How non-profits impact small for-profit businesses

A report by Walden University was quoted to have said that 80 per cent of global citizens agree that non-governmental organisations (NGOs) make it easy to be involved in positive social change. However, many people believe that non-profits are almost perpetually entitled to their for-profit counterparts for survival. Invariably, one of the reasons some people establish non-profits is to leverage the financial and technical supports of for-profits in their operations. In this report by KINGSLEY ALUMONA, many Nigeria’s non-profit founders like Olugbenga Ogunbowale, Yetunde Babatunde, Ridwan Rasheed, Jane Kalu, and many others, speak on this and other issues.

Non-profits in Nigeria and benefits of being a non-profit

According to a 2020 article on Prosper Strategic website titled ‘2020 Nonprofit Stats: Key Facts and Figures’, there are more than ten million non-profits and NGOs worldwide. However, the data in Nigeria is ambiguous. A 2013 report from a website puts the number of NGOs in Nigeria at 1200, which—if that figure has grown in recent times—is not enough.

In his 2019 Accounteer blog article, titled ‘Top organisations that would give your business a grant in Nigeria’, Lanre Ogungbe listed some top non-profits that support small businesses in Nigeria, which include, but not limited to, The Tony Elemule Foundation, Shell LiveWIRE, African Women Development Fund, Ford Foundation, Bill and Melinda Gates Foundation.

Olugbenga Ogunbowale—the co-founder of The Orphan Empowerment Society (TOES), an organisation that helps orphans escape poverty through capacity building, entrepreneurship and mentorship—is not satisfied with the number of NGOs operating in Nigeria. “More for-profit businesses need to be actively giving back through corporate social responsibility (CSR) initiatives, and more non-profits need to reach out to them to scale their impact,” he stressed.

Yetunde Babatunde—the founder of Alive Foundation, an organisation that explores empowerment, advocacy and charity to help orphans, inmates and street children achieve their hopes and potentials—stated that it is hard to see a non-profit that assists small for-profit businesses. “Most non-profits focus is solving societal problems. Maybe, because of that, most people who tend to run small profit businesses don’t run to them for help,” she said.

There are benefits of being a non-profit. Shoshanna Delventhal, in her 2015 Investopedia article, titled ‘The pros and cons of being a nonprofit’, noted that one of the benefits is that the non-profit status increases the chances of investments to a non-profit, as individuals are more willing to donate to organisations that will help reduce their tax liability.

Ridwan Rasheed—the executive director of ZeroToOne Foundation, a non-profit that empowers young people across Africa with transformational opportunities and skills—noted that, though there are many benefits of being a non-profit, one of them is that it can help one channel their tax into an activity they love. “It’s a huge privilege to be able to lead selfless and amazing people who volunteer and donate their time, expertise, resources and money for a non-profit like ours to work and make the impact we’re making,” he said.

Jane Kalu—the founder of Viable Motivators, an NGO with the vision to raise rural girls who are strong in purpose, health and with a passion to build a better world—noted that one of the profound benefits of being a non-profit is having quick access to professionals and experts as volunteers to achieve the vision or project at hand at no cost. “It’s easier for NGOs to have professional volunteers deliver on the job than it is for individuals or corporate organisations,” she said.

How small for-profits can partner non-profits that suit their vision 

In today’s competitive business space, the need for a non-profit and for-profit partnership is increasingly becoming part of the corporate-world tradition. This necessitated an article in fourlenses.org, titled ‘Profit-nonprofit partnership model’, to stress that profit-nonprofit relationship may be structured as a joint venture, a licensing agreement or formal partnership.

Bruce Burtch elaborated more on the four lenses article. His 2017 topnonprofits.com article, titled ‘10 benefits that only non-profits can bring to partnership’, emphasised that, “There is nothing in business today that provides as much economic and social benefit as a strategic partnership between any combination of the non-profit, profit, education and government sectors when focused on the greater good.”

Ogunbowale noted that non-profit and for-profit partnership is necessary because it is a symbiotic relationship. “Both parties are uniquely positioned to help each other make a tangible, measurable difference in the society,” he added.

Babatunde stressed that the partnership is necessary in order to connect to broader audience. “Successful partnership can allow the non-profit access more skills, resources and new ways of tackling social problems. While for the for-profit business, it’ll help increase their customer base, attract new business partners and relationship,” she said.

Julia Campbell, the author of the 2017 book ‘Storytelling in the digital age: A guide for nonprofits’, gave an insight on how for-profits can find and partner with non-profits that suite their vision. “Tell a story that’ll resonate with this particular business partner and find out where their interests lie,” she said.

Latasha Doyle’s 2020 candid.org article, titled ‘How non-profit can build partnerships with businesses’, brings another perspective to this. “To get started, do a quick internet search for businesses in your area and find contacts, email or call,” Doyle advised.

Rasheed stated that technology and the internet are apt in this regard, adding that the world is getting smaller than is imagined. “Most non-profits are enlisting online to have more visibilities to stakeholders, and that’s an impactful thing to watch out for,” he said.

Kalu advised that small for-profit businesses should take time to understand the non-profit organisation’s vision and objectives, and how transparent and credible the leaders of the organisation are. “The process of volunteering will help them advance in their purpose and business,” she added.

Values non-profits can add to small for-profit businesses

Among the many benefits that abound, Alan Andreasen’s 1996 Harvard Business Review article, titled ‘Profit for nonprofits: Find a corporate partner’, would suffice. Andreasen noted that a non-profit organisation’s most valuable asset is its image, and that businesses also gain access to the non-profit’s clientele, staff, trustees and donors, all of whom are potential customers.

Burtch itemised ten ways for-profit could benefit from non-profit partnership. Among the benefits are: increase sales of products and services, increase customer and brand loyalty, increase shareholder returns, attract new business partnership and relationship, receive a tax donation for contribution, etc.

To the list of benefits, Doyle added: CSR, employee satisfaction, marketing and implementation.

In terms of resource donations, setup, funding, etc, Ogunbowale stated that manpower is one of the values a non-profit can add to a small for-profit business. He stated that at TOES, they have over 1,000 active volunteers (on ground) and another 4,000 volunteers who provide virtual support. “This means we can execute huge projects in any corner of Nigeria and in six other African countries,” he added.

Babatunde stated that in terms of marketing, it will increase small for-profit’s customers’ range and brand loyalty, and in terms of funding and set-up, their donors and sponsors can become their top investors. “Working collaboratively also allows both organisations to do more and better work in terms of their missions,” she said.

With leadership and digital know-how many non-profits have amassed, the benefits they can offer small for-profit businesses go beyond funding, marketing, sales, branding, etc.

In terms of leadership, soft skills, training (online and off-line), mentorship, etc, Rasheed noted that businesses are always looking to do CSR, and non-profits are perfect partners to help them execute that. “For example, there are several small and big businesses who continue to support various parts of our programmes that align with their areas of interest, and they are able to build on our expertise and influence in ways that are beneficial, impactful and valuable,” he added.

Kalu stated that non-profits can help small for-profit businesses with B2B marketing, promoting them as experts (in their niche) and sponsoring their causes. “Also, through volunteering, small for-profit businesses are exposed to digital training, leadership skills and networks that help them scale,” she said.

Non-profit/for-profit partnership pitfalls and how they can be managed

Andreasen listed some of the major risks non-profits and for-profits can envisage or experience in the course of their partnership. They include, but not limited to, wasted resources, reduced donations, loss of organisational flexibility, antithetical marketing and structural atrophy. “Managers of nonprofits must be aware of the risks in order to adopt a strategy for avoiding them,” he advised.

Ogunbowale stated that another possible pitfall is a mismatch, adding that if both parties are not aligned on a core value, it could end badly. “For instance, if an NGO that is advocating against drug abuse is teaming up with an alcohol or a marijuana brand, the message might get lost in translation,” he said.

Babatune noted that lack of agreement is the main pitfall. “Because it’s a partnership, it’s necessary for all partners to agree with things before they are done,” she added.

On how some of these pitfalls can be avoided or managed, a Forbes article, titled ‘Six big benefits non-profit can gain from for-profit partnership’, noted that increased transparency and engagement can help restore trust, and that charities that are more transparent are always more successful.

Andreasen, on the other hand, stressed that both partners must communicate openly and honestly, adding that, “They should spell out—preferably in a contract—the objective of the project and how they will be measured.”

Furthermore, Doyle emphasised that gaining a partnership and maintaining one are not the same. Campbell concurred with Doyle, adding that, “Partnerships are like gardens, they need tending and they need attention.”

Rasheed stated that every partnership has each partner offering something and getting something in return, and that this has to be very clear from the beginning. “The terms and conditions of the partnership must be properly defined to avoid clashes in projects and interests,” he added.

Kalu agreed with Rasheed, stressing that, to solve some of these pitfalls, both parties need to be transparent with each other. “Everything must be spelled out in black and white, from the common objective/goal to the processes involved and the roles each party must play, together with the result expected,” she said.

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