Continuing with our series on the not for profit for profit partnerships; I find that many people I talk with are amazed by this concept. Many of your credit counseling not for profit agencies are in some way affiliated with a for profit company. It is a relationship that works because helping people is what all businesses try to do whether you are selling furniture or trying to help people find the correct financing.
What has puzzled me is that hedge funds, private equity, and venture capitalist have not sought these relationships in an attempt to become more social minded, enhance their profitability, and attenuate the regulatory back lash. It is the relationships and alliances they develop that will move them into the next realm. I always revert back to a comment I heard Carl Icahn made once, and I am paraphrasing; executive management lacks innovative thinking. These types of collaborations work and organizations such as the Girl Scouts and AARP have been successful at it.
What people are perceiving in society today is that corporations gravitate to the least common denominator. The least common denominator is perceived as greed without care for the social good, gravitating to low wage paying environments etc… These perceptions overshadow any of the good these financial institutions are doing in the economy such as providing capital for business start ups and growth and ensuring that companies run efficiently through take over’s instead of letting them fail. I ask myself this question, when a private equity takes over a struggling company did they phrase their strategy as saving jobs or did they let someone or some entity phrase it for them?
It is time to move the mind of Americans into a place where they see our financial corporations as the solution and not the cause; especially private equity and hedge funds. There are so many benefits for financial institutions partnering with not for profits but it is the innovative thinking and modeling that is needed for such successful ventures.
When I speak of a partnership I am not referring to corporate America giving to not for profits which is a good thing to do, but it is not sustainable business model. Not for profits have been relying on gifts and fundraising for years and even though it is good and right to have this as part of the business model more efficient and sustainable revenue generating models are required.
It is important that for profit businesses understand that not every not for profit organizations are ready and capable of the type of alliances I am referring to because many of them are still in the donor driven mentality as their primary source of revenue. Vetting is very important to determine if the organization you are approaching has an entrepreneurial spirit. Most of all, it is important that businesses who pursue these relationships see it as a business strategy that should be protected just like any other business strategy.
The business environment is bursting with opportunities for these types of collaborations. We are ready for America to get back on its feet, we are ready and equip to move the housing market forward and spur the types of incentives that inspire small businesses to grow and this will all stem from the financial community’s ability to form the right partnerships and these partnerships will add value to their business model.
National Urban Development Center of the State of Florida
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To America’s success!