Three Ways to “Go into Business”

From both the book and the articles this week, I’ve seen at least three ways for nonprofits to collaborate with for-profit organizations (There might be more).

In my last week’s posting, I asked an off-topic question: Does MBA students care as much to collaborate with nonprofit or government as we do? And this week, when I read the word “Corporate Social Responsibility (CSR)” while I’m searching what “corporate quid pro quo social entrepreneur” means, the answer jumped into my mind, which leads to the first way to collaborating with business: asking for more. It might sound naïve, but after I read the article: Putting CSR into perspective, I found it implementable. Business entrepreneurs are becoming aware that they can “demonstrate corporate responsibility and good corporate citizenship by ... making a sizeable donation to a major charity ... in exchange for that charity's very public endorsement of the company's good citizenship”. So I think it is true that businessmen want to make money, but by making an enterprise image, the public would trust this brand more and thus increase the sales volume. A great example I will share with you happened in China. After the disastrous earthquake in 2008, a local beverage enterprise which sells drinks made by traditional Chinese medicine (which is not very popular among young people, of course), donated 100 million RMB (around $14 million) to help the people and families affected. This movement shocked the public, and in2008, their sales volume became the top one in China’s market — the first time a local beverage brand exceed Coca Cola and Pepsi. And this became a classic marketing case in China. So, while for-profit organizations are considering collaborating with nonprofits as well, what we can do is to win the competition to get more money. Asking them for donation, announcing the public about their donation, so that we can gain a win-win result in both promote the business enterprise and ourselves.

The second way is to get in partnerships with for-profit organizations. In the third chapter of the book, Forces for Good, the example of Environmental Defense caught my attention. By using advanced technology to help McDonald’s to reduce plastic waste, they meet their mission to protect the environment while getting more donations. More important to me, this partnership has the potential to last for a long time. Because not like simply asking and giving relationships that many nonprofits have with for-profits, this partnership is established on a tangible foundation. It’s hard for other similar nonprofits to substitute for Environmental Defense in this relationship with McDonald’s, because the technology and experience in working together have tightened this partnership.

The third way is to run a business-like nonprofit. A good example from the article is Delancey Street Foundation. For me, it’s not only business-like, it’s almost a small city! Matt has explained this point fully and I talked too much about the first and second ways, so I’ll just stop here.