In times of recession corporate budgets are tight and corporates often seek ways to support their charity partners with pro-bono goods, services and skills rather than cash. Whilst every non-profit loves a steady stream of cash, it can be just as valuable to harness different resources from a corporate partner. Gifts-in-kind can be a great way to keep the relationship active until the budget recovers.
However, gifts-in-kind partnerships need to be managed carefully to avoid some nasty pitfalls and ensure you maximise the value of the resources on offer.
Make sure it’s what you need
A few years ago, I was working on a campaign about a famine in the Horn of Africa. A well-meaning company, let’s call them Egg Heads, were concerned by the crisis and offered a container load of fresh eggs for the hungry communities in Africa. No doubt that eggs are nutritious, but why ship a load of them from Australia to Africa, how would we logistically manage it, and would the local community even need them? It made much more sense to leverage the corporate’s marketing skills and channels to amplify the campaign messages and inspire more donors. The charity didn’t need eggs shipped across the world to solve the problem of hungry families; it needed greater awareness of a slow-onset disaster and new donors to raise cash that could be spent in-country to provide local income and a sustainable food supply.
The same approach applies to services and skills. A bunch of Australian engineers offered their time and skills to help with improving water supplies in Timor-Leste. They were a smart and enthusiastic group and designed a world class water pump for remote communities. The problem was that local villagers had little education beyond primary school so couldn’t maintain the pumps or read instructions in English and there wasn’t regular electricity to run them. The engineers had designed a Ferrari solution for people who needed a bicycle. Thankfully, there was a happy ending to this story, as local managers redirected the project and ended up creating a lovely wooden pump with few moving parts and no electrical circuits to mend. Clarity on the community needs and a better brief for the volunteers would have put this project on track a lot quicker.
Don’t be afraid to say no thanks
Occasionally we encounter a corporate that sees gifts-in-kind as a way to offload their unwanted inventory. A charity responding to the tsunami in Aceh some years ago received an unsolicited ’donation’ of shoes- apparently for those who’d lost everything in the disaster. The truckload of goods turned out to be white stiletto shoes- all left foot only. You won’t be surprised that I didn’t see a single Indonesian fisherman running around in new stilettos after that donation- but the charity had to spend money to get rid of the unwanted goods. Better to politely decline the gift and ask for something useful than deal with the cost and wasted time of unwanted items clogging the warehouse.
Think about the hidden costs of gifts-in-kind
A well-meaning gift can end up costing you more than you expected. A campaign by a children’s charity mobilised corporate volunteers to knit blankets for vulnerable children in India. It was a great way to mobilise corporate support around something tangible, however the charity had forgotten to include the costs of shipping and import taxes. An aligned corporate partner generously paid for the container to be shipped. When the shipment of blankets landed in India, it was slapped with a $20,000 import tax as the charity hadn’t checked regulations or local laws. To this day, I don’t know whether those blankets made it to their intended destination.
Similarly, a cause marketing partnership with Spotlight saw customers bring in their old sewing machines and receive a voucher towards a new one. Terrific impact on footfall and customer satisfaction for Spotlight, whilst the charity received the old machines to help micro-businesses. Unfortunately, the charity had omitted to include the cost of reconditioning the machines, use of limited staff time and shipping them to the right places. By the time the campaign finished, everyone in the charity’s warehouse had become sewing machine repair experts.
But if you avoid the pitfalls and easy mistakes, a partnership built on pro-bono goods, service or skills can be transformational.
Think about offsetting running costs
Ronald McDonald House Charities have been enormously successful in leveraging corporate partners to provide everything they need to keep their houses running in good order. RMHC provides accommodation annually to 60,000 families with sick children who are undergoing treatment. They need a lot of items regularly to ensure the best possible experience for their guests. For RMHC that has led to partnerships with organisations like Sealy, Steggles, Sorbent and Amart Furniture who provide everything from toilet paper to beds for their houses. The gifts-in-kind partnerships can then be leveraged for volunteering opportunities, cash support, workplace giving and other fundraising.
Build capability for your organisation
Boston Consulting Group is full of smart people with deep knowledge in business strategy. They chose to offer their skills to the Cape York Land Council, which enabled the organisation to build a robust framework of governance and strategy that they could not have achieved by themselves. In addition, BCG offered their skilled staff on 18-month secondments to the Land Council to ensure ongoing support for their organisation.
In a similar vein I’ve seen NAB staff conduct data analytics for an education charity and a logistics company provide transport and trucks to help a rural aid organisation. Think about what’s going to make the biggest difference for your organisation; sometimes it’s marketing, channels, data or skills rather than cash income.
Amplify your impact
The right kind of partnership can enable a charity to amplify and advance its mission, not just covering basic running costs. Reckitt Benckiser are the makers of Dettol and their social purpose has always been around better health and hygiene. They recently announced a donation of $1 million of disinfectant and hygiene products to Meals on Wheels for their clients and volunteers. It’s a perfect response to the COVID environment and these gifts-in-kind will enable Meals on Wheels to not just run its operations safely but also amplify its offering to vulnerable clients.
Leverage the relationship opportunity
It’s common to see corporates offering gifts-in-kind or services for events and they can make a big difference to the overall success of the event. Whether corporate support is offered during events and campaigns or for longer term projects and core activities, it’s important that you make the most of the opportunity to develop a broader relationship. You’ll need to ensure that the corporate gets the chance to really engage with what you do- not just as a once off but on an ongoing basis. I’ve heard from many corporates that didn’t get a thank you or acknowledgement for their support. Make sure your charity doesn’t behave like a one-night stand, or you’ll miss the full value of a longer-term relationship.
Gifts-in-kind partnerships will be more prevalent during recessions and the post COVID world will provide an opportunity for your charity to respect the corporate’s current limitations but build value in different ways for the partnerships and relationships that can be sustained when profits rebound. Just remember to avoid the pitfalls of ‘eggs for Africa’.
If you need help with adapting your corporate partnerships, book a free consultation with us at info@stellarpartnerships.com.