Collaborative nonprofit projects are on the rise, such as through new joint venture opportunities, partnering with social enterprises, and even strategically engaging with business to further mutual interests. But Section 501(c)(3) organizations may not simply give their money or other assets without restrictions. After all, their resources are charitable: they held in trust for the “public” benefit and subject to high levels of legal accountability. So, what questions should these nonprofits ask themselves before engaging in these ventures?
Partnering with commercial businesses can be a great way for nonprofit organizations to fundraise. Over the past decade, cause-marketing relationships between nonprofit and commercial businesses have grown exponentially in popularity. Campaigns like Yoplait Save Lids to Save Lives, Dove’s Campaign for Real Beauty, American Express’ The Members Project, Nike’s Livestrong Bracelets, and The Gap’s Product Red are all great examples of long-term cause marketing relationships that have helped generate millions of dollars for their respective charities.
Yesterday, AL.com reported that Marcus Fetch, a former nomadic traveler was opening Redemptive Cycles, a nonprofit bike shop. The article explains, "The [shop's] nonprofit status allows the business to serve a charitable function, rebuilding, fixing and reselling used bikes at the cheapest price possible."
How is it possible that a retail store, which provides goods and services in the selling and repair of bicycles, can be a nonprofit organization? It seems so… commercial.