December 16, 1999 | Read Time: 6 minutes
Throughout the country, partnerships are forming between businesses and charities as both groups realize that they have a common interest in working together — and much to learn from each other.
Indeed, the growing interconnectedness of the business and social-service worlds, as evidenced by the rapid growth in so-called cause-related marketing, is a positive development that creates limitless opportunities for our country. The key is for businesses and charities alike to strike the right balance.
The vast resources of the business world potentially can serve both the business world’s bottom line and the non-profit world’s need for funds and other resources to achieve its mission. For example, Home Depot’s support for the charity Kaboom resulted in the building of 20 playgrounds in poor communities, helped the fledgling non-profit group become a nationally recognized organization in just a few short years, and eased the retailer’s entry into new markets. Save the Children’s partnership with the Denny’s restaurant chain generated sponsorships for 1,000 children in need and provided many hours of volunteer service and more than $3-million for the charity while also helping the company build morale and a positive public identity.
Beyond the benefits generated for the individual organizations, these partnerships also stimulate a public good: a sense of shared responsibility among organizations for our common destiny — something that is greatly needed in our increasingly pluralistic society.
To form such mutually beneficial partnerships well, however, takes work. It also demands faith, imagination, and will. But it is an opportunity that our nation cannot afford to pass up.
To argue for more partnerships is not to argue against businesses’ doing good for good’s sake. Traditional corporate philanthropy should continue and grow as a percentage of revenue. At the same time, charities should remember that the effectiveness with which they pursue their social missions is their strongest sales tool, and they should insure that it remains their No. 1 concern.
Because of legitimate concerns that the core purposes of business and non-profit organizations could be undermined by too much interaction, policymakers have enacted rules to limit partnerships between businesses and charities, particularly those that involve marketing arrangements or the generation of business income for charities. Governments, civic leaders, and ordinary citizens can play a role by supporting policies at the national, state, and local levels that encourage partnerships between businesses and charities.
For example, state laws that require non-profit organizations to register if they plan to solicit funds in the state have been interpreted by state attorneys general to cover marketing deals made with corporations. As a result, a non-profit partner may put itself at risk when a business offers to make a donation to the organization for each item sold, unless the organization goes through the expensive and cumbersome process of registering in any state in which the advertisements might appear.
While some limits are needed, policymakers should rethink overly restrictive rules that make partnerships more difficult but do little to protect the public interest. At the same time, government and civic leaders should think about ways they can also stimulate connectedness among businesses and charities. When calling together organizations concerned with a specific social or economic issue, community leaders should include both business and non-profit leaders. They should help organizations find common ground and explore ways they can contribute to the common good. By rewarding and recognizing business-charity partnerships, the governments will validate the practice and inspire others to explore its many possibilities.
Ordinary citizens also hold great power in influencing whether such partnerships fade as a fad or continue their steady growth. In their role as consumers, citizens may choose products that are tied to specific causes or that were manufactured by socially beneficial enterprises, such as organizations that employ the disabled or people coming off the welfare lists.
Citizens also may look at the record of a business’s support for the social causes they care about in making purchases or deciding whether to invest in a publicly traded company. If they approve of a partnership or transaction, they may communicate their support to both the business and the charity partner, either by sending a letter or e-mail to the company or charity president or by engaging a store employee in a discussion about the cause. And, in their role as voters, they can support policies that encourage partnerships, and oppose those that inhibit them. Those efforts will help create a context that not only supports new involvement in charity-business partnerships but makes existing partnerships more valuable.
Serious challenges still remain. To best take advantage of the many benefits of such partnerships, businesses and charities will need to re-examine not what they do, but how they do it. Business will have to learn to be about something larger than just making a profit — in other words, to come up with a vision or mission. Businesses also must be willing to commit to nurture and sustain a cause, or else their lack of sincerity will become evident and the public will recognize the partnership as merely an attempt to manipulate a good cause. Finally, they must be able to build understanding of their works by sharing information with their employees and with the public.
Charities, for their part, will have to work hard to involve their corporate partners in meaningful activities in order to inspire employees and to stretch their capacity to help out and derive satisfaction from their experience. Charity staff members also must learn how to specialize without compartmentalizing. A high degree of cooperation among different functions of the charity — for example, fund raising, community outreach, and volunteer recruitment — is needed for the charity to be most effective and to satisfy its business partner’s demands. Finally, charities must learn to adapt to a changing world with flexibility and responsiveness to the unique circumstances and styles of their partners.
Our society historically has erected barriers that have kept the business and charitable worlds from communicating informally and interacting professionally. Let us eliminate those barriers and imagine the potential of partnerships to advance the interests of the institutions that make up our communities and our country. In the end, their common interest is for the common good.
Shirley Sagawa is the former executive director of both the Corporation for National Service and the Learning First Alliance. Eli Segal is the president of the Welfare to Work Partnership, former chief executive of the Corporation for National Service, and a business entrepreneur. This piece is adapted from their book Common Interest, Common Good: Creating Value through Business and Social Sector Partnerships, which is being published this month by Harvard Business School Press.
