Social Services Agencies and Other Nonprofits Struggle to Build Relationships with New Corporate Partners, but Deeper Levels of Engagement Extend Beyond Hard Dollars
Making the first key outreach to potential corporate partners is the biggest challenge for nonprofits in Massachusetts, according to a survey released jointly today by the Massachusetts Nonprofit Network and Natixis Global Asset Management (NGAM), one of the 15 largest asset managers in the world.1
The challenge is particularly daunting for nonprofit human service agencies, which need creative ways to stand out amidst competition from larger arts and cultural organizations.
More than half of the 103 Massachusetts nonprofits surveyed said they were “least effective” in making “initial contact” with potential business partners and identified that as the most difficult part of getting support from the business community.
“Breaking the ice is hard in any new relationship, and it's particularly challenging for human service and other nonprofits pursuing corporate partners in an increasingly competitive landscape,” said John Hailer, president and chief executive officer of NGAM – The Americas and Asia. “Nonprofits are an essential part of our community fabric, delivering services that provide a safety net and help fuel our economy. Those that provide critical human services are too easily overshadowed by large cultural organizations and brand-name arts and humanities nonprofits.”
Even after contact is made, demonstrating the value proposition for a potential corporate partnership is daunting. More than 35 percent of survey respondents rated “identifying how businesses will benefit from partnering with my organization” as one of the things at which they are least effective. Compounding the challenge is fierce competition from others in the nonprofit sector, including well-known arts and cultural organizations. In fact, nearly three-quarters (almost 74 percent) of organizations surveyed believe it is more difficult for nonprofits that focus on core social services to gain corporate support for their organization.
“The private sector can be a powerful partner to nonprofits and, as the survey illustrates, it is often under-leveraged by human service organizations,” said Rick Jakious, CEO of the Massachusetts
Nonprofit Network. “Human service organizations can benefit from the time, talent and treasure of the private sector. It is critical, however, that they understand that strong corporate engagement must be based on real partnership, not just checkbook philanthropy.”
Several of those surveyed said their most effective partnerships were with corporations that took time to learn about the organization they were supporting and who understood the significance of its mission. Many also reported that corporations are increasingly expressing a desire to take an active role in the work of their nonprofit partners. Other organizations said businesses are demanding “accountability” on the part of the non-profits and evidence of positive outcomes that result from their work.
“A plaque at a homeless shelter doesn't reach the same number of eyes as a sponsorship ad at a musical program or a fundraising gala,” Hailer said. “But the relationship created offers a different – and often deeper – kind of experience. Both parties benefit from that.”
Jakious observed that while “marketing and brand visibility” are key metrics by which corporate funders evaluate potential partnerships, there are other measures which play better to the strengths of human service organizations. Chief among them: the opportunities a partnership provides to engage employees of the company.
“Employee engagement, when executed well, is a win-win for the nonprofit and its partner. And it can come in the form of one-day or ongoing volunteer opportunities,” Jakious said. “Increasingly, employers are seeking out skill-based volunteer opportunities. This can be a source of crucial expertise to a nonprofit, such as legal support, financial guidance, marketing expertise and so forth.”
Among the key findings of the NGAM survey:
- The competition among nonprofits for corporate financial support remains fierce. Just over half (54 percent) of organizations surveyed said corporate funding has either held steady or increased in the past year, but a significant number (40 percent) said their corporate funding has declined.
- Building new relationships with potential corporate partners isn't easy. Nonprofits usually know whom they would like to seek out for support, but half (50.5 percent) said making initial contact with corporations is the hardest part about seeking support from the business community.
- The current climate of economic uncertainty makes maintaining corporate sources of financial support nearly as difficult as securing them in the first place. More than a third (40 percent) of organizations surveyed saw their funding decrease over the last year. However, in spite of the present economic situation, the majority of organizations (54 percent) reported that their funding either held steady or increased. Specifically, just under a quarter (24 percent) reported that they saw no change in corporate funding, while nearly a third (30 percent) saw at least a slight increase.
- A huge majority (86 percent) of nonprofits surveyed receive some support from financial services, banking, and insurance companies. This makes the financial services sector far and away the most frequent source of support for the organizations surveyed.
- The next most common was the healthcare sector (47 percent), which was followed by the construction and development industry (35 percent).
The NGAM corporate philanthropy survey reviewed the online responses of 103 nonprofit organizations from across Massachusetts. Participants responded to an online survey of 20 questions – both multiple-choice and open-ended. Results were calculated and then reviewed by NGAM and the Massachusetts Nonprofit Network.
About Natixis Global Asset Management, S.A.
Natixis Global Asset Management, S.A. is one of the 15 largest asset managers in the world based on assets under management.1 Its affiliated asset management companies provide investment products that seek to enhance and protect the wealth and retirement assets of both institutional and individual investor clients. Its proprietary distribution network helps package and deliver its affiliates' products around the world. Natixis Global Asset Management, S.A. brings together the expertise of multiple specialized investment managers based in Europe, the United States and Asia to offer a wide spectrum of equity, fixed-income and alternative investment strategies.
Headquartered in Paris and Boston, Natixis Global Asset Management, S.A. has assets under management totaling $711 billion (€560 billion) as of June 30, 2012.2 Natixis Global Asset Management, S.A. is part of Natixis. Listed on the Paris Stock Exchange, Natixis is a subsidiary of BPCE, the second-largest banking group in France. Natixis Global Asset Management, S.A.'s affiliated investment management firms and distribution and service groups include: Absolute Asia Asset Management; AEW Capital Management; AEW Europe; AlphaSimplex Group; Aurora Investment Management; Capital Growth Management; Caspian Private Equity; Darius Capital Partners; Gateway Investment Advisers; H2O Asset Management; Hansberger Global Investors; Harris Associates; IDFC Asset Management Company; Loomis, Sayles & Company; Natixis Asset Management; Natixis Multimanager; Ossiam; Reich & Tang Asset Management; Snyder Capital Management; and Vaughan Nelson Investment Management.
About the Natixis Global Asset Management Corporate Philanthropy Program
Natixis Global Asset Management has a long history of giving, and the company has developed an innovative and strategic partnership between company executives and its nonprofit partners that focuses on increased collaboration and establishing deeper relationships. This unique model has produced better results for the company and its charitable partners such as creating new ways to work together, increased access to resources for the agencies, a more strategic approach to planning and goals, and an increased level of collaboration and engagement from Natixis employees.
The 2012 Natixis charitable partners are eight social services organizations that collectively improve the lives of hundreds of thousands of individuals and families each year, and play a critical role in battling a number of social issues, including homelessness, hunger and unemployment. They are HopeFound, Boston Medical Center, Community Work Services, Elizabeth Stone House, Home for Little Wanderers, St. Francis House, Ellis Memorial and Strong Women, Strong Girls.
About Massachusetts Nonprofit Network
Nonprofit organizations make tremendous contributions to the quality of life in Massachusetts by providing assistance to communities and individuals. In 2007, Massachusetts Nonprofit Network was launched as a statewide organization to help strengthen these nonprofits so they can better carry out their missions.
MNN has three main goals: promote the image of the nonprofit sector as efficient, effective, and essential; strengthen the nonprofit sector by engaging members in advocacy and affecting public policy initiatives; and build capacity in nonprofits across the state.
MNN represents eight sectors of nonprofit work, which are arts & culture, education and youth, environment, health, housing & community development, human rights, human services, and philanthropy.
1 Cerulli Quantitative Update: Global Markets 2012 ranked Natixis Global Asset Management, S.A. as the 13th largest asset manager in the world based on assets under management as of December 31, 2011.
2 Assets under management (AUM) may include assets for which non-regulatory AUM services are provided. Non-regulatory AUM includes assets which do not fall within the SEC's definition of ‘regulatory AUM' in Form ADV, Part 1.