In Good Company; how we can take corporate partnerships into new dimensions

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In Good Company; how we can take corporate partnerships into new dimensions

The charity world has a conflicted attitude towards companies. There are many charities with large teams dedicated to building corporate partnerships and raising substantial income. There are campaign organisations that will have nothing to do with companies either in terms of income or influence, or that will only work with the most ‘ethical’ of the corporate world. It must be one of the few sources of income where some people believe that publicly lambasting donors is a productive way to increase income. However, some sector leaders have done it.

My concern is that the relationship between companies and charities is becoming ever blander. Charities hunt the few genuinely lucrative ‘charity of the year’ partnerships. Companies partner with only the safest of charities, usually in the health arena and often cancer. If this was a crop, it would be a monoculture of wheat. For charities and companies to make the most of each other, we need innovation and courage. The new proposal from the Conservatives could be one of those game-changing ideas, but only if treated right.

So what might some of these new ideas look like? To answer that, it’s worth looking at three things: what is the ‘currency’ of the partnership, how does each party benefit, and which group is being exploited to make the partnership have value? These three are the variables in corporate partnerships.

When a company makes a donation to a charity, the currency is money. The charity gets the income and the company gets to feel good, and the company itself is exploited through its bank balance.

In a ‘charity of the year’ partnership, the currency is still money. The charity gets the income and the company gets to feel good, BUT the exploited group is usually the staff and sometimes customers of the company.

In corporate volunteering, the currency is company staff time. The company staff get to give their time to the charity and the charity hopefully (but not always) benefits from the volunteering. The exploited group is still the company staff.

These three models look like this in a diagram:

 

Which currency

Benefits

Who’s exploited

Corporate donation to charity

Money

Charity gets money

Company

Charity of the year

Money

Charity gets money

Company staff and customers

Corporate volunteering

Volunteer time

Staff get motivated

Company staff

 

These three models have limited potential to grow. Companies usually don’t like just donating money. Only so many companies want to run a ‘charity of the year’ partnership. Only so many charities can absorb huge amounts of corporate ‘binge’ volunteering.

So what if we take the three dynamics I set out above and think laterally. We can see some other potential models. Five are represented below:

 

Which currency

Benefits

Who’s asked

Ask the corporate customers

Money

Charity gets money

Customers of the company

Ask the charity supporters

Money

Charity gets money

Supporters of the charity

Pay to volunteer

Volunteer time

Staff get motivated and charity gets paid

Company staff

Educating the future

Money and time

Company gets better workforce

Local schoolchildren

New products for new audiences

Money

Corporate sales and charity income

New and existing audiences for corporate products

 

Let me tease out each of these five models in a bit more detail. It’s worth saying that many are already in use, but just haven’t taken off yet. To quote writer William Gibson, “The future is already here, it just isn’t very evenly distributed.”

Ask the corporate customers. So the first of these models on the source of income is the customers or clients of the company, rather than the company itself. In the mass market, this is what the Pennies Foundation is doing by working with companies such as Domino’s to let customers round up to the nearest pound on their credit card transaction and give it to charity. I have heard about an Israeli initiative which rounds up through the credit card company – so a customer agrees to round up each statement or each transaction.

At the other end of the scale, I met a direct marketing guru the other day who said they were having great success working with companies to ask their wealthy clients to give to charity. There is huge potential in this model still – in the Pennies Scheme alone there are many other retailers who could join.

Ask the charity supporters. This model is the converse of the previous one. Charity supporters are asked to use a corporate product as a mechanism for giving. The affinity credit card reached its zenith in the 80s and 90s and has since fallen in popularity, which is a shame. There are also a number of affinity savings and insurance products which give to a named charity for each new account. The benefit of this model is that charity supporters are asked to do something other than just give money. Sadly, these schemes never seem to quite reach critical mass.

Pay to volunteer. This may sound like a strange model, but it is probably what the Tory party proposal for three days of volunteering will become. Few charities want a volunteer for just three days, so companies may need to end up paying for the privilege of letting their staff volunteer. This is akin to what the Prince’s Trust does with its corporate supporters, where they join a club for a substantial donation and their staff can then become business ventures. The problem is that too few charities dare to ask for a donation, and too many companies are perplexed with why their generous offer of corporate support needs a donation to oil the wheels.

Educating the future. American management gurus like Michael Porter are keen on this kind of corporate model. In their approach, the only kind of corporate/not for profit partnership that makes sense is one that benefits the core corporate objectives. So improving education provision in the area where employees come from makes sense in their model. The nearest we get to this in the UK is where Academies are sponsored by companies and wealthy individuals.

New products for new audiences. I have left the model that excites me the most until last. There are huge opportunities in the financial services marketplace for new products that benefit charities and provide differentiation amid a crowded range of existing ones that are hard to distinguish between. The level of commission in financial services was brought home to me when I discovered a life insurance product I bought, where the total revenue to the company was around £8,000 with a commission for the intermediary of £1,400.

Given the level of pensions, life insurance, mortgages, savings, ISAs and other products that middle class baby boomers buy, the potential is huge. There are also formidable obstacles too – the need to comply with financial services regulation is high amongst them.

However, if I were to predict a single model where charity corporate partnerships could produce incremental revenue for charities, it would be this one: where new products help companies reach new markets, or achieve competitive advantage in existing ones.

In short, if we want to increase the benefit of partnerships, both for charities and companies, we need to think about new ways of working together. If we can reinvent the dynamics of who is exploited, and how charity and corporate partners benefit, we can open up significant new opportunities.

Joe Saxton
 

Leave us a comment below about your thoughts and experiences of corporate partnerships.

 

Submitted by Lizzie Carter (not verified) on 5 May 2015

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Really interesting blog and lots of food for thought here for charities who are working out what 'strategic partnerships' look like for them. More please!

Submitted by Wendy Gupta (not verified) on 5 May 2015

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Joe you've articulated this so well - thank you. As the Business Engagement and Innovation Manager here at Friends of the Earth I am extremely passionate about innovating new products with a particular focus on engaging new audiences. I guess the only, time-old, concern for charities is the time and money needed to fund innovation. How can we get the businesses to understand this?

Submitted by Rodger Holden (not verified) on 5 May 2015

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Hi
We work predominantly on commercial service delivery to circa 30 companies. It works - though its not without obstacles.

I think that we need to recognize that many charities aren't entrepreneurial-minded. There are perfectly legitimate reasons for this (reputation/investment risk/opportunity cost/lack of commercial expertise/time/and the inevitability of failures) while CEOs mostly come from a services/operational background.

I realize that I have presented negatives so here are also some positives. There are entrepreneurs working for charities - identify them and give them scope/parameters. Identify others internally and externally that can assist them. Make sure that the whole organisation understands and supports this activity. Create a framework with aims and objectives, agree budget, timescales etc. Identify supporters who could bring skills/resources/ideas/investment to the table.

Rodger Holden

Submitted by Alan (not verified) on 6 May 2015

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Dear Joe,

Wonderful and thought provoking article. Thank you for sharing that with your readers. Just like Wendy, I am interested in engaging donors and supporters of the organisation I work at. Would you please elaborate on how to get the conversation started with businesses about your last model - New products for New Audiences. Why would the business buy that idea?

Submitted by Charlie Baxter (not verified) on 8 May 2015

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Great article Joe. At the RNLI we are looking really hard at how we can work with corporates to access key audiences for both safety messaging and also how we find new supporters for the future. This helps meet our aims and also helps the company to build their own audiences. A bit of a cross educating the future and asking their customers. I would love to look at how we could apply model five as well...

Submitted by Joe HC Saxton (not verified) on 9 May 2015

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Glad people are enjoying the article. Thanks to Lizzie Carter at CLIC Sargent for inspiring me to get on and write it. I think there are two more models which I would now add. The first is changing the partners. If we stop thinking about partners as corporates but employers then we should think about NHS Trusts, Public Bodies, even other charities as the partners. This could be for payroll giving, fundraising activities, charity of the year and so on.

The second new model is when the currency of the partnership is social change. So neither charity nor company directly benefits but a partnership might reduce carbon emissions, changed attitudes to disability or a host of others things such as the safety messaging that Charlie Baxter mentions.

In terms of why would a company want to get access to a charity database, this would be because a charity supporter might buy a credit card, insurance policy, or whatever if their favourite charity benefited, when they had ignored that offer when marketed direct by the company.

Submitted by Charlie Baxter (not verified) on 11 May 2015

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Interesting idea around employers. We have a longstanding relationship with the civil service through the civil service lifeboat fund, a charity that has been around nearly as long as we have. It gives us access to an audience of around 500,000 employees.

Submitted by Jafes (not verified) on 17 Jan 2016

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I used to run a small business from home, but it was difficult for me to convince my customers about the quality of services I could provide, because I had no corporate office. Then, I consulted professionals who assisted me to start a company legally. Now, I am a successful entrepreneur and earning much better than before.

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