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  Corporate Money In Context

Welcome to the first module on building partnerships. In this section, we’ll outline the benefits and the risks of corporate partnerships, and give you a good way of evaluating your needs.

Grant funding is the bread and butter of many non-profits and it is often one of the best ways to fund program development when you’re starting out. However, there are very few, if any, foundations who want to fund your program indefinitely. There can be restrictions on funding, and a lot of reporting that needs to take place.

Because of this, many organizations turn to corporate funding. Here are a few common benefits of corporate funding partnerships:

  • potential for a long-term relationship,
  • larger overall investments,
  • more likely to provide unrestricted funds, so that you can spend the money when and where it’s most needed,
  • significantly reduced reporting requirements, especially when compared to a government grant,
  • distribution and marketing benefits,
  • and in the most innovative partnerships, like those that follow the Hybrid Value Chain Framework that Ashoka has developed, there is the potential to transform markets and millions of lives.

But there is no such thing as free money. Each type of funding has costs and I’m not just talking about the expenses that sit on your balance sheet.

In the case of corporate funding there are three potential costs that you need to keep in mind:

  1. Return on your Time: Researching, reaching out, and cultivating potential corporate funders can be a very time consuming process. It can take years for a partner to sign the cheque, and you are likely to get a lot of no’s in the journey to getting one ‘yes’. As with any form of funding, keep in mind the investment you are making of your time and energy. If you aren’t getting a lot of traction, trying other forms of funding might provide a better return on your investment.
  2. Public Perception: Most business partnerships will be far more public than any other form of funding. The wrong partnership can backfire, jeopardizing the relationships and reputations you’ve built. For a recent example check out Susan J. Koman Foundation’s partnership with the oil and fracking company, Baker Hughes. A $100,000 donation to breast cancer research was coupled with the painting of 1,000 pink drill bits sent to drilling sites world-wide. With claims that fracking releases cancer causing chemicals into the environment, this partnership has caused a lot of controversy. Be sure to think through how your partnerships might be perceived by others.

3. Mission Drift: In a less public way, corporate funding, like any form of funding, can put pressure on your mission. If you are too opportunistic, you can fall into the trap of following the funding dollars, even if doing so doesn’t further the cause that made you want to start your organization in the first place.

If you do any advocacy work, you also need to think about how you might intentionally or unintentionally alter your message to please your funders.

Finally, if the company will sell more products by associating itself with your organization you want to make sure that activity isn’t jeopardizing the vision of a better world you are working to create.

To help prevent both mission drift and negative public perceptions we recommend that you work with your stakeholders to create a corporate screening policy.

A screening policy includes information about which corporate partners you'll work with, and under what conditions you will work with them - things like what industry they are a part of, conditions around their labor practices, or what influence they will have over your programs.

This policy can then guide future decisions about which companies to reach out to, helping to avoid problems in the future. You can download a sample corporate screening policy of an environmental NGO here.