5 Reasons Why Small Businesses Should Work with Nonprofits

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5 Reasons Why Small Businesses Should Work with Nonprofits

The benefits of nonprofit-corporate partnerships are many. As a small business, working with a nonprofit can help support a cause that aligns with your company's brand or champions your mission. It can also help you connect with new audiences and consumers. While many small businesses engage in some form of charitable or community partnerships or sponsorships, you might be surprised to find out how powerful it can actually be.

Find out more about the benefits of nonprofit collaboration and how to partner with a nonprofit as a small business with the help of our industry experts. 

Business Tools & Resources | Incfile

5 Benefits of Nonprofit Collaboration for Small Businesses

1. It Generates Good Publicity and Social Responsibility 

A company’s moral compass is an increasingly important factor for many consumers when choosing which businesses to support. One of the biggest reasons businesses decide to work with nonprofits is because it demonstrates social responsibility and community engagement. As a bonus, this generates good publicity for your company as a result. 

“If your company is seen as caring and compassionate about people and the community who live in it, those residents will think more highly of you. It sets those companies apart from others who are viewed as cold and uncaring,” explains Ron Rescigno, vice president of Rescigno’s Fundraising Professionals of Bridgeview

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It’s often described by the term “halo effect.” “It is a powerful side-effect of doing good, and when customers and employees see the owner’s enthusiasm, it converts to loyalty,” Dan Pontius, CEO of Choose Mental Health, further explains.

This is backed by data too, with SCORE data showing that 85 percent of consumers have a more positive image of a company that gives to charity. This means your social responsibility efforts can play a major role in your business marketing techniques to potential customers.

2. It Shows Industry Leadership 

Another added benefit of nonprofit-corporate partnership is that it can also show good leadership within your industry. “It can demonstrate how the for-profit organization sets an example as a good corporate citizen and leader in their industry and/or community,” says Jim Elliot, founder of the Illinois-based nonprofit organization Diveheart. And good leadership often attracts more community attention and raises your business’s status within your niche.

This can help set your business apart from competitors and other larger companies that might not be as in touch with the local community. “This partnership can provide added value for a business that will help differentiate it from the rest of the market,” Elliot says. 

This is especially helpful for small businesses that are trying to compete with larger companies. Corporations generally only donate around 1 percent of their profits, whereas smaller businesses tend to donate anywhere from 2-6 percent of their annual profits before tax, according to Charity Choices. This can help set your small business apart and show more active leadership within your community compared to other, larger companies. You might find many local consumers will be more likely to look at your business favorably as a result. 

3. For Employee Satisfaction and Well-being

However, a nonprofit partnership doesn’t only have to have external benefits. It can also provide a positive effect internally for your employees. One of the main ways a business and nonprofit partnership can work together is for employees to get involved in volunteering opportunities.

This has a well-documented benefit for employee retention and increased well-being, which is vital for small business owners, with 93 percent of employees who volunteer saying they're satisfied with their employer. If you're a new business, this is a great strategy for attracting your first employees.

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According to Deloitte’s Volunteerism Survey, around 89 percent of working Americans believe that companies that offer volunteer activities offer a better working environment than those that don’t. This provides a huge opportunity to get your workers involved in some form of active volunteering or community work that can also benefit your partnership with a nonprofit.

4. It Opens Up New Markets and Audiences

Making connections with other organizations and businesses will always open new opportunities and partnering with nonprofits can put your business in front of new eyes and broaden your reach. “When a business connects with a nonprofit, the owner interacts with a whole new audience of potential customers. Donors and volunteers will hear about your company, maybe even for the first time ever,” explains Rescigno. 

This means that you might not only gain good publicity but also new customers and even future employees in the process. These strategic partnerships prove to prospective employees and business partners what your company stands for and that its interests extend beyond just turning a profit. Even the types of nonprofits that you partner with will reflect the topics and issues that your company should care about. This also goes for finding a new business partner. It’s a win-win scenario.

5. It Provides Mutual Benefits 

It’s not only the for-profit that reaps many of the benefits either. “Both partners should think creatively about leveraging their unique business models to maximize the benefits for all,” says Elliott. While social responsibility can sometimes seem like a selfish endeavor, a nonprofit strategic partnership also has many mutual benefits.

The nonprofit should also be able to gain some advantages through the partnership. This can include financially with fundraising assistance, or it can also simply include manpower by providing volunteers or even a platform for amplifying a cause. Either way, it works best when it’s seen as a partnership rather than a one-way transaction.

How to Partner with a Nonprofit

There are many ways to find a nonprofit to partner with your company, but finding the right one will take a little extra effort. Here are some tips for the best nonprofit matchmaking practices.

  • Choose one or two nonprofits over supporting several at once; this can help focus your efforts on a main cause.
  • “Make sure to support something that you are passionate about and that fits into your brand,” Pontius recommends. This can be much easier for marketing purposes for both your business and the nonprofit.
  • “Follow the news and take advantage of timing and opportunities in the marketplace and in the world,” says Elliott, which can help to join causes that resonate with the wider community at a given time.
  • Be consistent, deliberate and visible in your partnership to get the most out of it. Join the board or committee, attend meetings and get to know the leadership of the nonprofit.

Partnering with a Nonprofit for the Greater Good

Don't forget that the benefits of a nonprofit partnership go beyond the benefits for your company, the nonprofit and the customers you serve. It engages and inspires your community and sets a wider example that other companies can follow. Studies are finding that when businesses and nonprofits from different sectors come together to tackle a common issue, it leads to greater success in resolving those problems, supporting the greater good.

Partnering with nonprofits is a smart business move, especially for small businesses trying to gain community trust and a good reputation. There are plenty of mutual benefits for both the nonprofit and corporate organization in working together, including increasing reach and impact, promoting the cause or brand and providing operational assistance.

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