REVEALED: Should Your Nonprofit Require a Minimum Revenue Commitment from Corporate Partners? 📊
The survey results are in on asking corporate partners for a minimum revenue commitment (MRC). There are four parts to this post.
1. The graphs showing the results. I took these right from the Survey Monkey survey my email subscribers completed in July.
2. Two of the three survey questions included a section for comments. There were some great insights from respondents so I’ve included a selection beneath the respective questions.
3. I asked the team at Accelerist, my partner in the survey series (check out the results of our salary survey here), to offer their perspective on minimum revenue commitment based on their additional research on the topic. These insights are very helpful!
4. At the bottom, I give my bottom-line thoughts on minimum revenue commitment. In a hurry? Scroll down to the bottom and see what I have to say!
1. Do you require a minimum revenue commitment (MRC)?
This question had one follow up question:
If you do require a minimum revenue commitment, what is it?
The range for MRC varied widely from $5,000 to $250,000 (not very helpful, right?). But some of the individual responses to this question might be helpful to your organization.
“For our low level Business Ambassador Program, commitment begins at $2,500 - for a corporate partnership with access to our logo the minimum commitment is $25,000. This commitment does not necessarily have to be cash, we would also consider a gift-in-kind value at the same levels.”
“We ask for $25K. However, it doesn't necessarily have to be just revenue, but we look at other factors like earned media, paid media, possible in kind values, etc. as part of the overall partnership.”
“It depends, our base level for a partner to be in one of our giving programs is $10k, this gives them some partner benefits including use of our logo to talk about the partnership. For cause marketing however we have a much higher commitment to allow a partner to use our brand in order to sell a product or service, $250k min. annually.”
“Case by case but we want some skin in the game from the company. Always depends on what they want from non-profit. Logo is certainly a minimum.”
Accelerist says… While organizations are across the board in their minimum revenue requirements, it’s clear that nonprofits are weighing many things when setting their minimums. Is the company donating advertising? Social media promotion? Providing in-kind donations? Just as you should measure the total value of your partnerships to account for all value, we encourage nonprofits to use this same approach when quantifying the value partners are bringing to the table.”
- Brittany Hill
2. If you don’t require a MRC, why not? (check all that apply)
Accelerist says… Nonprofits shouldn’t feel scared, uneasy or awkward about asking for a minimum commitment. Minimums are on their way to becoming an industry standard. We’ve found that nearly ALL of the industry-leading nonprofit organizations with the largest corporate partner portfolios do, and many of you are taking notice and looking to follow suit.
- Maureen Carlson
3. If you’ve asked partners for a MRC, how did they respond? (check all that apply)
Comments to this survey question included:
“Mixed results, larger companies have no problem with it. Smaller companies new to caused marketing need to be educated and most of the time the response has been positive, however, a few have required us to choose between requiring the min. or dropping the requirement to seal the deal. I’d say less than 10%.”
“It depends highly on the partner. We always frame it clearly that our typical working agreement is that we expect a $5k minimum donation. But there are cases where the effort required by us is so small that it doesn't matter if it's a small gift (a small startup with limited inventory for sale that wants to donate a portion of each product sold, and isn't asking us to promote it) tha twe'll overlook that requirement. For larger companies, we do hold to that $5k line to make sure its worth everyone's time, and some have proceeded, others have moved on.”
“We've seen all the scenarios listed above and it's taken about five years to strengthen our brand to take the risk of setting the minimum and showing the value that use of our logo and communications can bring.”
“The majority of partners understand the minimum commitment and are comfortable with it. Some, of course, are unable to make that commitment and do not partner with us. Overall, we have a positive response to the minimum commitment.”
“We specifically developed our Business Ambassador Program in 2017 to fill the needs of businesses and smaller corporate partners who weren't ready or able to commit to a $25,000 minimum. Prior to the creation of the Business Ambassador program, we were losing business donors willing to give $5,000, $10,000, and $15,000 gifts because we didn't have any kind of cause marketing program they could fit into, so they decided not to partner with us. The creation of the program also helped with the businesses that "go rogue" and pull our photos and logo from a Google search and just tell their customers they are doing a charitable promotion with us, even if they haven't signed an agreement. Most businesses can afford $2,500, so it gives them an easy entry point and some space to test out their promotion and let it grow organically. As a Business Ambassador they receive an annual badge with our logo on it, and a handful of other benefits commensurate with their level of giving. Most importantly, we provide them pre-approved language specifically tailored to avoid crossing into commercial co-venture territory with these smaller partnerships. It's been a huge help in this space!”
Accelerist says… Corporate partners are no strangers to minimum commitments. While nearly half of respondents stated they were afraid to require minimum partnership commitments because they did not want to rock the boat, or they were afraid this would scare the partner away, a whopping 65% of you stated that once you DID require the partner to make a minimum commitment, they had no problem with it. Partnerships of EVERY size require significant investment and work from your nonprofit, and aligning with your cause is driving significant value to your corporate partner. Don’t be afraid to set expectations!
- Melanie Newell
The Bottom Line from Joe… 📈 🧐
1. While most nonprofits DON’T ask for a minimum revenue commitment (MRC) from corporate partners, they should - especially from larger companies. They have the money, prefer the accountability and recognize the need! Smaller companies are more challenging, but they can commit something.
2. Currently, there is no standard amount for how much the MRC should be. It varies widely depending on the organization and the partnership. When in doubt, ask similar-sized organizations in your space what they charge. Or ask me and I’ll find out for you.
3. When setting these minimums, don’t limit yourself to just money. Minimums can include other valuable assets, like donated advertising, social media mentions, etc.
4. Follow the lead of top corporate partnership teams and ask for a MRC. If you don’t ask for a MRC, the next nonprofit that meets with the partner probably will. Why wait?
5. Companies understand the need for a MRC. (So do nonprofits, as only 8% of you said you were unclear on why you should ask for a minimum commitment in the first place.) 65% of you reported that once you DID ask your partner to make a minimum commitment, they had no problem with it. So go for it!
6. Do you need help figuring out MRC? Accelerist and I are here to help. Just reach out!
Good luck and let me know if you have any questions in the comments section below or hit me up on Twitter.
