It’s almost impossible to lead a nonprofit! You know what I mean if your December fund raising is less than target. Low margins and not much access to capital markets make a day by day challenge.
The burden of organizational success becomes concentrated in the Executive Director with little money left to hire appropriate expertise in development, accounting, and HR (Alice Korngold).
Coaching doesn’t remove the challenge but coaching helps you to reorganize resources and make a plan. Join me for an ED Holiday Cocktail Hour on Zoom, Thursday, December 19th at 5pm Eastern. Bring shrimp, wine, and questions for an hour together. Cheers!
NonProfits rarely see the need to find a business partner.
At best, they find a favorite auditor, attorney or supply vendor and
essentially develop no-bid contracts with their favorites. Stuart Mendel and
Jeffrey Brudney found that nonprofit and business partnerships were only 10% of
Partnerships mean that both partners get something that they
want from the relationship. Nonprofit CEOs are nervous about relationships that
might make a business – more profitable. Actually, every time that you pay your
auditor, I assume that they get richer! So there is nothing illegal or
unethical about partnership with business.
What are bad partnerships with Business?
Brand Risk – The biggest risk is Brand risk. If you
choose to partner with businesses that don’t match your values, mission, or values
of your clients, you can seriously damage your brand. Partnerships with
business should hire a coach to help you review partner proposals with your
leadership team, board, and stakeholders before you proceed. For example, the
company in New York that has done audits for Mr. Trump also pushes aggressively
in the nonprofit space locally. Would it affect your nonprofit brand if you
chose the same auditor? What questions would you raise before you made the
decision? Your coach can help.
Kentucky Fried Chicken partnered to give money for breast
cancer cure. They printed a month of pink buckets for chicken. Media quickly
seized on the links between calories, obesity and breast cancer. There was
nothing unethical with the business relationship but the nonprofit failed to
consider key implications of their brand. Proceed slowly and use a coach!
Process Risk – A second risk is process risk. The
processes and corporate cultures of all companies are far different. When any
two groups develop a partnership, there needs to be a written charter that the
coach helps you to carefully spell out details
Both Brand Risk and Process Risk can be managed. Leaders
lean into the danger, use a coach, and do risk management! You can partner with
What’s a good reason to partner with Business? Mendel and
Brudner list four reasons and I add two more!
Your nonprofit needs money – Pampers
diapers and UNICEF were partners for a long time and UNICEF got funding for its
mission. Pampers added to its brand strength by being interested in children. Find
a business owner who really likes your mission.
Your nonprofit helps a Business that helps
your clients – A family doctor has a practice locally that easily accepts
cash and his prices are low. Any nonprofit that helps low income families would
be helping their clients by referring them to the doctor if there are not other
Your nonprofit needs more expertise – A
local construction company is willing to partner with your nonprofit with
internships. You have a training program for people released from prison but no
expertise in introducing your best graduates to the job market. The
construction company gets a supply of semi skilled workers that come there with
Both you and the Business want market share –
You realize that a local bakery attracts young parents whose children would be
eligible for your school. You already have 200 parents who don’t go to that
bakery. If both companies give discounts to each other’s customers for a month,
then both groups of parents are now potentially interested in both companies.
Sumo Number Four – Bernie Brenner suggests
that you find a partner who is 10x bigger than you and partner with them. For
example, a real estate developer suddenly gets bad press about rodent
infestation. They need a brand partner who will help them clean their brand. They
donate money to your nonprofit and rebrand as the safe rental for families. This
partnership is the most risky for the nonprofit but potentially the most
More Respect Than Government – Government
partnerships are often take it or leave it contracts. They add conditions
without reflecting on the costs of compliance. They assume that they are the
head in the partnership and your nonprofit is the hands and feet. Business partners
can be different, You can search until you find the right business to partner
but you can’t easily choose another government to partner if you don’t like the
Conclusion: Partnerships are critical in the growth
of nonprofits and often welcomed by business. You will be treated as a co-equal
partner by the right Business. Remember:
This is not a plan for next week – it’s in your
Giving Tuesday may provide gifts for your nonprofit, but
most of us need more than one Giving Tuesday! Financing your nonprofit programs
through charitable giving is a cliff hanger because gifts come and go quickly.
You probably have discovered that.
I just analyzed the 990’s of a large, wonderful nonprofit in
New York City.
BUT I WAS SHOCKED
Their gifts dropped from $120 million to $70 million in one
year. I couldn’t believe it. I have a friend that knows them and she said that
gifts from hedge funds really have been their major source of funding. In bad
years, the hedge fund gifts go away.
For Giving Tuesday, I’m giving two hours of coaching in December to five nonprofit leadership teams. APPLY HERE I’ll review your 990’s, answer questions, and share a couple of tools as appropriate. Good advice never disappears or loses value!
I’m getting more requests than I can honor but its free to
And I truly hope your finances get a major boost on Giving Tuesday
Ronald Dale Tompkins
Certified NonProfit Teams Coach
Many nonprofit leaders focus on the problems of their organizations. And yes, we all have problems!
Scaling Up framework focuses on building capabilities. It will change your mood and the mood of the staff team. It leads to the Deep Work that Cal Newport writes about. It brings happiness to doing good things.
You are days away from an unusual Nonprofit resource. Mingle with Forprofit companies and learn growth secrets. You know how to offer your service with excellence. the ScalinUp Summit in Atlanta May 21-23 will make your work sustainable (and you’ll sleep better!)