Negotiating the value of corporate partnerships is like the bathroom scene in the film Pretty Woman. Edward is negotiating for a week of Vivien’s time and they settle on $3,000 – but she would have been happy with $2,000 and he was more than willing to pay $4,000. It’s easy for a charity to underestimate the value it brings to a corporate partnership and settle for less than it’s really worth.
We advise a charity to approach corporate partnerships fully armed with a detailed understanding of its own strengths, offerings and the suite of benefits it can bring to a corporate partner. Figuring out how much to ask for isn’t an exact science and it’s not like creating an advertising rate card. Finding the right price requires a charity to weigh up the commercial and other benefits that matter to the corporate and resist the temptation to be grateful for whatever crumbs are left on the table.
If you’re struggling to assess whether your non-profit is getting enough value out of a corporate partnership, consider some of these factors:
Number of markets and reach
Where will the corporate partnership have a presence? Is it a local partnership in one location, state or community or national? Is it a narrowly defined target audience or a mass market? The goodwill for a corporate partner associated with your charity is likely to be more valuable to the corporate with a larger number of markets and wider reach. The partnership between KFC and ReachOut, one of KFC’s 5 chosen charities, features fundraising in every store nationwide and supports ReachOut to connect with 1.2million young people that are the exact target demographic for KFC’s staff and customer base. The value of the reach and audience to the corporate partner should be matched by the right level of contribution to the charity.
Visibility of the partnership
Consider the customer, staff and stakeholder audiences. We encountered a children’s charity partnering with a national retailer. The retailer had co-branded marketing materials in every store nationwide, encouraging increased footfall and consumer visits to their stores. But the charity received zero dollars. Yes, zero, with no customer or staff fundraising either. The charity was grateful to gain increased awareness but had made no assessment of the value of its brand alignment, the high visibility of the partnership and the undoubted increased sales that the corporate partner had achieved. Such a partnership should have required a minimum guaranteed contribution in cash and other value from the corporate partner.
Level of participation
Corporate partners can derive great commercial value from a high level of participation in a charity partnership by their customers, staff, suppliers and stakeholders. It drives up staff satisfaction and loyalty and increases the Net Promoter Score (NPS) with customers. Large corporates especially are very aware of how each percentage point in NPS drives increased profit. Charities should take some time to consider the true nature of the commercial benefit to the corporate and adjust the price of the partnership accordingly. Wynstan’s partnership with Ovarian Cancer Australia encourages participation among its staff, suppliers, customer and the founding family, selling Teal Ribbons in every showroom and co-branding all of Wynstan’s vehicles. That’s why it’s worth a minimum of $100,000 p.a. with additional fundraising of $30,000+ per annum.
I once conducted corporate partnership negotiations between an international aid charity and Reckitt Benckiser, the makers of Dettol. The Dettol team wanted to run a short, winter campaign on the theme of health and hygiene and claimed to only have $50,000 in their marketing budget. For most charities, it’s not an amount to be sniffed at, but let’s consider the shelf life of a Dettol product. The stuff is practically indestructible and could sit on shelves for years without having a use-by date. The value of a co-branded label being visible to the public far beyond the time period of the campaign, creating a prompt for consumers to prefer it over another product, was worth a lot more than the $50k on the table.
Contribution to core mission
Ideally a corporate partner should be aligned to a charity’s core mission and aspirations. For example St Kilda Mums partners with Decjuba clothing, as both are committed to sustainability and recycling of clothing and goods for the benefit of local communities. Too many times is a charity seduced by the prospect of fresh cash and then create a program for that partner that is not aligned to its core mission. The cost to the charity of a bespoke program or service needs to be weighed against the value of the corporate partnership to make sure there is a meaningful ROI for the extra time, resources and effort in creating something new for this opportunity.
When your non-profit wonders if you’re asking too much or too little from a new corporate partnership, take some time to think about the total benefits that a partner is deriving from your relationship. In Pretty Woman, the characters eventually find their happy ever after. However, Vivien could have got more dollars for her week of attention by thinking about what he needed, valued and got out of his investment.