How charities can benefit from collaboration with financial services
Rina Soni, Country Head of Resource Mobilisation & Marketing for HelpAge India, demystifies the process of working with financial services for nonprofits.
Charities play an important part in modern society, providing services and activities for those who are most vulnerable. Yet, for many, there is the constant challenge of securing the appropriate level of resources to respond to service demand. The cost of retail fundraising and scarcity of unrestricted resources adds to this challenge. Setting up an in-house distribution network is a time-consuming, effort-intensive, and investment-heavy proposition, and attracting the right talent to manage and set up this distribution channel is another hurdle in the process. As a result, we see charities outsource these to fundraising agencies who have large face-to-face operations.
It’s time for charities to start looking at alternatives to these existing models.
It has never been more important for charities to consider collaborating with others to achieve their mission and multiply their impact. There are many examples on the programme side, but it is time to look at it this through the lens of retail fundraising, too. By working with other organisations with large distribution networks, charities can hitch a ride on existing audiences.
Financial services organisations with large retail distribution networks are ideal to collaborate with. Through strategic partnerships, charities can increase their own visibility through branch networks while also raising funds through donation options that can be added to products in the portfolios of partner organisations.
Increase reach & fundraising potential
To operate effectively, charities need to ensure they have the capacity to raise sufficient funds; it makes economic sense to take advantage of existing distribution networks that can be found through partnerships. Working in a collaboration with financial service organisations can support you to reach a wider audience by integrating donation asks into the financial pitch those organisations are making to the client.
In the Indian context, where there are many for whom the theory of karma is integral to their systems of belief, this is all the more relevant. People want to give and are looking at avenues that make it easy for them to donate. What better way than by integrating your gift when making a financial investment? For example, an agent advisor pitches an education plan for a child, and in addition pitches that while the client takes care of their own child’s education they can also invest in future of a child who is not so fortunate. Similarly, when pitching a retirement plan, they can introduce the idea of supporting an old age home.
What do financial services gain?
Research shows that the 87% of consumers globally prefer brands that are affiliated with social causes. The same number believe that companies should play a role in the long-term rebuilding after a disaster, and nearly seven out of 10 global citizens expect companies to play a role in some social cause.
NGOs and corporations can provide one another with complementary distribution capabilities, with corporations providing global distribution systems and NGOs – which have knowledge of, and access to, local networks and existing distribution systems, and have built trust with various local stakeholders – facilitating the ‘last mile’ local distribution. An example in the microfinance arena is the partnership of HSBC’s global Islamic banking division HSBC Amanah with the international development and relief organisation Islamic Relief to offer Islamic microfinance in Pakistan: both microfinance and banking ventures provide financial services to devout Muslims in accordance with Islamic Shariah law. HSBC Amanah provides funding and training in microfinance to Islamic Relief, which, in turn, fulfils a role comparable to a local partner marketing company, marketing microfinance to local entrepreneurs, identifying and screening customers and their projects, and tailoring the offering as needed.*
Another example, though not from financial services, is of Doctors Without Borders’ extensive on-the-ground networks in developing countries that make it a reliable, efficient, and trustworthy partner for pharmaceutical companies for distributing medications in such environments. Providing this product/service bundle on the ground can be a shared responsibility between firms and NGOs.*
At HelpAge India, we have initiated conversations with a leading private sector bank whose focus is to build the retirement segment in their customer base. We have been able to generate interest from the organisation and will be looking to take it to a meaningful conclusion soon.
Through strategic partnerships such as these, both partners have much to gain. I would recommend charities to initiate these discussions with financial services players in their local markets after identifying those with which they have a natural fit. Collaborations that help to upscale new ideas are greater than the sum of their individual parts.
*Corporate-NGO Collaboration: Co-creating New Business Models for Developing Markets by Nicolas M. Dahan, Jonathan P. Doh, Jennifer Oetzel, and Michael Yaziji
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dinosaur game · March 13, 2023 at 08:39
Even sharing workspaces allows nonprofits to save on their administrative costs while encouraging collaboration and increasing visibility within the organization.