COVID-19: Crisis and Growth Opportunities for Profit-Purpose Partnerships
As of March 11, the CDC officially declared COVID-19 a global pandemic. Whether we are working from home, postponing events, attending online classes at college, or stocking up on toilet paper and hand sanitizer, we are all feeling the side effects of the coronavirus in our daily life and work.
- Over 170,000 confirmed cases of coronavirus globally1
- 6,687 deaths from coronavirus1
- 133/195 countries infected
- 290 million children have been impacted by school closures around the world2
- 3,628 people diagnosed, 49 states infected and 63 deaths in the U.S. alone3
- Bars and restaurants are mandated to close in several states across the U.S.
- MLS, NHL, and the MBA have suspended their seasons
- Broadway has gone dark
This….is our new normal.
While COVID-19 may seem like more of an annoyance to some than the Pandemic it is, what we find most interesting is its role on the economy, and the effects that an inevitable recession will have on profit-purpose partnerships.
The deepening coronavirus crisis sent stocks into another landslide on Wall Street last Thursday, triggering a brief, automatic shutdown in trading for the second time last week.
As of March 11, The Dow Jones Industrial Average was down about 1,800 points, or nearly 8%, at midmorning, while the broader S&P 500 was off 6.2%. This is a result of the cascade of cancellations and shutdowns across the globe, an oil pricing war between Russia and Saudi Arabia, and rising worries that the Government and other authorities around the world can’t help the weakening economy any time soon.
“This is bad. The worst and fastest stock market correction in our career,” Chris Rupkey, chief financial economist at MUFG Union, said in a research overnight. “The economy is doomed to recession if the country stops working and takes the next 30 days off. The stock market knows it. Bet on it.”
Although most buzz is around COVID-19, it is just one of many other contributing factors (like bubbles European real estate, US stocks, US household wealth, corporate debt, leveraged loans, US student loans, US auto loans and shale energy) to a predicted and fairly inevitable recession of 2020.
While Broadway might be dark for now, the show must go on for nonprofits in North America and around the world. From the aging population, to the homeless, from refugees to those with compromised immune systems, the cornonavirus is most greatly impacting the world’s most vulnerable – those who nonprofits serve and support on any average day. Times like these – those of crisis, natural disaster and recession – are often when communities need nonprofit services the most. Yet, fundraising seems more difficult and maybe even uncomfortable to pursue.
However, corporate America has gained a reputation for stepping up during dark times, and the last week has been no exception. As reported by David Hessekiel in Forbes last week, Amazon has pledged over $5 million to support small businesses in Seattle impacted by COVID-19, Zoom is offering free video conferencing to K-12 schools around the world, and Facebook, Mastercard and Apple are donating over $160 million collectively to support relief efforts. Other brands including Walt Disney World Resort, Seamless, GrubHub, Enterprise Rent-a-Car, Lush, Lyft, Uber, Walmart, Postmates, CVS Pharmacy, Aetna, Wells Fargo, and Olive Garden have all pledged varying support for the communities (and nonprofits that support these communities) impacted by the coronavirus.
If you are a fundraiser, you’ve undoubtedly already felt the short-term effects of COVID-19. You’ve experienced cancelled or postponed fundraising events, paused prospect conversations and potentially witnessed a diversion of funds to emergency relief momentarily. Industry experts like Charity Dynamics and The Partnership Conference’s Chris Baylis have offered wonderful checklists and advice on how to triage the most immediate fundraising dilemmas, but we anticipate you will witness a ripple effect for the next 24 months.
In every crisis lies the seed of opportunity. – Chinese Proverb
Being prepared for immediate action and visionary planning now will dictate the success of your corporate partnership program over the next two years. The impact of the coronavirus and the failing economy will impact your team, your existing partnerships and those companies you wish to build relationships with. To help you navigate the murky waters, we’ve developed a simple roadmap (Accelerist’s Profit-Purpose Partnerships: In Crisis & Growth Roadmap) that helps you approach short-term partnership triage, and uncover opportunities to reinvigorate your approach to corporate partnerships for the long-term – despite an uncertain path forward. We’ve dissected the crisis impact on, and opportunities for profit-purpose partnerships over the next 6, 12, 18 and 24 months. Of most immediate concern is what life looks like over the next six months.
What Do We Do In the Short-Term?
This is the time for deliberate action, consistent communication and focused team efforts.
With social distancing becoming more widespread throughout the U.S., it’s likely your team is working remotely. With economic uncertainty, school closers, and the need to strike a balance between work and life now that they are closely intertwined, anxiety levels are likely at an all-time high. Your team may feel disconnected and distracted – and reasonably so. Our remedy?
- Host more frequent team calls
- Use your video conference solutions for every discussion, if possible
- Leverage digital team communication tools, like Slack, to check-in on your team individually, or offer a bit of comic relief and inspirational quotes
- Be clear and communicative around short-term goals and plans for triage – even if your plan is unknown at the moment
- Empower team members to collaborate within sub-teams to find solutions and conquer challenges
Your existing supporters already are invested in your mission and believe in the work you’re doing. In time of crisis, it’s important to consistently communicate how your organization is responding to the coronavirus, and what you need in order to accomplish it. In these times, restricted asks and donations are necessary. We recommend you:
- Craft a “Solutions & Needs” document for your existing partners. We’ve provided a quick template, with examples, of one for you to use here.
- Schedule and host a partner virtual roundtable within the next 7-14 days. Check out these best practices for hosting a roundtable successfully.
- Follow up with your partners 1x/week following the roundtable to report on progress, impact, and the use of any additional funds they committed.
As you all know, each partnership is created differently. Source of funding can come from the corporation’s own budget, its employees or consumers. Due to complete city lockdowns, social distancing and a volatile stock market, companies may begin to adjust how they will activate their own assets to support existing nonprofit partners. Traditional consumer-based fundraising mechanisms may suffer from the lack of physical traffic. We recommend:
- You host 1×1 partner meetings over the next 7 days with campaigns and/or partnerships happening in the marketplace within the next 6 months.
- Discuss with your partners their level of planned participation and support, and if there are any opportunities for postponement or delayed activation available.
- Reset expectations with leadership about anticipated funds raised, and whether you plan to supplement revenue or not.
Since many of your own “assets”, like events or in-person activations, will or have been postponed, the value you’ve committed to offering your partners may be compromised. While partners can be understanding in times of crisis, they also need to justify their investments and you still need to support your relationships. We encourage you to be proactive by developing an “Asset Contingency Plan”. We’ve created a template for you here, but you can also develop your own by considering:
- Which assets have been agreed to?
- Which are being postponed, and does this still appeal to the partner?
- Which assets are simply unavailable now?
- Which assets can you leverage or create that you haven’t before to supplement loss of value?
It may seem counterintuitive to look for new partners during a time of national (and global) emergency, but it could also provide interesting opportunities for partnerships with new or different industries you haven’t yet considered. Either way, nonprofits should focus any new business efforts on restricted funding opportunities to support their response to the pandemic, and target industries that are witnessing immediate growth.
According to Yahoo Finance, Zoom, the video conferencing software solution, stock price is up over 20% over the last 30 days due to the growing remote working mandates. Teladoc, a telemedicine platform that lets doctors connect with their patients remotely, saw their paid subscriptions soar by 61% in the 4th quarter of 2019, and are expected at least 32% increase in revenue this quarter (when compared to Q1 of 2019). And, with more people homebound, Netflix has witnessed a stock bump, while markets plummeted over the past week. “Netflix is an obvious beneficiary if consumers stay home due to coronavirus (COVID-19 virus) concerns, and this has been reflected in considerable stock price outperformance this week,” BMO Capital Market analyst Dan Salmon wrote in a research note, reports Variety. Other industries to consider for strategic prospecting during crisis and recession are:
- Digital Telecommunications
- Consumer Staples
- Convenience Stores
- Healthcare & Pharmaceutical
- Discount Chains
- Auto and Home Repair
Our world is changing rapidly. Every day is different, and I personally think we are all doing very well at adjusting so quickly. Navigating sensitive subjects and timelines within our own families, co-workers and supporters is difficult – often with no easy or “right” answer. We hope some of these recommendations will help nonprofit organizations move through the challenges ahead with confidence and grace. We will be publishing more tools and resources in the coming weeks to support your more mid- and long-term approach to Profit-Purpose Partnerships.
In the meantime, the work you do is so important. Please don’t lose sight of it. Stay Healthy. Stay Positive. Just…Stay In It!
- NCOV2019.live, as of March 16, 2020
- Statista, March 11, 2020
- National Institute of Allergy and Infectious Diseases, March 11, 2020