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Have you ever had a week that changed who you are as a person…and changed your business forever? The week of May 19, 1997 was that kind of week for me. Our year-old promotional products business was growing, but nothing too dramatic. That week in May, we received inquiries from seven local non-profit organizations and several business people who mentioned their affiliation with non-profits. Seven new, full price clients in one week from any sector was noticeable and we questioned callers on how they had heard about us. “I’ve heard you’ve done great things for other non-profits and we’d like to work with you” was a common response. It wasn’t until a few weeks later that we learned the rest of the story.
The Committee on Temporary Shelter (COTS) is a local area non-profit organization that helps the homeless connect with temporary and permanent housing. The COTS Walk, held the first weekend in May each year, is the main fundraising event of the year for COTS. We had the opportunity to provide shirts and buttons to COTS for their 1997 walk, and we gladly gave them a non-profit discount. When COTS turned in their shirt artwork for the sponsors of their walk…they left a space, with a note “Purple Elephant logo here”. We thought it was a nice gesture…and didn’t think much more about it.
COTS understood more about partnering than we did…and they took it a step further. The regional United Way organization in our area holds quarterly “coordinating council” meetings with representatives of its 41 member organizations. During the May, 1997 coordinating council meeting, the COTS representative stood up and announced how wonderful we were to work with, and suggested others call us. COTS staffers also made an announcement about us to their board of directors (comprised of local business owners)…and they called too. We have enjoyed a four-year, mutually rewarding partnership with COTS.
Lest you think me more than a little naïve…I am NOT suggesting that all you need to do is give a non-profit organization a small discount and they’ll build your business for you. I am also not suggesting that you should always look to attach strings to your charitable giving. I am suggesting that non-profit, charitable organizations can be a great source of sales revenue, goodwill, and new business leads for you.
Change brings Opportunity
The traditional relationship between business and charitable organizations has been the story of the “haves” and the “have-nots”. Business owners are perceived as having access to resources and charitable organizations are perceived as not having (and needing) resources. These perceptions are not accurate for most small businesses and charities, and often stand in the way of effective partnering. When business is seen as “giver” and charities are seen as “takers” these perceptions naturally limit the synergy that can occur between the two groups. Win/win partnering between business and non-profits requires us to challenge traditional roles and develop new ways of thinking that include perceiving the parties as equal partners who both have resources, and both have needs.
A few years ago many federal grant programs were phased out and funding for non-profit organizations in general took some pretty significant turns. Non-profits responded to the changes in different ways…but nearly all turned to business to make up much of the slack in funding. The more realistic non-profits realized that for them to expect more from businesses in their community it has to be a win/win relationship. If non-profits expect businesses to go beyond their previous levels of giving…they must bring more to the table than they did in the past.
The old model of “we are a non-profit, you are a business…you should help us” just doesn’t hold enough value for business people to garner the level of funding response needed by non-profits today. All parties must think in terms of “stakeholder analysis” to determine their needs and resources they bring which can be used for need fulfillment. See the accompanying sidebar article for a simplified version of stakeholder analysis.
Stakeholder Analysis of Partnering Opportunities
Partnering with non-profits offers you a creative outlet to create win/win situations for you and the non-profit. To fully partner with any other organization is to return (at least intellectually) to a barter or exchange theory economy. Each of the parties or “stakeholders” in the relationship has needs and they have resources that they bring to the table. A thoughtful analysis of these resources and needs will help you maximize outcomes for yourself and the non-profit. It helps to “think in pieces” rather than wholes.
What non-profits and businesses bring to the partnering table:
What Non-Profits need that you can offer them:
- Expertise in your product area.
- Cost effective ways to promote their cause and thank donors.
- Shortest possible cash flow turnaround for turning their ideas into cash.
- Quality workmanship and products to convey their message.
- Flexibility in timing and terms and conditions of orders.
- Belief in their cause and a sense of “team”.
What you need as a business that Non-profits can offer you:
- More business through advertising and word of mouth referrals. Professionals in non-profits network better than any other identifiable group. Good news travels much faster among non-profit professionals than among business professionals. This comes from inherent differences of the “helping model” of organizations vs. the “competitive model” of business. Word of mouth advertising is the least expensive and strongest endorsement you can receive.
- Goodwill within your community. This is difficult to measure…and it is critical to your long-term success. This is “the feel good factor” or sense of community others have about your business.
- Good paying customers…they tend to pay their bills closer to on-time than other clients. The organization’s reputation in the community is key to their success in attracting clientele and supporters.
- Can be a 3rdParty endorsement for your company. If a non-profit has a strong reputation in your market…you can benefit by association with that organization. Even though you may have partially donated your product or service…the public perception is that “if the charity will work with them…I should too.”
- Many opportunities for marketing exposure that don’t cost the organization or you very much. This may be a mention in their newsletter, allowing you to display a banner at an event, or ongoing advertising on the products they use as an organization.
- A creative outlet to make a difference and be perceived as proactive.
Identifying the right non-profit partners is key to successful partnering. You need partners who “walk the walk” as well as “talk the talk” of building long-term, mutually rewarding relationships. Unless you’re as lucky as we were with COTS…this can take trial and error over a year or more…but it’s worth the effort. You may not be able to tell the first time a non-profit asks you for special consideration if they truly believe in win/win partnering or if they are “from the old school”…but actions speak louder than words, and the organizations’ true colors will show through by the 2nd or 3rd request.
As a businessperson, it doesn’t have to be money that you bring to a partnering relationship. Think about all the other aspects you can bring to a win/win relationship…time, human capital, volunteerism, flexibility in payment terms, spec samples, creativity. It may even be as simple as having a large parking lot or field that facilitates a particular project. Think back to the days our economy worked on a barter system. Find partners who have something to give that you want…whether it’s a cause you can believe in from personal experience…or that they can bring a particular high referral rates, whatever it is. Then think about what you have at your disposal that the organization needs…that you would be willing to give up…to get what you want.
Practical Applications
This article is intended to share some commonly overlooked opportunities within the non-profit sector. For the purposes of this discussion, I am referring primarily to 501C-3 (a federal classification for non-profit organizations) qualifying organizations and not partnering opportunities with other businesses or networking associations…both of which hold additional opportunities. Targeting non-profits as clients and marketing partners can be a viable strategy, overlooked by many.
Here are some examples of partnering opportunities at three different levels of commitment on your part: Inexpensive Opportunities in everyday life, Creative Ways to make a difference, In-depth partnering.
Inexpensive Opportunities in everyday life
In-Kind Donations vs. Discounts
Partnering through discounts–most non-profit organizations are in continuous need of additional funding. Federal budget cuts, the proliferation of non-profit causes and limited public generosity all create opportunities for you to stand apart in the crowd.
One simple way you can attract more non-profit partnering opportunities is to make it known that you like working with non-profits. Sometimes the most obvious way to show this is with a discount. I am not a proponent of price-cutting and competition based on price as a general rule. When it comes to non-profits, it is a direct way to address their needs.
Instead of giving a “discount” that in effect tells the non-profit (and the rest of the world) that your prices are higher than they could be…consider giving an in-kind donation or a “percentage off”. Present your invoice with the full price shown, and indicate the amount of your “donation”. You’ll be surprised at how different the perception is…and it opens the door for further partnering.
A discount is a one-way street…you give, they take. With an in-kind donation or sponsorship…the organization knows they are expected to “give up something” in order to get the donation. This then is a two way street that recognizes that what you have given has value to the non-profit. What they give up may be marketing exposure for your company…or it may be a letter confirming your donation as a tax-deductible donation. Donations of as little as 5-10% off your regular price may get you the work…and logo exposure on the wearable or at their event.
Auction Items
Many non-profits conduct silent and/or live auctions to raise awareness of their cause as well as needed funds. If you have a retail line of clothing available…you can donate one to a few items fairly inexpensively. If you have an attractive logo…you may be surprised what auction participants will contribute to get something with your logo on it. Item donations can be an inexpensive way to gain exposure at Chamber of Commerce functions as well. In many cases…for a $25 or less retail value…you can get your business listed on the flyer for the after hours event and have exposure to the assembled audience as prize drawings are held at the function.
We have been successful in donating certificates good for $$ off when the recipient places an order…that gets them in your door and allows the charitable donor to become your customer. Be careful that you offer something that is desired by the public…and that it is perceived as having real value. Contributing “non-donations” can make you look cheap and inappropriate…so be careful. I remember seeing an offer for “free one-hour consultation” with a $65 value listed…from an insurance agent. Now, I don’t know about your area…but if I so much as yawn around an insurance agent…they’ll give me more than an hour of their time. You’ll always want to put an expiration date on any certificates you issue…and I suggest one year from issue. You’ll drive your accountant nuts (and can hurt yourself financially) if you don’t track your certificates and be sure you account for them all.
Misprints and Overruns
We’ve all “been there and done THAT”…we print the green screen in black or the needle breaks and ruins a beautiful embroidered cap. Once again…these are opportunities for you. Why fill the dump with your rejects when you can take a tax write off…AND help many in need. Most missions for the poor or homeless shelters actively need clothing items to help their clientele get back on their feet. If a garment is perfectly good as a useful and warm piece of clothing…consider donating it. If the item is too far gone to be a useful item…consider donating it as rags, which many retraining programs can use for various projects from stuffing refurbished items to weaving materials for rugs and mops.
You’ll want to consider partnering with a non-profit in another city to utilize misprints and rejects. You want to be careful not to have less than perfect merchandise with client logos on it in their home market…not a good sign for them…or for you. If it’s a minor problem with the item…consider asking the client if they mind if you donate their rejects to XYZ charity. We had a case of rejected coffee mugs and the fact that we donated them to COTS (after asking the client) increased our goodwill from the charity and the client.
Smoothing the Way
There are a number of opportunities that are truly free (or very low cost) marketing and advertising opportunities for you…but that greatly help a non-profit. Many non-profit events offer opportunities for exposure that are free…but your participation is critical for the organization’s success. Consider a charity golf outing. One of the things most outings include is a “ditty bag” for golfers that includes small, imprinted products from local businesses. There is generally no charge to be included in the ditty bag…and your marketing message gets placed directly in front of qualified decision makers for your products.
Be aware too of opportunities to be of service by loaning existing equipment (like an air inflation pump for balloons) or other items needed for special events. We have been asked to supply our own advertising balloons, tattoos, and even our mascot to help draw attention to kid’s carnivals and other events. One request was as simple as donating 25 helium filled balloons (with our logo on the balloons) which were used to mark the path to a job fair. The sponsoring non-profit didn’t have to pay for the balloons…and we got a full day of logo exposure on a downtown street.
There are many other opportunities available in everyday life. If you have the cash flow…considering offering terms of net 45 or net 60 to get the client past their fundraising event. If you have a storefront…many communities have winter clothing collection drives for coats, gloves, or boots. If you are a drop location for winter coats for the needy…and you have a display of decorated jackets hanging nearby…you may very well hear from donors and their businesses again.
Creative Ways to make a difference
The next level of partnering involves a bit more effort, and generally involves offering flexibility or knowledge to your non-profit clients.
Spec Samples
Non-profit organizations often face a “Catch 22” when considering fund raising projects. They have identified the need to raise funds, and they often have a strong support network that will support their efforts if have an item to sell. The problem is, they can’t afford to be wrong. They often can’t afford to carry the inventory for their fund raising project either. You can avoid potential problems in receivables and be a hero to your non-profit client…by agreeing to produce a speculative sample of the items they are considering.
A promotional products company received a call from a local church that needed to raise money for operations. The church wanted to produce a collector coffee mug with a special pencil sketch of the church. The church wanted to order 72 mugs as a trial run. The salesperson suggested a spec sample and billed the church for the screens and the 2 items they actually produced. The church showed the spec samples three consecutive weeks after services to its members. The church sold 576 mugs…for a profit of over $2000.
Talk about win/win partnering…the salesperson received an initial order of 576 mugs at 40% profit margin instead of the 72 piece order that had questionable possibility for success. There were two re-orders of 144 mugs each. The salesperson was also allowed to propose similar fund raising ideas each year for the next 3 consecutive years. In addition, because he had gone above and beyond the church’s expectations…3 members of the church’s congregation that own businesses became clients…and two other churches called to inquire.
Finders Fees
Finder’s fees are a way for you to give non-profit organizations a reward for orders resulting from their marketing efforts on your behalf. The most common percentage I have seen is 10% of the base price of the new clients order. The concept is pretty simple…if an organization finds you new customers…you reward them. You get the new customer, and you give the non-profit 10% on account toward their future purchases. This means your out of pocket donation is reduced by the difference in your gross vs. net costs. You can carry this a step further by having the non profit organization write the client a thank you note for the funds that they made available to them.
This can mean some nice public mentions of your business. If the non-profit is sponsoring a golf outing and giving local businesses the opportunity to put a promotional product in the “ditty bag”…you can help. In the printed materials for the golf outing it can say: Joe’s T-shirt shop…is assisting us in our fund raising efforts…if you call them and place an order for your ditty bag items…they will give us 10%. For your part…read “goodwill for sale CHEAP!”
This approach can also be taken on an ongoing basis. Consider this offer that ran in a quarterly non-profit newsletter (circulation 5,000). Sally’s stitches is helping the Charitable Family Center through in-kind donations…if you call Sally she will give us 10%.
Once you have partnered with a non-profit…they will help you achieve your goals as you help them achieve theirs. A promotional products company who partnered with a local chapter of a national non-profit recently experienced this first hand. This non-profit holds regional conferences that rotate from state to state within the region. Their particular region consisted of thirteen states…so this meeting was only held in their state every thirteen years. The non-profit offered the business one of two “business partners” tables included in the event. The cost to the business for this very valuable, behind the scenes opportunity…NO CHARGE!
If you are a screen printer or embroidery shop…consider making more resources available to non-profits to maximize your potential return. By this I mean offer non-profits and others the full range of products available in the promotional products industry. I’m not suggesting you dive head first into this huge and intimidating industry…but you can partner with recognized experts in the field. This can be an extra source of revenue for you…while maintaining the quality and expertise you are known for.
Co-Op Marketing programs
One of the best-kept secrets in corporate America is co-op advertising dollars. Millions of co-op dollars go unused and are lost on an annual basis. You are probably aware that companies like FirestoneÒ, PrestoneÒ Antifreeze, KodakÒ, and many others offer retailers of their products co-op advertising dollars. You’ve seen the newspaper and television ads for the hardware store down the street that gets part (usually 50%) of their advertising paid for because they feature a particular brand or product. What you may not know (and most non-profits don’t know) is that in many cases, co-op advertising dollars can be used for wearables and other promotional products.
This is a real service you can offer organizations in your market. Stop to consider this…If organization XYZ needs t-shirts for an upcoming fundraising race they are sponsoring…they would be wise to get the shirts donated. John’s hardware store may really want to support the charity…but not be able to afford the full cost of the shirts. If John’s Hardware sells PrestoneÒ Antifreeze…and John’s has co-op money available…the organization may be able to buy the shirts (from you of course) with John’s paying half and PrestoneÒ Antifreeze paying the other half.
As usual, information is power…and knowing which direction to send the organization…and what products offer co-op money that may be available in your community it key. The Promotional Products Association (PPAI) publishes an annual guide to co-op programs, complete with contact information and confirmation of what products can be submitted for reimbursement and how much they will allow to be used for such projects. If you want to be a real hero…you can offer to find a shirt sponsor for the organization.
A key person for you to know is the regional representative for the particular product. Once again, think in terms of stakeholder analysis. A regional representative for PrestoneÒ Antifreeze stands to gain personally if sales for PrestoneÒ Antifreeze go up is their territory. One of the marketing weapons available to the regional rep is the co-op money their individual accounts hold. You may even be able to parlay this relationship into multiple orders with different organizations in different communities by coordinating with the regional sales representative.
An ethical word of warning…since most national companies reimburse only 50% (or less)…it is often tempting to local business people to try to cheat the system. If you are asked for an invoice showing double the actual cost of the item, you are being asked to help defraud the provider of co-op advertising dollars. Aside from being an ethical problem…this can create legal liabilities for you and inaccuracies in your business records.
The Full Monte
The preceding suggestions have mostly focused on facilitating orders for a single item or specific opportunity. When you find a charity or organization that you feel strongly about…and one that can help your business grow, you may want to consider establishing much more of a relationship. The following opportunities require a stronger organizational commitment on your part..but the potential rewards are greater still.
Human Capital investment
Most of us have at least some seasonality to our business cycles. We can predict from year to year that we’ll run like crazy at the end of the year, and then run slower for a couple months at the first of the year. These slower times are great times to plan your activities and give more time and focus to the group(s) you choose to partner with. This also gives us real opportunities to demonstrate our commitment to our partners. Allowing your staff to be involved in the process of selecting the non-profit can build employee commitment. Spending actual work hours at the nonprofit can give you a better understanding of what the organization does…and you can provide much needed assistance in your area of expertise. Perhaps your experience is in human resources…you could help them review their employee policies and procedures…if it’s accounting, perhaps that. It may be something as simple as responding when they ask you to assist with a phone bank. Anything that can build a sense of team…will come back to you many times over.
Consider opening your facility for tours and training in partnership with local “job clubs”, scouting organizations, or trade schools. Use time that is normally “downtime” for you to educate the next generation on your trade. At very least a positive experience will get passed along to several parents who are potential customers. At best, perhaps you’ll find your next employee or a new source of inexpensive labor. Partnering with schools may get you in on the ground floor for upcoming uniform opportunities, bookstore sales, or fundraising projects.
Special Event Marketing
Even the smallest of communities have community fun runs, neighborhood home repair projects and other opportunities. Your involvement should start with providing all the promotional products (not just the t-shirts or golf shirts). Everything is negotiable…remember to think about stakeholder analysis and keep in mind that win/win relationships involve you being able to promote your project as well. We were asked to quote on t-shirts for a new race in town…The Jingle Bell Race for Arthritis. Instead of just providing the quote…the salesperson asked the right questions…What is it you are trying to accomplish? How much money do you need to raise? Are you looking for sponsors? This led to a tremendous two-year opportunity.
Jingle Bell Run
Case example: The first running of The Jingle Bell Run for Arthritis . The local Arthritis Foundation called about pricing for t-shirts for a new fund raising race they wanted to run. They were asking $5,000 for the right to be called the “presenting sponsor” of the event. Through discussions we learned that in addition to race shirts, they wanted race sweatshirts to sell, race numbers for the racers to wear, trophies, ribbons, etc. for the winners. There was to be a fund raising component and reward program tied to the amount of money raised by individuals with a water bottle given to those who raised $50, a wrist band/wallet given to those who raised $75, caps for $100, and other prizes including sweatshirts and jackets for various levels of fund raising.
Since this was a first time event and participation levels were unknown…we successfully negotiated the right to be the presenting sponsor of the event for an in-kind donation of $2,500 (actual cost to us of approximately $1500) and the agreement that I would chair the event committee. In exchange for this sponsorship, we received our logo on all items for the event, including the promotional flyers, radio and TV spots, and all souvenir merchandise. We were also mentioned several times during the event and our mascot was present to hand out our sales literature and interact with the children.
The day of the actual event we had significant exposure in our local downtown community, and on the evening news as they covered the event. The event resulted in over $75,000 of new business from event participants and people affiliated with the charity. Participation in the event was good…but organizers had been overly optimistic in ordering…, which resulted in us being the sponsor a second year for an in-kind donation of only $1,000.
In many cases you may need to educate the non-profit about what things are important to you in order to provide sponsorships. Often the logo exposure you receive is worth far more to you than the costs to provided the materials the charity needs. It may be inclusion in the event program with an ad, a mention in the radio & TV ads for the event, or your logo on prizes and clothing for the event. If you have your own clothing labels…this is a great time for them. I always suggest in-kind sponsorships vs. cash donations for special events…for two reasons…#1–it’s cheaper for you because of profit margins. #2-It showcases your actual work so prospects can see the quality work you can do for them as well.
In marketing you always want to consider the perceived credibility of the message. There are three basic levels of “Truth” for recipients of information about your business: 1) You pay to tell the public (paid advertising) 2) You get to tell the public for free (public relations). 3) Someone else tells the public for you. This third and highest credibility level is what you are striving for by associating with charities and others. When others send you referrals it is a 3rd party endorsement of you and/or your product. By providing needed merchandise for special events through partnering/sponsorships…it says that the charity (3rd party) thought enough of you to partner with you. This is a very different level than just supplying merchandise for the event as a vendor. You can get much more “bang for your bucks” by partnering than you could by discounting your product or service to get the deal. This also maintains the perception of value for your product/service. You bring more to the table than just product…you bring creativity…and you bring your own ability to care about others and your community and to demonstrate that through partnering.
I Challenge You
Should YOU partner with non-profits? That depends on your perception of the viability of non-profits as a target market and source of partnering. Your perception is your reality…and it becomes a self-fulfilling prophecy, one way or the other. If you believe non-profits always want the cheapest price, only care about their cause, and don’t have anything to offer you …you are right…and you shouldn’t attempt partnering.
Opportunities abound where you can make a difference for an organization…and your business. Like any worthwhile target market…preplanning, focus, creativity, and program review are the watchwords to live by. Many opportunities go untouched because our “charitable giving brains” and our marketing brains don’t work together. When you begin looking for marketing opportunities in the everyday requests you receive…you’ve taken the first step to tapping this target market. Look for opportunities to make a difference in your community and it can make a difference for you.
Marketing through partnering with non-profits is built on a win/win/win relationship foundation that takes into account the unique strengths and needs of the parties. Your company, the non-profit, and the clients or members of the non-profit are all “stakeholders” in your partnerships with non-profits. Thoughtful identification and consideration of these stakeholders can help each group meet the needs of the others.
To truly take the other parties into consideration…it must be “real”. Your association with non-profits cannot be faked. If you are truly only in it for yourself and your “bottom line”…don’t attempt to “partner” with non-profits. Your insincerity will hurt your business rather than helping. Don’t try to be all things to all charities…or you’ll end up broke and empty inside. Choose one to three causes or groups that mean something to you personally…or that have supported your family members.
Just as it must be real for you…it must be true partnering for the organization as well. Most professionals in non-profit organizations understand that businesses that affiliate with them do so because of “enlightened self interest”. Most of us privately support the charities that are near and dear to our hearts…and we don’t expect anything in return. Let’s face it…we are all in businesses that get asked for a LOT of donations. What I am suggesting is a way to incorporate your business marketing plan with your charitable giving plan.
I challenge you that whenever you hear a request for donation or discount…think “opportunity is knocking”. When you are asked for a donation…or better yet…whenever you interact with a non-profit…find out what sponsorship opportunities are available. That tells the non-profit you are interested in partnering…and that you expect something for your generosity.
I promise you that in looking to create ways to help others…you’ll end up helping yourself. Many times you’ll discover that the benefit to your company far outweigh what your new partner has requested.