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Why — and How — Nonprofits Should Build Ties With Startups

By  Kyle Mitnick
November 8, 2023
Businesswoman leader Lead a team of female staff towards the gleaming keyhole on the large red wall. Ideas for future business opportunities and challenges. isometric vector illustration.
Getty Images

Nonprofits often try to think outside the box when raising money, launching innovative campaigns and engaging with potential supporters from outside the traditional base of donors. But many overlook startup companies, which are tremendous, untapped sources of long-term relationships and revenue.

And that is understandable: The past two years have been rough on privately held companies and many investors. Valuations and investments have dropped off steeply. The IPO market is limping along. Companies have cut back on staff and on many of the perks they use to attract employees. Many startups have even closed their doors for good in the economic downturn.

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Nonprofits often try to think outside the box when raising money, launching innovative campaigns and engaging with potential supporters from outside the traditional base of donors. But many overlook startup companies, which are tremendous, untapped sources of long-term relationships and revenue.

And that is understandable: The past two years have been rough on privately held companies and many investors. Valuations and investments have dropped off steeply. The IPO market is limping along. Companies have cut back on staff and on many of the perks they use to attract employees. Many startups have even closed their doors for good in the economic downturn.

For these reasons, many nonprofits may consider small companies a less-than-ideal source for donations. But they would be wrong.

Startups — largely launched and staffed by younger workers — can be an ideal fit for nonprofits. Founders and employees of these companies are an excellent demographic to focus on, as they often put a higher value on social good than previous generations did. Those who cannot donate money often can donate their time.

As a startup company grows, its team will build up a philanthropic routine, contributing on a recurring basis, whether money or time. Startup founders know that today they must show a social conscience or risk losing their best talent to other organizations. Turning giving into a routine is a way to keep those workers.

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For nonprofits, broadening sources of revenue from wealthy individuals to growing businesses is the mark of a well-diversified approach — and can bring both elbow grease and capital infusions for years to come. And what one startup does, others are sure to replicate.

It’s hard-wired in the startup ethos to do whatever possible to make the world a better place. For today’s young workers, delivering meals to people who need them or cleaning up polluted areas is the ultimate team-building exercise.

How can your nonprofit approach startup companies and get them involved in your worthy cause? As a founder of several successful startups and a charitable donor myself, I offer several tips to help you:

Target C-level executives and owners. Creating basic marketing copy around the benefits of giving for startups is easy to do, and it’s almost always well received. While directors mainly see costs, founders and most executives understand that philanthropy is an investment in human capital, longevity, and workplace connection. Find these individuals through research on publications like Crunchbase and PitchBook, which are daily reads for founders, venture capitalists, and the whole startup ecosystem.

To get good results, send an email educating founders and owners on similar businesses that have worked with your nonprofit in the recent past, including press, images, and goals for their contribution. Close by asking what types of team-building events the business has planned for the rest of the quarter. This is a great way to get the ball rolling.

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Ask for donations of time, not necessarily money. The downturn for startup companies is nearing historic proportions. Many are hoarding their money as a basic survival tactic. At the same time, employees are still looking to bond outside the office and feel like they are a part of something greater than themselves. Volunteering offers a way to do that.

Find a “champion” company and spread the word. Once your organization has engaged a roster of startups, or even a single company, use the positive experience that the employees undoubtedly had to attract other businesses.

You can create a simple, co-branded campaign with the startup, so that both organizations can tell the story of the engagement together. That story can then become a powerful magnet for other businesses. At Advertise Purple, a marketing agency I founded and used to lead, we would share the spotlight with nonprofit partners before or after events we supported, such as by posting a summary on our website with quotes, links, and calls to action from the charity.

Frame volunteering as an opportunity for corporate bonding, not just giving. Companies spend tens of thousands of dollars on outings to increase employee engagement. Show how getting involved with your cause can allow teammates to build genuine bonds in a way that other activities can’t.

For example, Advertise Purple participated in a beach cleanup event as a team, where executives were paired with new hires and departments worked together. The experience provided a spectacular opportunity for employees to meet others at the company, share stories, and collaborate for a positive outcome unrelated to work.

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Emphasize the potential to help change people’s lives. The desire to help others and make the world a kinder, more equitable place is at the heart of many startup companies. Founders are idealists, and as a nonprofit, you can offer a way to put those ideals into action.

Startups have had a turbulent time in the economic downturn, but many will pull through the bear market and emerge as strong, profitable businesses — the kind nonprofits are looking to engage. Before they do, there’s a chance to start building ties with them. By seeking their time — not their precious capital — you can cement a relationship that will pay dividends for many years to come.

We welcome your thoughts and questions about this article. Please email the editors or submit a letter for publication.
Corporate SupportFundraising LeadershipExecutive Leadership
Kyle Mitnick
Kyle Mitnick is CEO of Mosaic Digital Systems, a digital marketing software for small businesses. He is the founder and former CEO of Advertise Purple, an affiliate marketing management agency.
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