| Glossary
of Terms |
| The following glossary discusses several key terms
in the context of corporate-nonprofit partnerships.
Please note that some terms can be fluid, and that
what one set of partners calls a
"sponsorship" may be called a
"cause-related marketing" arrangement in
another partnership. Partners should lay the
groundwork for success by defining their own terms
from the very beginning of their relationship. |
|
|
|
| Advocacy Alliance |
| A formal or informal partnership in which
nonprofit organizations and companies work together
to alter their operations, promote changes in public
policies, support self-regulation, or endorse
operating or ethical standards. Sometimes these
relationships begin as adversarial ones that evolve
into collaborative arrangements. |
|
A diverse group of manufacturers,
consumer groups, labor and human rights
organizations, and colleges and universities formed the Fair
Labor Association www.fairlabor.org
in 1999 to promote and oversee the enforcement of an
industry-wide code of conduct and monitoring
principles in the apparel and footwear
industries. The organization enforces a
Workplace Code of Conduct that was developed after
months of negotiations between various partners as
part of a White House initiative that led to the
formation of the Association. To date, 13
companies, including adidas-Salomon, Charles River
Apparel, GEAR for Sports, Jostens, Inc., Joy
Athletic, Levi Strauss & Co., Liz Claiborne, Nike,
Patagonia, Reebok, Eddie Bauer, Phillips Van-Heusen
and Polo Ralph Lauren have agreed to be monitored as
part of the FLA. |
|
| Audience |
| An important term in marketing and communications,
referring to the target groups or constituencies to
whom efforts are directed or have an effect upon.
Corporate-nonprofit partnerships often grow out of
recognition of a shared audience, such as a youth
service organization partnering with a beverage or
fast-food company or a home shopping network
partnering with a nonprofit that serves people with
disabilities. |
|
| Brand |
| A brand represents what an
organization, company, product or service stands for
and implies a promise to stakeholders of the
organization or company. Underlying most
corporate-nonprofit partnerships is the goal of
strengthening the organization's and company's brand
identity. |
|
| Brand Equity |
Adapting a classic definition from David Aaker's
Building Strong Brands, brand equity is the set of
assets (and liabilities) linked to a brand's name
and symbol that adds to (or subtracts from) the
value provided by a product or service to a company
or nonprofit organization and its stakeholders.
Major asset categories are:
1. Brand name awareness
2. Brand loyalty
3. Perceived quality
4. Brand associations
Brand equity can be strengthened by well-planned
strategic partnerships or weakened by partnerships
that are inconsistent with the company's or
nonprofit's brand. |
|
| Category |
| Typically refers to a product or service segment,
such as the cereal, beverage, or financial services
category. Nonprofits sometimes agree to an exclusive
partnership with a company in a particular category (see
exclusivity). |
|
| Cause
Branding |
| A term coined by the strategic marketing firm Cone
Inc. that refers to a long-term, strategic
commitment to a cause-marketing branding strategy.
Cone's definition is: "A strategic,
stakeholder-based business strategy that integrates
a social issue or cause into brand equity and
organizational identity to gain significant bottom
line impacts." |
|
| Certification |
| An arrangement in which the nonprofit organization
recognizes that a product or service of a company
complies with certain established standards.
Typically, these certifications are available to any
product or service that meets the standards.
|
| For Example |
| The American Heart Association food
certification program has granted use of its
"Heart Check" icon and name by dozens of
cereals, juices, and other products that meet its
low-fat, low-cholesterol standards. |
|
| Co-Branding |
| Jointly branding an event or product, typically
using both partners' names in the product or event. |
|
| Community Wealth |
| Community wealth is generating new resources to
support mission and engaging market forces to work
for the nonprofit organization. The term was coined
by Share Our Strength and its for-profit consulting
business, Community Wealth Ventures, to draw a
distinction between community wealth building and
traditional fundraising. Community Wealth Ventures
categorizes activities into two "community
wealth pathways": (1) partnerships, such as
cause-related marketing, licensing, sponsorships,
and (2) enterprises that earn income and accomplish
mission at the same time. |
|
| Corporate Social Investing |
| In his book Corporate
Social Investing, Curt Weeden makes the case for
a shift from traditional corporate philanthropy to a
broader, multi-faceted strategy which he calls
corporate social investing. Under this philosophy, a
company sets a specific goal for contributions,
targets its giving toward causes that provide return
to the company, and gives shareholders a means to
hold the company accountable for its nonprofit
investments. |
|
| Corporate
Community Relations |
| According to Edmund M. Burke, founder of
The
Center for Corporate Citizenship at Boston College,
in his book
Corporate Community Relations, corporate community
relations is "the state of relations between
the company and the communities in which it has a
presence or impact. It encompasses programs that
advance the interests of both the company and its
communities, such as donations, employee
volunteerism, and community partnerships. It
involves the impact of the operational activities of
the company on its communities as well as programs
established to develop relationships with groups and
organizations in communities." |
|
| Corporate
Relations/Partnership Policy |
| A well-planned, mission-based document to help
guide an organization in its partnership decisions.
Some nonprofit organizations have taken the time to
develop and adopt such policies to help them respond
to requests from companies or to assist in
proactively seeking out partners to help further
their mission. These policies may include
principles, criteria, minimum financial requirements
and pricing models, and a process for internal
decision making. To see samples shared by various
organizations, please visit our Sample
Policies & Guidelines section. |
|
| Disclosure/Transparency |
| The obligation of nonprofit organizations and
corporations that serve the public to maintain open
communications and engender the trust of their
stakeholders. In the context of corporate-nonprofit
partnerships, the link and relationship between the
nonprofit organization and the commercial entity
should be clearly disclosed. While there is broad
support for the concept of disclosure, there is current debate in
the field over how and how much of the partnership
details must be included in advertising and product
packaging and what serves the public most
effectively. |
|
| Employee
Involvement |
| A broad category of collaborations between
companies and nonprofits that harness the valuable
network of employee interests, talent, and financial
resources to create value for nonprofit
organizations. Employee volunteer programs,
workplace giving campaigns, employee-driven
contributions models, matching gifts, board member
training, and other strategies for involving
employees in the community fall under this broad
category.
|
| For Example |
| The Home Depot organizes
employee volunteers to help KaBOOM!, a nonprofit
organization that works with communities to build
safe playgrounds. Through this program, The Home
Depot builds strong relationships with communities,
teaches employees construction skills, and gives
hands-on experience using tools the store carries. |
|
| Endorsement |
| The express approval or support of a product or
service, typically conveyed through advertising or a
statement of endorsement on the product packaging.
The Federal
Trade Commission guidelines for use of
endorsements and testimonials in advertising define
an endorsement as any advertising message that
consumers are likely to believe reflects the
opinion, belief, findings, or experience of a party
other than the sponsoring advertiser. According to
the FTC this includes any verbal statements,
demonstrations, or depictions of the name,
signature, or seal of an organization. The FTC also
identifies a type of endorsements called
"expert endorsements," which
must be supported by an evaluation or testing of the
endorsed product.
Some nonprofits have long-standing policies
against endorsing any company, product, or service,
but still may license use of their logo to a company
in exchange for payment or a portion of the sales
when there is a benefit to their stakeholders or
cause. Sometimes this arrangement includes the
opportunity to distribute educational information
along with the product. The issue of what
constitutes an endorsement continues to be discussed
and debated by the IRS, state attorneys general, and
by the nonprofit community. |
|
| Event Marketing |
| Promotional activities specifically designed
around an event to raise awareness or funds for a
cause or to promote a company or product. An example
is the Avon Breast Cancer 3-Days event that promotes
awareness of breast cancer and raises funds for
breast cancer research. |
|
| Exclusivity |
| An exclusive arrangement between partners
prevents any similar arrangements with other
organizations. Many nonprofit organizations have
long-standing policies not to engage in exclusive
partnerships. Some may make an exception to allow
exclusivity for a specific activity for a specific
period of time within a specific product/industry
category. The National Health Council's
guidelines,
for example, advise against exclusive arrangements,
unless there is sufficient benefit to the health
organization and the public. |
|
| Licensing |
| An agreement in which a nonprofit's name is
attached to a product. Typically, a nonprofit
licenses a company to develop, produce, market
and/or distribute a mission-related product that is
promoted either with the organization's brand name
or co-branded with both the company's and
nonprofit's names. Another kind of licensing
partnership occurs when a nonprofit grants use of
its information or knowledge. |
|
National
Charities Information Bureau and
CharitableWay.com have struck a partnership whereby
NCIB provides its Standards of Philanthropy
summaries and reports on national charities as well
as information about how to give wisely on a
licensed basis to Charitableway.com. |
|
| Marketing |
| The American Marketing Association's definition of
marketing is "the process of planning and
executing the conception, pricing, promotion, and
distribution of ideas, goods, and services to create
exchanges that satisfy individual and organizational
goals." |
|
| Message Promotion |
| An alliance in which a nonprofit organization
works with a company or media outlet to promote a
public interest message. |
|
The Kaiser
Family Foundation has formed "Following
ER," a unique partnership with WBAL-TV, Johns
Hopkins School of Public Health, and the NBC
television drama ER. The partners produce an
informative 90-second health news segment that
further explains a health issue portrayed in the
weekly television drama. Through "Following
ER," entertainment television is used as the
driving force behind a multimedia initiative that
links scientific information and community resources
to educate and motivate viewers to take action on a
series of personal and public health topics. |
|
| Minimum Guarantee |
| A minimum guaranteed return is sometimes
stipulated in a partnership agreement whereby a
partner agrees to pay a specific minimum dollar
figure, regardless of the actual result of the
program. In a cause-related marketing
sales promotion a company may guarantee a minimum
revenue amount, paid as a percentage of profits
earned from the sales generated during the time of
the promotion, with the corporate contributions or
community relations budget backing up the minimum
guarantee if sales are not as high as expected. Some
nonprofit organizations have developed policies on
the minimum guarantee that must be offered by a
company in order to consider a promotional
arrangement. |
|
|
| Naming Rights |
| Applying a company's name or brand to a program,
venue or facility based on an agreed-upon
arrangement; for example, Mattel Children's Hospital
at UCLA. |
|
| Operations/Social
Enterprise |
| A broad range of activities that improve a company's
or nonprofit's core business operations, such as building
unique supply or distribution channels. |
|
Boeing
purchases sheet metal supplies from Pioneer Human
Services, a nonprofit organization that trains and
employs ex-offenders and former substance abusers.
Boeing receives top-quality supplies for its planes
along with an enhanced corporate community
involvement, and Pioneer Human Services harnesses
employment opportunities for its workforce and earns
revenue from this sustainable social enterprise. |
|
|
|
| Philanthropy |
| Philanthropy is a cash or product gift to a
charitable cause with no expectation of receiving
services, products, or specific recognition in
return. Companies are increasingly making their
contributions decisions with business goals in mind.
Some people use the terms philanthropy, altruistic
philanthropy or traditional philanthropy to
differentiate the contributions made with no
specific business purpose from strategic
philanthropy, focused philanthropy, or corporate
social investing, which is designed to achieve a
business purpose. While a grantmaking partnership
may not be as dynamic or deep as other multi-faceted
partnerships, the corporate grantmaker and the
nonprofit grantee each deliver something of value to
each other. |
|
| Point of Sale/Point of
Purchase |
| A promotional item, such as a poster,
free-standing display or counter-top presentation
(for cards, flyers, brochures, etc.) often used to
display and promote an activity, service or product
in a retail or consumer service environment.
For example, American
Cancer Society's arrangement with SmithKline
Beecham Consumer Healthcare included distribution of
free educational material, written by American
Cancer Society experts, on effective ways to stop
smoking, placed near the product display of smoking
cessation products in drugstores. |
|
| Premiums |
| Promotional items, products or apparel designed
specifically to coincide with an event or promotion
either to be given as incentives or purchased. An
example is National Public Radio/Starbuck's
co-branded CDs that are given as premiums for new
and renewing memberships. |
|
| Product Donation |
| A contribution in the form of a service or
product. Some partnerships include a product
donation to the nonprofit organization. Pfizer's
Sharing the Care program works with the National
Governors' Association and the National Association
of Community Health Centers to make Pfizer's
medications available at no charge to uninsured
patients at more than 350 community health centers
across America. |
|
| Property |
| A term used to communicate the sponsorship
opportunity available, such as an event, a program,
a website, or other specific project. |
|
| Public-Private Partnership |
| A collaboration that includes a public-sector
government agency and a private-sector organization
or company—either for-profit, nonprofit or both—working together to solve a community problem or
create social change. Many public-private
partnerships include several nonprofit
organizations, companies, and government agencies at
the local, state, or federal levels. |
|
| Qualified
Sponsorship Payment |
| A "safe harbor" created by Congress in
1997 for charities that wish to acknowledge their
business sponsors without being liable for UBIT
(Unrelated Business Income Tax). Previously,
acknowledgment of the business donor was problematic
because the IRS could consider it as advertising,
and thus require the nonprofit to pay UBIT. |
|
| Reputation/Reputation
Management |
| According to Walker Information, a leading
reputation research and management firm,
"reputation is the reflection of an
organization over time as seen through the eyes of
its stakeholders and expressed through their
thoughts, words, and actions. Reputation is the
context in which stakeholders judge a company's
actions." The practice of reputation management
and measurement is a growing trend in the corporate
community. |
|
| Segmentation |
| A selection process that divides the broad
consuming market into manageable groups with common
characteristics. Segmentation enables companies and
nonprofits to target specific shared audiences and
leverage the common characteristics of the segment
in their marketing efforts. |
|
| Self-Canceling Proposition |
A term some use to refer to corporate partnerships
that provide funds to a nonprofit organization but,
in some people's minds, negate the value of the
funds due to the negative brand impact of the source
of funds. For example, a school that accepts funds
from a tobacco company may suffer negative publicity
and backlash from parents that negatively outweigh
the strengths of the program supported. Nonprofit
organizations should consider the impact on their
brand and ensure that any partnerships they
undertake are compatible with the overall mission of
the organization.
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|
| Sponsorship |
| A broad term that covers many kinds of
business-nonprofit relationships from financial to
in-kind operational support. Nonprofit organizations
can create innovative sponsorship opportunities of
many different kinds to engage additional corporate
partners, reach wider audiences, increase financial
support, or build operational and strategic
capacity. Many levels and types of sponsorship are
often developed to create opportunities at various
financial or in-kind contribution levels. |
|
A Media Sponsor typically offers publicity
support, a Sole Sponsor takes on the entire
sponsorship responsibility, and a Title Sponsor is
one whose name typically appears within the name of
the event or product. The key is to have clearly
defined responsibilities, often in a written
agreement, and policies that ensure a sponsorship is consistent with the company's and
the nonprofit's mission, business strategy and
brand. |
|
| Social Entrepreneurship |
| According to Greg Dees in "The Meaning of
Social Entrepreneurship," social entrepreneurs
are leaders who play the role of change agents by
adopting a mission to create and sustain social
value; recognizing and relentlessly pursuing new
opportunities to serve that mission; engaging in a
process of continuous innovation and learning;
acting boldly without being limited by resources
currently in hand; and exhibiting a heightened sense
of accountability to the constituencies served and
for the outcomes created. Social entrepreneurism may
be demonstrated by nonprofit organizations as well
as for-profit businesses with an underlying social
purpose. |
|
| Social Marketing |
| Social marketing is the planning and
implementation of programs designed to bring about
social change using concepts from commercial
marketing. |
|
The American Cancer
Society's and other health care organizations'
efforts to reduce smoking have used social marketing
tools to change behavior. Some corporate-nonprofit
partnerships are formed to collaborate on social
marketing initiatives. |
|
| Stakeholders |
| The constituencies served or affected by an
organization or company, including clients,
customers, donors, employees, shareholders,
neighbors, suppliers, distributors, partners, and
government officials. |
|
| Strategic Alliance |
| A term to cover a broad range of collaborations in
which partners combine their core competencies to
accomplish social change and meet business
objectives. Strategic alliances are unique in that
they tend to be long-term, highly dynamic,
multi-faced, and key to the partners' individual
success. The partners often develop shared strategy
and rely heavily on each other to meet their
business or mission goals. |
|
| Unrelated
Business Income Tax (UBIT) |
| Taxes paid by a nonprofit organization on income
earned from activities unrelated to its original
tax-exempt purpose or mission. The Internal Revenue
Code says that if an exempt organization regularly
carries on a trade or business that is not
substantially related to its exempt purpose except
that it provides funds to carry out that purpose,
the organization is subject to tax on its income
from that unrelated trade or business. To be subject
to UBIT, the nonprofits' activities must be
significant and ongoing. Nonprofit organizations
need to be aware of any tax implications that may
arise from corporate partnerships and should plan
these expenses into the partnership arrangements.
For more information, visit the Tax
and Legal section of the Mission & Market
Resource Center. |
|
| Venture
Philanthropy |
| A fast-growing, highly diverse, and sometimes
controversial movement that seeks to apply some of
the techniques of venture capitalism to the
nonprofit world. In the venture philanthropy model,
an individual philanthropist or corporate or private
foundation often develops long-term, close
relationships with its nonprofit partners, much like
a venture capitalist would do. The venture
philanthropist may help the nonprofit build a
strategic plan, make community contacts, conduct
social enterprise that generates sustainable
revenues, and serve on the board, while holding the nonprofit organization
accountable to meet its deliverables. |
|
| Employee Volunteer Programs |
| Many companies encourage employees to volunteer in
the community as part of their human resource and
community affairs strategies. In a growing trend,
companies are developing employee volunteer programs
that support their recruitment and retention,
training, and executive development needs. Some
companies have recently devoted additional staff
resources to match employees with nonprofits that
fill their interests, developed computerized
databases of volunteer opportunities to enable
employees to explore current needs, and even paid
for television advertising that promotes its
community service activities. |
|
An example of a
multi-faced employee volunteer program is LensCrafters' Give the Gift of Sight program, which
enables employees of the optical retailer to
volunteer on a short-term basis and then move up the
community service "career ladder" to
become a team leader, a Vision Van leader, or a
international mission volunteer. In partnership with
Lions Clubs International, the program also includes
a customer involvement component in which customers
are invited to donate their used eyeglasses for
cleaning, repair and distribution in developing
countries. |
|
| Workplace Giving
Campaign |
| Many corporations work with nonprofit
organizations to encourage employees to contribute
to charitable causes. Companies often support these
efforts through matching gifts, payroll deductions,
and educational materials or events. Companies are
increasingly tying this employee involvement program
to their broader community affairs, employee
volunteer, and philanthropy programs. |
|
| To add comments on the above discussion or suggest
other terms you would like to see addressed, email
your recommendations to patricia@IndependentSector.org. |
|
|
Copyright ©
2004 Independent Sector. All Rights Reserved.
