Nonprofit Motive

What for-profits can learn from the likes of NGOs.

By Melissa Fleming

Consumers are demanding corporate social responsibility from the companies whose products or services they purchase. According to the 2013 Cone Communications/EchoGlobal CSR Study, 91 percent of consumers are likely to switch brands to one associated with a good cause, and only 7 percent think it’s enough for companies to engage in issues through donations. Nonprofits have developed approaches and skills that for-profits could benefit from as well:

Compelling mission—internal benefits. Most people want to do work that really matters. Working for a nonprofit is rewarding, because the organization has meaning built into its mission. Therefore, it is easier to understand the role the organization¬—and by extension the staff member—is playing to make the world a better place. Nonprofits motivate and inspire their workers beyond the incentive of money.

Salesforce.com has created a Foundation to promote a culture of giving back and a value proposition that goes beyond profit. The 1/1/1 model leverages Salesforce’s people, technology, and resources to improve communities by donating 1 percent of its equity, 1 percent of its product, and 1 percent of employees’ time to charity. The Foundation has given more than 445,000 hours of community service, product to 17,500 nonprofits, and more than $40 million in grants.

A new imperative exists, too. Millennials want to work for a company that does meaningful work and has their best interests in mind. Tapping into that pool of talent going forward will require a level of meaning whether the enterprise is a for- or nonprofit.

Compelling mission—external benefits. At successful nonprofits, passion and purpose go hand in hand. Nonprofits devote much thought to defining their missions. Rather than making generalizations, they focus on specific strategies needed to attain the primary goal. For example, Kiva’s mission is to connect people through lending to alleviate poverty, and Make-a-Wish grants the wishes of children with life-threatening medical conditions.

Nonprofits start with the outside community they are serving and translate that into action. That mission creates loyalty by building an emotional connection with customers and stakeholders. Nonprofits give donors an opportunity to be heroes and to have a role in the success of the mission.

For- and nonprofit enterprises want engaged communities that believe in the mission and the product or service, and will advocate for the brand. Brands such as Apple, Nike, and Patagonia have done this for years. Companies such as Tom’s and Warby Parker connect with their customers not only in these ways but also via charitable components woven into their missions.

In a world where 89% of consumers express a responsibility to purchase from socially responsible companies, this is enlightened self-interest. Having a purpose is not simply a cause marketing initiative or creative way to build brand equity; it needs to be part of the company DNA for it to feel authentic to the consumer.

Relationship building. Nonprofits have to work harder than for-profits to generate revenue, especially to support their operations. There is a lot of competition for donors; the onus is on the nonprofit to prove the project’s worth. Despite these obstacles, nonprofits collectively received approximately $316.2 billion in 2012 to help fund projects. And there are no silver bullets. Cultivating relationships over many years and through many rejections is crucial. In addition, nonprofits tend to show their appreciation and share their impacts. Organizations such as Kiva and DonorsChoose mobilize thousands of donors by allowing them to connect directly with the project or people.

Resourcefulness. Nonprofits typically must do more with less. The fundraising imperative requires organizations to think about how to spend that money scrupulously and how to handle budget windfalls. That helps organizations from splintering limited resources on the trend du jour. Smart nonprofits also rely on a mix of volunteers for simple tasks and high-level professionals providing sophisticated services. At my organization, Catchafire, we match professionals—primarily from the for-profit world—with organizations that need their pro bono help.

Additionally, nonprofits have sought new funding sources through crowd funding sites such as Crowdrise and Kickstarter; the latter shares success stories and updates with its patrons to deepen those relationships.

As the lines between nonprofits and businesses continue to blur, each can take cues from the other. The nonprofit’s focus on mission and action, engagement of its employees and customers, resourcefulness, and relationship building are just a few of the best nonprofit practices that could greatly enhance the for-profit world.

Posted November 1, 2013 in 25115