NNSI Research Report: Nonprofit Business Relationships

by: Michelle Shumate

As nonprofits consider partnering with businesses in a variety of ways, including sponsorships, cause-marketing, or more integrative arrangements, two important questions emerge. First, which businesses should they partner with? Second, how many business partnerships do most nonprofits maintain and talk about? In other words, how many is too many?

Shumate, Hsieh and O’Connor examine these questions in their 2016 study of 122 of the largest, most recognizable U.S. nonprofits. Combing through the websites of these organizations 1,707 of which were with unique businesses. This research is a follow-up to a 2010 study by Shumate and O’Connor examined this same topic from the perspective of Fortune 500 organizations by exploring how businesses report their partnerships with nonprofits.

What are the main findings of the study?

  • Top nonprofits report a median of 16 partnerships. Animal rights, education and religious nonprofits reported fewer business partnerships, on average. Environmental, health, and human services nonprofits reported more business relationships overall.
  • When nonprofits partner with businesses, partnering with only one business in a given economic industry only happens about 11% of the time. This means that nonprofits are likely to partner with more than one business even if the businesses are engaging in the same sort of economic activity. (Businesses, on the other hand, report partnering with only one nonprofit in a given social issue industry 73% of the time.)
  • Nonprofits in the same social issue industry are likely to partner with businesses in different economic industries. However, businesses in the same economic industry do tend to report partnerships with nonprofits in the same social issue industry. For example, businesses in the electric and gas utilities industry are generally more likely to partner with nonprofits in the environmental social issue industry than another industry.

What are the implications for nonprofit organizations?

Differences in how businesses and nonprofit organizations report partnerships suggest that they have different goals for partnering. Specifically, this research suggests that:

  • Businesses and nonprofits are trying to get different things when communicating about their cross-sector partnerships. Businesses are trying to be seen as more caring, so they want to limit their communication to just a few partnerships with nonprofits and only one nonprofit per social issue. In contrast, nonprofits are trying to signal their competence and, as such, will want to communicate about as many partnerships with businesses as possible, regardless of their economic industry.
  • The common notion that nonprofits ought to offer industry exclusivity to their business partners is not followed by top nonprofits. Instead, they report partnerships with several businesses in the same industry.

References

Shumate, Michelle, Yuli Patrick Hsieh, and Amy O’Connor. 2016. “A Nonprofit Perspective on Business–Nonprofit Partnerships: Extending the Symbiotic Sustainability Model.”  Business & Society. doi: 10.1177/0007650316645051.

Shumate, Michelle, and Amy O’Connor. 2010. “Corporate reporting of cross-sector alliances: The portfolio of NGO partners communicated on corporate websites.”  Communication Monographs 77:238-261. doi: 10.1080/03637751003758201.

Blog Entry #2_new-piktochart

Posted inUncategorized