Have you ever wondered why some charities seem to be “better” at corporate fundraising than others? Do you wish you felt more confident competing in the overcrowded corporate partnerships marketplace? In this blog I will explore one way in which you can make your charity stand out from the rest.

The iPhone 7 launches this month. At the time of writing, it is available to pre-order. It is likely to sell out on the day of release and there will probably be pictures of people queuing outside the Apple Store wanting to get theirs on the first day possible. Apple understands the benefits of supply and demand. If they wanted to, the company could easily make enough handsets to meet the demand on the day of release but this would mean that there wouldn’t be the same “buzz” and iPhones would become just another choice to mobile phone buyers everywhere.

I have an iPhone 6 and I’ve been targeted with a lot of advertising telling me to sell it as soon as possible as the re-sale value is predicted to fall by 20% just eight weeks after the iPhone 7 is launched. Certain consumers (like me) are being conditioned to want the latest Apple product while I am being told, at the same time, that the existing product that I have had for less than 18months is already losing value. This kind of marketing doesn’t work for everyone. Some people are happy to stick with the same, reliable phone that they’ve had for years.

Apple knows that its marketing doesn’t need to work for everyone. In order to keep “the buzz” (and its prices) high, it simply needs to ensure that demand for its products outstrips the company’s supply. The same theory applies to charity-corporate partnerships.

 

A few years ago I was hired by a well-known charity to help them secure higher-value and more strategic corporate partners. Historically, the team had raised several million pounds every year from a group of over thirty corporate partners, the majority of which were consistently raising five-figure sums on an annual basis. A lot of organisations saw the team as highly successful however I had been hired because the team’s new leader had other ideas. She could see that, in comparison with similar charity brands, the team was punching below its weight and she knew how to change this.

Her strategy was to reduce the number of partners managed by the team whilst increasing the income that the team raised and insisting that each corporate partner contractually committed to give a minimum of six-figure sums each year. Her forecasts promised that, through making this change, the team would deliver an increase of 33% income every year for the following five years. To some, her strategy made no sense; they were being asked to give reliable, long-term partnerships to another team. For me, her strategy was exciting and highly motivating; I could see she understood the principles of supply and demand.

 

According to the Charity Commission, there are currently over 160,000 charities in the UK (although some have argued that there could be over 400,000). If a company wants to use a charity’s brand to gain all of the benefits associated with charity partnerships then it is unlikely that they will struggle to find a charity that will agree to the terms that they are looking for; supply far outstrips demand.

Knowing this, it was evident that in order to implement the new strategy, the team could no longer operate in the traditional charity market. Trying to compete with upwards of 160,000 other organisations would mean that it would be very difficult to insist on a six-figure financial guarantee in exchange for the use of the charity’s logo when other charities would give theirs away for free. The charity needed to create a new market.

In order to create a new market, it was necessary to identify the charity’s unique selling point. I needed to find at least one thing that no other organisation could offer. In this case, the charity had such a strong brand, and did so much great charitable work, that there were lots of things that made it unique. One such opportunity was a mass fundraising event that took place every year; it was the biggest of its kind and it had been running for years.

The event had loyal sponsors who showed support for the event in a variety of ways. One was a company that provided all of the bottled water for the event at cost price, saving the charity thousands of pounds against market value. In exchange, the company was allowed to promote the partnership on its packaging and was given branding at over 300 events. When the partnership was initially formed, this felt like a fantastic, mutually beneficial partnership. The charity received something that it legally had to supply for free at a price it could not achieve on the open market whilst the company received positive brand exposure and association with a much-loved event.

The partnership was renewed every three years and, in the year that I was hired, the contract was up for renewal. The new strategy dictated that we would no longer give the charity’s brand away to a company that was not paying for it. This was a great opportunity to put the new strategy into practice.

In order to make more money from the event’s water sponsor I only needed interest from one company that was willing to pay more for association with the event than the charity’s existing partner. I started approaching all of the major drinks suppliers in the country. It became evident that several suppliers would provide the water for free, rather than charging cost price, as they recognised the positive exposure that this “sampling opportunity” would provide for their brand. I therefore knew that this would be the minimum that I would accept from our current partner if they wanted to renew their contract. The next challenge was to find a partner who would pay for association with the event in addition to giving us the water for free and, to cut a long story short, I found one. Just one…but that is all we needed in order to renegotiate with the existing partner. The beauty of this strategy is that your product or service does not have to appeal to everyone; demand simply needs to outstrip supply.

Negotiations with the new company continued to the point that we were all happy to walk away from the existing sponsor and an email was sent officially terminating our contract. The existing partner realised that another company valued what we were offering so highly that they were willing to pay more for it and came back with a counteroffer; they were willing to provide the water for free and pay a sponsorship fee for the association. After some negotiation, the offer was accepted. Applying the supply and demand principle meant that the charity was able to realise the true commercial value of the benefits it had previously been giving away for free.

 

The supply and demand theory is one that I have applied time and time again to create mutually beneficial partnerships between companies and charities. You can read another case study of how I have applied it successfully here.

If you have ambitious plans for your corporate fundraising team, then here is my five step summary for putting the supply and demand theory into practice:

This is not the only way of making your charity stand out from the crowd or raise the most money possible but these five steps will be a great starting point if you want to implement a supply and demand strategy.

If you would like to discuss this with me further, please do find me on Twitter (@MsMandyJ) and/or send me an invitation telling me why you’d like to connect on LinkedIn. I look forward to hearing from you and wish you the best of luck with your fundraising.