco. Similarly environmental organisations won’t consider partnerships with fossil fuel companies. The values alignment is personal to each non-profit and what’s Kryptonite for one is a hot target for another. For example, armaments companies are often on the no-go list for many non-profits, but they are a key target for Legacy Australia. Companies like BAE and Lockheed Martin are viewed as valuable allies in keeping defence forces safe. Clarifying and communicating your no-go areas can help avoid a misalignment of values and potential reputational risk.

Backlash from donors and audiences

You might think a partnership is a good idea, but what do your key stakeholders think? When McGrath Foundation partnered with Jim Barry wines it raised a few eyebrows, as alcohol is a known carcinogen. When Hancock Prospecting offered to sponsor Netball Australia it provided much needed funds to the sport but caused great concern among players and supporters. Sport is in the midst of a greenwashing onslaught from mining companies and players, supporters and the broader public are quick to jump on corporates who look like they’re buying goodwill and PR. Thinking beyond your non-profit’s immediate needs and testing with your key donors and supporters can avoid the backlash that can damage your brand with the public.

Material changes

Our economic environment is dynamic, and things change quickly in corporate land. Some sectors like construction have been under intense pressure, with some big players going into administration. Others have merged or been taken over by bigger organisations. The corporate partner you started with may not be the one you now have. When a children’s charity partnered with a local engineering firm, it seemed a good values fit. But the local firm was then acquired by a giant global company that listed, among other things, no-standard armaments as a key product. Cluster bombs and children? Not a great fit. You need to plan for unexpected change, and some break clauses in the partnership contract are vital. You need a quick get-out if you find yourself in bed with a frog instead of the prince.

Scope creep

We all go into partnerships with the best intent to meet the needs of our partner and do great stuff. As both organisations get to know each other, it opens up new possibilities and more ambitious goals. Unfortunately, there is a tendency for non-profits to say yes to everything to keep the corporate partner happy. If you’re a small non-profit it can become overwhelming if your corporate partner now wants you to create a campaign concept, provide weekly social media posts and offer unlimited volunteering. What started as a partnership starts to look like slave labour. I once agreed to co-host a corporate event and ended up spending hours tying swing tags to 500  gerberas for their guests. You can mitigate the risk by clearly laying out expectations and key deliverables in the partnership contract. Regular reviews will ensure that you stay on track and any variations need to be attract an appropriate price.

Nothing in life is risk free and sometimes the greatest risks can yield the best opportunities. Otherwise Columbus might never have found America and NASA wouldn’t have landed a space craft on the moon. Being aware of the risks and preparing for them is the best way to unlock those opportunities.