Article originally published by The News Journal in the author’s column “A Broader Perspective”, October 2009,

Delaware, the capital corporation of America and the place where corporate news tend to flow, might also become the place where cross-polinization between the nonprofit and for-profit organizations takes place. The challenge becomes for corporations to find their call for leadership and support causes they believe in. The nonprofit sector could become corporation’s call for leadership and community involvement.

There are advantages in collaborations between both sectors. For corporations the list is important. Joseph Galaskiewicz in Collaboration between Corporations and Nonprofit Organizations indicates that companies have realized healthy corporations cannot exist in sick communities, and therefore the importance of physical and societal infrastructure. Thus giving to societal welfare serves firm’s enlightened best interest. He indicates that being part of the solution becomes part of corporate strategy.

Nonprofits might become facilitators for corporations and information channels to open up dialogue between them and local communities. It might help them develop connections with minorities who tend to use the services that community organizations provide. Companies are not asked to abandon their mission to maximizing values to its owners, but are called to take a leadership role in solving social and environmental problems, be more transparent, and accountable. The best partnerships between the for-profit and nonprofit sector bring about meaningful institutional changes and even reverse corporate abuses.

Florian Pomper from the NPO-Institut, University of Economics and Business Administration in Vienna, supports the idea and suggests a shift in managerial philosophy from only giving to the owner’s interests to a broader understanding considering obligations of the company towards employees, customers, and society. Corporate giving is a result of the responsibility of companies for society.  

Corporations and nonprofits alike need to expand their concept of partnerships particularly in a restrictive funding environment.  A Deloitte Survey finds that nonprofits and corporations are missing opportunities to offset decline in giving dollars and are not utilizing pro bono work as a type of exchange. There is a tremendous opportunity for corporations to channel their skilled employees to nonprofits as a means of social investment; for that, corporations need to improve their skilled volunteer support: is not longer about writing checks but getting customers and employees involved in initiatives that consequently speak for the brand. Corporations should not expect to bank on their involvement; nevertheless there is a clear positive correlation between corporate giving and customers’ response. 

From the nonprofit perspective there are benefits as well. Peter Drucker in Managing the Non-profit Sector defined them as the essence of the American community. He believed many lessons can be learned from successful nonprofits, like the way they spark volunteers’ interest and make them work as unpaid staff because they believe in the mission. A sense of meaning and contribution to the community is fulfilled by contributing to their causes.

Margi Prueitt, Executive Director of the Committee of 100 and former Chief Executive Officer of American Red Cross of the Delmarva Peninsula supports the idea: There is no doubt that nonprofits need to adapt businesses best practices, but businesses need to adapt nonprofits best practices as well. They have to learn how to motivate workers to the point that people essentially work for free willingly. They might also learn the passion needed for businesses success.   

For nonprofits the opportunity to adapt best business practices could be capitalized through partnerships with socially conscious corporations. Galaskiewicz mentions cause-related marketing, licensing names, logos, and patents to corporations, subcontracting with them, and some other collaboration as a means to bring financial viability to nonprofits. There is also the possibility of technology transfer, and for-profit investment in nonprofit infrastructure can significantly strengthen their capacity. The slow adoption on skilled volunteer services from corporations could be due in part to a lack of knowledge to securing pro bono projects. Nonprofits might also learn how to build business cases to make an impact on donor entities showing outcomes where they can objectively see that their social investment is paying off. 

PRWeek believes that nonprofits realize now the need to have clear identities and to raise their profile with key audiences. Those elements could also be learned through mutual collaboration. Incorporating best businesses practices should not undermine their legitimacy as mission-driven organizations.

Affiliations and collaboration between sectors bring competitive advantages for both. Boundaries between sectors are fading away. There is an expansion of interface between nonprofits and businesses and the trend continues. The task to undertake is to find the cause that triggers motivations, beliefs, and actions for corporations. Each one should find their inner call for leadership in causes that resonate with their values.  Corporation’s social investment represents a win-win situation where both sectors see return over their investment. To that extent, once the cause or nonprofit is selected, it is important to define a document that outlines responsibilities for both partners and shows mutual accountability. Even these types of collaborations need to define its business case.

The cross-polinization between businesses and the nonprofit sector might well be the next brilliant chapter in the state where corporations are established. A new type of community leadership will emerge from these collaborations.