Answer
a) An example of businesses working together with nonprofits include Feeding America, where consumer packaged goods manufacturers like ConAgra, and retailers like Target, team up to assist local food shelves. Other examples are: General Mills and Xerces working together to restore pollinator habitat, and Kia Motors America’s partnership with DonorsChoose.org to get resources into school classrooms.
b) Adam Smith believed in the power of incentives to direct and motivate behavior in the marketplace. To his 1776-mindset, money was the dominant incentive. Since then, we’ve seen evidence that other incentives also drive behavior. ‘Giving back to the community’ is among these incentives. In fact, the younger the worker, the more likely he or she wants to do something to “give back” and “make the world a better place” through their work life. Brands that understand the customers’ desire for emotional engagement with purchases can ‘do well by doing good’.
Work Step by Step
Two trends jump out as further evidence of the power of profit-nonprofit collaboration: social entrepreneurship and cause marketing. Both trends are growing: As of mid-2016, more than 1,700 Certified B Corporations exist in 50 countries, according to the Harvard Business Review. A ‘B’ corporation is a new organizational form that emphasizes ‘triple-bottom line’ thinking to recognize the value created for non-shareholding stakeholders, such as employees, the community and the environment.
Similarly, marketing that supports a cause has grown from $700 million in 2000 to 2.0 billion in 2016 in North America, according to the latest IEG Sponsorship Report. A company’s support for a social purpose has been found to differentiate its products, and according to the 2010 Edelman GoodPurpose Survey, social purpose is the number one factor when deciding to buy if price and quality are equivalent. One example of profit-nonprofit cooperation is buy-one, give-one campaigns pairing a product donation to someone less fortunate with every purchase. Toms Shoes and Warby Parker eye wear both use this strategy to earn new customers, and do a lot of good in the process.
