Working with the Business Sector Pursuing Public Good with Private Partners

Because of their financial independence, foundations have a unique position at the intersection of nonprofit and for-profit worlds.

Grantmakers working in corporations sometimes find it hard to get attention and cooperation from their business colleagues or senior management — not because their civic activities aren’t valued but because they aren’t valued enough.

Grantmakers in independent foundations may find that the first challenge in working with business is persuading their own institutions that an alliance is a good idea.

When private foundations seek alliances with business, they often do it through their grantees rather than on their own. But that’s not always the case. One foundation, for example, sought out a direct partnership with a large retail developer, in hopes of creating employment opportunities for lowincome residents of a city where the developer would soon be opening a new mall. The company had promised the city that it would give at least one-quarter of the jobs in the mall to residents of low-income neighborhoods. The foundation wanted to ensure that people who most needed and wanted the jobs would be able to apply, get training, and succeed once they were hired.

Businesses, like most other organizations, pay closest attention to what their peers – and especially their competitors – are doing. Hence, the potential for a cross-sector partnership to have impact is much greater if a major industry player is an early adopter and advocate of change.

Mobilizing consumers through certification. One way to enlist consumers directly in the cause of business reform involves certification — that is, letting consumers know when companies’ production and distribution methods meet standards of social responsibility.

One well-known model of business-nonprofit collaboration has been the cooperation of American financial institutions and community-based organizations in promoting and financing the redevelopment of disadvantaged areas. Foundations have played an important role throughout the process.

Grantmakers and grantees point out that there are three principal motivators for companies to take up a social agenda: values, strategy, and the pressure of regulation or litigation, either actual or threatened.

Often, the reason for pursuing greater corporate resources is not simply a matter of increased fundraising but something more strategic: a desire to raise companies’ interest in solving a problem or pursuing a cause. More than just dollars, the desire is to build relationships and a sense of investment among the contributing firms.

The challenge in these latter, more complex cases is to identify a strategic interest of the company that the prospective relationship might satisfy. Sometimes a community needs goods or services that the company provides, but the company has been unsuccessful at doing business there — perhaps because the company lacks knowledge of the community or has underestimated the potential market.