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Want strong ties to your corporate supporters? Repay your grants!

The last time a corporation awarded your organization a grant, how did you pay them back? It’s not a trick question. Contrary to popular belief, nonprofits do have to repay their donors – especially corporate sources.

When a company gets funds from an investor or lender, the company is required to repay the funds. Think of the TV show Shark Tank, and imagine Kevin O’Leary asking how he is going to get his money back and make a profit. All financiers expect to receive more than they invest as compensation for supplying funds and taking a risk on the company: Investors receive ownership shares which they can sell, while lenders are repaid over time with interest.

Nonprofits do not repay investors in cash, but by providing donors the things you are best suited to provide: impact, image, and engagement. This is especially true when it comes to corporate donors.

Impact (and the business environment)

Solving most community issues requires complex systems of services, delivery and outreach. Few companies or individuals have the infrastructure or expertise to generate the level of positive impact nonprofits do. You are the boots on the ground: You understand your clients’ needs, how to reach them, and how to serve them most effectively – often with minimal resources.

For example: While companies may want to improve education, most lack the desire or knowledge to run schools. Instead, they partner with nonprofits to achieve mutual goals. Delta Airlines’s sustainability focus area is advancing education; rather than starting schools, Delta partners with APS and sponsors Junior Achievement of Georgia and local YMCAs. Employees volunteer as Reading Buddies and Mentors.

Economic health leads to additional and larger customers, and a better educated community offers a more skilled workforce.

By supporting local nonprofits, companies strengthen the communities in which they operate. Economic health leads to additional and larger customers, and a better educated community offers a more skilled workforce.

Image (and customer appeal)

Constructive social responsibility initiatives improve a company’s public image and its relationships with all its stakeholders – customers, investors, employees. Contributions of time and talent to nonprofits can reinforce their brands and provide opportunities for positive media coverage.

The caveat here is brand alignment: Companies seek nonprofits that reinforce the firm’s desired image. For example, Novelis – the leading producer of flat-rolled aluminum products and the world’s largest recycler of aluminum – donates aluminum for 3,100 teams in the FIRST Robotics program, directly funds 40 robotics teams globally, and sponsors a recycling program for FIRST teams. These activities reinforce its image as a world-class, technology-driven aluminum producer and recycler.

Your cause may spur corporate sales, an important form of donor payback… [that] can have a sizeable impact on a company’s bottom line.

Consider this: Your cause may spur corporate sales, an important form of donor payback. When done well, nonprofit partnerships can have a sizable impact on a company’s bottom line. As reported by Nonprofit Hub:

  • 91 percent of consumers will switch brands to one associated with a good cause, given comparable price and quality
  • 61 percent of consumers will try a new brand because of its association with a particular cause
  • 50 percent of consumers pay more for goods and services sold by companies that give back to society

Engagement (and workforce satisfaction)

Community engagement, always considered important in business, has become a much more urgent matter in a market that’s as competitive as ever – especially in the market for talent. Volunteer opportunities provide a sense of connection to the community and opportunities to meet potential customers. These activities also have been valued for helping develop leadership skills and strong working relationships with peers in other companies.

Millennials, now the largest generation in the workforce, have made community engagement a key tool for employee recruitment and retention. Younger professionals place greater value on philanthropy and engagement than their older colleagues:

Deep partnerships with nonprofits can offer the volunteer and philanthropic activities employees crave. Now, many companies offer time off for volunteer engagement and match employee donations, especially in designated company-sponsored projects. You can solve the workforce problem faced by commercial entities by offering well-organized and targeted donor engagement activities.

Deep partnerships with nonprofits can offer the volunteer and philanthropic activities employees crave.

As nonprofit executives, we tend to discount profit motives, and that can lead to enormous missed opportunities. That profit motive is what drives many companies to invest in nonprofits. By repaying your donors’ investments, you can build strong and lasting donor relationships, which in turn can lead to greater funding and volunteer participation.

For more lessons on corporate donors and other sources of major funding, sign up for the four-part Certificate of Fundraising | Grant Management series, starting soon at GCN’s Nonprofit University; I’ll be leading the first two courses, Constructing a Powerful Case for Support and Writing Winning Grants for Foundation and Corporate Giving.   

Mary-Kay Boler is a Certified Fundraising Executive and senior director of development for the Technology Association of Georgia Education Collaborative. She has over 25 years of experience in economic, community and business development and is an instructor for GCN’s Nonprofit University.

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