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Archive for November 5th, 2014

Nonprofit partnerships: Due diligence required on both sides

The conversation during a recent meeting of the Phoenix Publishing and Book Promotion Meetup turned to the topic of partnering with a nonprofit as an excellent way of marketing one’s book. Kebba Buckley Button, a member of the group, expanded on the topic in her Nov. 2nd post for our group blog.

Partners

In her post, Kebba gives the example of the very specific steps one might take to partner with a food bank organization, including things like:

  • Offering talks or trainings
  • Donating a percentage of book sales to the organization
  • Joining a committee or the board of the food bank
  • Creating relationships with the organizations that provide volunteers to the food bank
  • Expanding the outreach to national and international organizations that support the same or parallel causes

All told, it is an exceptional post that provides concrete steps one could take toward creating a meaningful partnership with a nonprofit to benefit both the organization and the author.

Interestingly, however, another member of the Meetup came back to me with the following equally important questions:

On the matter of collaboration between an author and a charity: Do you have information about accountability and set up? How does one ensure that the charity in question gets what is due them? How can they protect their reputation and credibility? It would seem that the direct mailing and accounting involved is difficult, time-consuming work.

As I initially interpreted the question, I read it as the author asking how to make sure they were partnering with a reputable nonprofit. While that is an excellent question, this is actually asking the reverse: How does the nonprofit protect its reputation when choosing its partners? Two sides of the same coin, really.

First, from the author’s side of the equation:

As with almost everything in life, an author would certainly need to do his/her due diligence and research the nonprofit before committing to a partnership. Two good resources that offer checklists for consideration are:

(1) http://www.npgoodpractice.org/category/guide-categories-and-concepts/board-members-guide-partnership-planning/due-diligence

(2) http://www.nonprofitlawblog.com/mergers-due-diligence-items.

I would also suggest that the author ask for referrals to a few clients/beneficiaries of the nonprofit to see if/how the organization’s goods/services are distributed. Any hesitation by the nonprofit to provide such names should raise red flags.

Secondly, from the nonprofit’s side of the equation:

While many people are under the impression that corporate donations make up the majority of nonprofit funding, this couldn’t be further from the truth. Nonprofits rely hugely on the goodwill of their volunteers and donors to sustain themselves. In fact, the National Center for Charitable Statistics provides the following statistics for 2012 charitable contributions in the United States.

nonprofit donations

And often, charities hold funding drives and campaigns in which donors, large and small alike, offer what amount to promissory notes. The thing is, the auditors require those charities to record these promised amounts as actual donations. What’s the nonprofit’s next job? Collect on all that promised money, of course! So when you see that telethon or open the door to the neighbor kid who’s collecting for next weekend’s bowl-a-thon and say you’ll give $50, but you never get around to writing or mailing your check, however inadvertently, you’ve actually shorted the charity on the money it’s already recorded as RECEIVED in its ledgers.

The same would be true for any promises an author makes to deliver in a partnership with a nonprofit. The organization has no choice but to take you at your word that you will actually come through with that promised percentage of your book sales or promotion of its cause in your newsletter or offer to speak at its next fundraiser. If the author welches, the organization is left holding an empty bag.

What can the nonprofit do to protect itself? Same sorts of due diligence the author would do. Ask for references. Google the author. Find out how long he or she has been in town, and the other sorts of community involvement he or she has on record.

Lastly, I would recommend a very thorough documentation of the precise terms of agreement for both parties: what the author is expected to deliver and the dates for delivery, as well as what the nonprofit promises to do/provide in exchange. Partnership can most definitely be a win-win for both the organization and the author – as long as both sides benefit and honor their agreements.

Laura

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