A Big Year: What’s in Store for Profit-Purpose Partnerships in 2020?
With decades of hype bringing us to this moment, we finally made it here to 2020! Given the rising tide of purpose-driven companies, longstanding nonprofit collaborations and heightened demand by new generations to make the world a better place quickly, 2020 is poised to be a big year for us all in the social impact industry. This is the year, however, that will accelerate profit-purpose partnerships – the volume of them, the sophistication of them, and the impact they can all have on our societies. We will look back on 2020 as the year we embraced the 4th Industrial Revolution, used technology to make Purpose more interactive and personal, and experimented with new and evolved business models. To make it through 2020 successfully, we will need to make our partnerships immune to threats like a potential recession that may flatten corporate budgets and contribute to more turnover, as well as continued sustainability and corporate responsibility reporting pressures. Despite a few challenges, we predict 2020 will be an exciting year – one that will ultimately shape the new frontier for profit-purpose partnerships. In our new 2020 Trend Report: The 20 Things You Need to Know About Profit-Purpose Partnerships, we uncover the top 5 threats facing impact professionals today, the top 5 most active categories giving to causes, industry trends and exciting new brands to watch. We also offer 20 big ideas for partnerships between nonprofits and companies in the new age of Purpose.
Outpacing individual giving 5-to-1, Corporate giving in the U.S. has grown by 15% over the last 2 years, making it a more competitive marketplace for nonprofits to capture corporate funding than ever before. More so, a recent Accelerist study revealed that 78% of legacy brands have seen a decline in overall revenue in the last 12 months, with some having lost 40% of their existing corporate revenue in the last 12 – 24 months. There are many factors contributing to this partnership churn, and while you can’t change things like turnover or stop a recession, you can guide the way your organization reacts to it and become immune to the threats. These are our top five threats to corporate partnerships to keep an eye out for in 2020:
- Cause Refinement
- ESG Pressure
- Looming Recession
So, how do we move forward? In the Golden Age of Purpose, most of us that create profit-purpose partnerships know the basics. Now, we must customize, specialize and elevate our partnerships.
We’ve profiled the top five most active categories supporting cause initiatives right now, according to IEG’s 2019 Cause Sponsorship Report. It’s important to understand how fast these industries are evolving, so that nonprofits can understand how to best build partnerships with them.
The Top 5 Categories Most Likely to Support Causes
- Retail – 4.1x more likely
- Tech – 2.8x more likely
- Professional Services – 2.6x more likely
- Pharmaceutical – 2.5x more likely
- Banking – 2.4x more likely
With the continued influence of automation, AI, Extended Reality (XR) and purpose integration, we’ve offered five big ideas for partnering with each of these industries. Some of the common themes and highlights include:
- Creating Greater Customer (and Employee) Experiences.
Nonprofits have started to adopt VR and AR to help donors understand what it’s like to experience the missions and audiences they support. This VR app was developed by Alzheimer’s Research UK, and guided by people living with different forms of dementia, to help potential donors understand what the symptoms and struggles are. You could also do the same for a corporate partner’s employees as a way to better connect them with your cause directly from the office, or with consumers on the street through an experiential grassroots events sponsored by your corporate partner. In-app sponsor and brand activation is also an interesting and innovative approach to building partnerships with XR.
- Solution-Based Partnerships.
Nonprofits and their leadership must value corporate partnerships beyond philanthropic benefit. When approaching tech companies in 2020, consider options where their technology can become a solution for your mission – this is true social enterprise. Take a look at what ZipRecruiter has done to solve the challenges of veteran employment readiness and access through VeteranPost and its partners, HireVeterans.com, HirePatriots and others.
- Think Differently.
Consumer options across industries are evolving – from autonomous checkout at retail to digital banking and healthcare. Until recently, there were a few ways companies would support nonprofits – grants, employee giving, program underwriting, event sponsorship, POS fundraising or cause marketing. While all of these are still viable and at the core of profit-purpose partnerships, new products and business models are meeting automation and AI to give way to unique partnership opportunities. Nonprofits must think differently about many ways to partner with any industry, know where those industries are headed and present thoughtful options that help companies stay ahead of the curve. (think: encourage consumer donations via AI like Alexa, co-create social enterprise products with companies that solve your mission challenges, offer in-app donation-with-level up purchases.)
In addition to increased activity within traditional sectors like retail and banking, there are many new sub-categories and rising stars that we’re keeping an eye on this year. Their businesses are continuing to grow, they understand the power of purpose, and we expect they will be in the market for first-time, new or extended nonprofit partnerships in 2020.
The Accelerist Industry Watch List:
- Brand Expansions: Traditional brands stepping into new ventures
- Bloomingdales and Urban Outfitters are getting into the reuse/re-wear business
- Wendy’s and Chipotle will continue to grow with their plant-based options
- DTC Retail: Direct-to-consumer brands are the new Cinderella story in retail
Any 2020 Future of Retail list raves about the future of direct-to-consumer and names these brands as the shining stars:
- The RealReal
- Rent the Runway
- Food Delivery: Groceries, dinner, or dessert – food delivery is here to stay
Traditional restaurants are suffering from the impact of food delivery brands like:
- Digital Health: Watch for old and new players in this category
These powerful tools are giving consumers more options, pricing and metrics about our health:
- Men’s Brands: The redefinition of masculinity continues
On the heels of the #MeToo Movement, many male-focused brands are redefining masculinity and finding their purpose. Keep any eye out for moves made by these brands:
In the Chinese Horoscope, 2020 is the year of the Metal Rat. Apparently, this year is to be marked by radical positions and choices. Yet, with any new initiatives taken this year, one must carefully measure the risks to ensure ultimate success. While this may prove to be true for your personal, family or professional life, one thing we’re sure of – 2020 is the year for bold new ways for nonprofits and companies to work together to impact change. Dare to think differently, strive to build partnerships that are solution-oriented, and seek out your new hidden gem of a partner that could be the next big brand.
What radical moves are you making in partnerships for 2020!?