What should you ask yourself when considering a corporate partnership?

Michael Edwards’ book, Small Change: Why Business Won’t Save the World is our feature this month and is an essential read for any nonprofit that’s engaging businesses with their mission. We offer another compelling excerpt below from our Page to Practice interview.

CausePlanet: Your book makes a terrific case for nonprofits staying out of the business of market strategies to create social change. What advice would you give a nonprofit CEO who would like to disengage a business partnership but faces unanimous opposition from the board?

Michael Edwards: At the moment, market-based strategies are much in vogue, and there’s a huge amount of hype about their impact and effectiveness. Board members obviously listen to that hype and want to become involved, perhaps without delving very deeply into the costs and benefits of these strategies. So I understand the question that you’re raising. I think the way to approach this question is NOT through blanket opposition, which just seems defensive, but through a principled and pragmatic analysis of the nonprofit’s mission and how best to promote it in a rapidly-changing world. There is already plenty of evidence that shows how a mission for social change can be damaged by the adoption of market-based strategies, but often nonprofits don’t know about it, or don’t mobilize it in and for their work. Board members aren’t stupid, so if they see that something isn’t working for their organization and others like it, they are usually open to discussing why that is.

CausePlanet: The allure of a large gift from a philanthrocapitalist is very powerful for a nonprofit organization—especially because their methodology makes sense in the corporate world. What questions should nonprofit leaders ask of themselves or the philanthrocapitalist to determine if the collaboration is appropriate?

Michael Edwards: Money always has a “steering effect” on the organizations that receive it, especially if it comes with strings attached, and those strings are often quite tightly-wound by “philanthrocapitalists” because they believe that close guidance is essential for success. After all, that’s a basic lesson of venture capital investing and supply chain management, even though it’s incompatible with the freedom and flexibility that nonprofits need to respond effectively on the ground. So, nonprofit leaders should ask themselves what trade-offs are acceptable in each situation, and how far they are prepared to go in making compromises in order to unlock these new resources. Sometimes these trade-offs will be manageable through careful negotiation with the donor, but at other times the best option may be to forgo the gift entirely. That’s a tough choice in today’s economic climate, but growth isn’t always the best path to impact.

CausePlanet: In chapter four you identify only two ways that businesses should safely collaborate with nonprofts: 1) delivering social and environmental services; and 2) strengthening the financial management of nonprofit organizations. Are there any potential pitfalls nonprofit leaders should try to anticipate with these recommended channels?

Michael Edwards: I think that depends on the mission of each nonprofit. A community organizing or campaigning group, for example, may need little of either of these two things, though no doubt we could all benefit from stronger financial management. Over the last ten years, nonprofits have been pushed further and further towards service-provision as their core mission, and away from the social and political work of civil society. I think that’s a real problem, because it’s that social and political work that creates the biggest impact over the long term (think of the Civil Rights movement, for example, or the mass membership groups that pushed the federal government to pass landmark social legislation after World War II). So, I want nonprofits to recover that part of their mission at every opportunity. If a focus on service-provision or market-based revenue generation pushes them away from doing that, I’m against it, but if the two can be successfully combined, that’s good. So, a pragmatic way of approaching these questions is to ask how nonprofits can increase the social and political impact of their service-providing and revenue-generating activities. There’s already some good work on that question from the Building Movement Project at Demos in New York and others elsewhere.

For more information about Small Change, visit Michael Edwards’ site at www.futurepositive.org. For the complete interview, visit our summary store or subscribe to our monthly summaries of Page to Practice. Or, you can keep up with what we’re reading on Facebook and Twitter.

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