For the current crop of startups, it’s not just about creating the next big thing: Making an impact on the world is just as critical.
That’s why startup partnerships with nonprofit organizations are now more important than ever, and new opportunities are popping up every day. For instance, while malaria used to be the primary public health concern in Africa, GeekWire has reported that cancer may now be the continent’s biggest health threat, according to recent data.
To combat this, Seattle nonprofit BIO Ventures for Global Health partnered in June with the African Organisation for Research and Training in Cancer, to create the African Access Initiative. The Initiative will bring in pharmaceutical and biotech companies, such as Pfizer and Takeda, to aid in the fight against cancer.
In a perfect world, a union between a startup and a nonprofit will always make sense. Complementary resources and common goals will also surely help, while timing is just as big a factor.
Timing Is everything.
From the moment it opens its doors, a startup is running on borrowed time. Research by Statistic Brain has pointed to data showing that 25 percent of startups fail within the first year, 36 percent falter after two and 55 percent are dead by the end of year five.
Needless to say, then, every day counts for all young companies, including those that partner with nonprofits. The timing of any partnership must be strategic and help both sides get the most out of the union.
What do you see the fruits of your labor looking like a month from now? How about six months — or years– from now? Decide what success looks like now, and work toward creating the change your partnership hopes to see.
Through my company’s partnership with the Clinton Global Initiative and the China Association for Integrative Medicine, we’re providing monthly training sessions throughout China to teach locals how to tend to burn victims. The sessions provide immediate training and assistance in the communities that need it, while also building a long-term system of burn specialists who can service their chosen areas and serve as ambassadors for the company’s joint venture and its chosen charitable organization.
Deliberate timing is vital for both sides of a startup-nonprofit partnership. It ensures that each can pull its own weight and operate at a high frequency.
Taking the plunge With a nonprofit
Thirty percent of respondents in the Statistic Brain study cited “unbalanced experience or lack of managerial experience” as a reason for startup failure; and one of the subcategory reasons was too-rapid expansion, which occurs in a partnership when one or both partners are not ready. This is why it’s so important to evaluate your company’s financial and structural status to make sure your startup is healthy enough to join hands with a nonprofit.
Assuming you’ve found that perfect nonprofit, here are three questions to ask yourself to make sure the timing is right:
1. Where do we stand financially? Take the temperature of most failed startups, and you’ll find that finances played a hand in a good chunk of their respective downfalls. Forty-six percent of the Statistic Brain respondents listed “incompetence” as the reason for startup failures, with reasons such as “emotional pricing” and lack of knowledge in pricing and finances named as factors.
When entering any partnership — especially one involving a nonprofit — ensure that your finances can stand up. Determine whether you’re on solid enough ground to donate both time and your young company’s scant financial resources. The point of that donation: to help a nonprofit that may also be trying to make its mark but is not as focused as you are, on finances.
2. Are we structurally sound? Money is one factor, albeit an important one, for determining how ready your startup is for a nonprofit teammate. But what about the other aspects of your company’s health? In other words, do you have the personnel, work capacity and other support in place to make sure both parties benefit from this union?
Be strategic when entering a partnership, and make sure your company is equipped to handle the load. Strategic timing helps companies understand how a partnership could contribute to both organizations’ health, in terms of size and scalability. For example, a small startup collaborating with a large nonprofit could find itself disregarded by others in the space despite heavy contributions to the partnership. This is especially true if the nonprofit’s mission isn’t updated to reflect the partnership’s new objectives.
3. Do both brands look good to the public? Strategic timing is crucial, but don’t ignore circumstantial timing, which isn’t controlled by individuals and companies, but instead by public opinion. Ensure that your company and its potential nonprofit partner have solid public images so that a bad press story or a single indiscretion won’t cast a poor light on your brand or its efforts.
Once that’s determined, figure out where your respective brands complement each other. Brand alignment is key for building partnerships, so understand how your mission coincides with that of your potential nonprofit partner. To understand how you can help, understand the needs of your preferred nonprofits and identify gaps in their assistance.
Still unsure about the goal you want to focus on? Check the U.N.’s website and review its 17 sustainable development goals to see whether one fits with your company’s current mission statement. From there, perform an internal review to see how your partnership could take advantage of existing infrastructures. Pursuing relevant, timely causes will help ensure that your efforts go to those which need it most and that your startup makes the most of its limited time and resources.
A startup/nonprofit partnership can be great for all parties involved, but it must be initiated at the right time. Ask the questions that get to the core of what your company — and its potential philanthropic partner — represent in order to determine whether now is the time to make things official.