Jonathan Craig Rich is an entrepreneur and former investment banker with experience in raising capital for growth companies in the healthcare, technology, and consumer sectors. In the following article, Jonathan Rich explains shared value and how non-profit and for-profit businesses can mutually benefit.
Shared value is considered a deeper level of mutual benefit between two parties because, rather than remaining transactional, this technique ensures that environmental and societal challenges are also addressed under a spirit of unity.
In this article, Jonathan Craig Rich, formerly of National Securities in New York covers not only an overview of what shared value is, but also the way that non-profit organizations can actually share this newly defined value with for-profit organizations. By the conclusion, it should be clear that this concept is beneficial, in more ways than just the funding of a project, for everyone involved.
Jonathan Craig Rich Defines Shared Value
Many non-profit organizations partner with for-profit organizations in order to gain funding.
Jonathan Craig Rich, formerly of National Securities in New York says that this is the case with many charities and community organizations. However, as beneficial and important as they may be, these relationships rarely extend beyond a transactional agreement. Unfortunately, this actually means that both the for-profit and non-profit organizations are missing out on a deeper unification and source of benefits.
This is where shared value comes in. Shared value is a way for corporations to become more involved with the community. This is done through creating value for themselves economically using a specific strategy that creates value for society as well. This merit usually comes in the form of addressing current environmental or social issues.
However, the companies that utilize this strategy cannot do so to their fullest advantage without non-profit community partners. Therefore, this is ultimately a new way to emphasize the partnership between a non-profit organization and a for-profit company, with deeper benefits for both parties as well as the society they affect.
How Shared Value is Created Between Partnering Organizations
Jonathan Craig Rich, formerly of National Securities in New York explains that with an accurate understanding of what shared value is, we can move on to understanding how it is used. After all, while shared value is meant to benefit all parties involved, it will be rendered useless if it is not utilized properly. This is especially true since this concept is a relatively new model for the relationship between for-profit and non-profits.
Let's discuss the ways that companies and non-profit organizations can actually go about using the shared value model.
- Find Like-Minded Organizations If a company is looking to make more of a splash in society through shared strategies, the first step is to find a non-profit organization with the same values, domain expertise and beneficiaries. Realtor companies might search for a neighborhood improvement charity, clothing manufacturers can partner with those who provide clothing to those in need, or staffing companies might elect to work with a group whose mission is to help those seeking or needing interview skills, resume assistance or technical skills for example, to achieve deeper partnerships.
- Measure Tangible Impacts Gone are the days of a company partnering with a charity simply for publicity. While public relations can benefit from this partnership, the shared value model emphasizes more tangible impacts, like the numbers that represent business values, while keeping data specific and easily communicated between parties.
- Remove Barriers Jonathan Craig Rich, formerly of National Securities in New York says that it can be easy for a non-profit organization and partnering company to remain largely divided, communicating through stiff emails or one liaison only when necessary. However, to really utilize a shared value to its full potential, both organizations will benefit from open, friendly, and frequent communication and interaction regarding their collaboration. Additionally finding ways to align mission with effort is vital and those can be accomplished through for profit employees volunteering at their non profit counterpart, leveraging respective strengths of each organization to contribute to better outcomes for the partnership and resource sharing when appropriate.
- Integrate Social Purpose into the Budget When a non-profit organization partners with a for-profit organization, it is important that they share value by making sure their budget reflects not only what their goal is, but the tangible ways to measure whether or not they're succeeding in this goal as well.
In Conclusion
Jonathan Craig Rich, formerly of National Securities in New York, summarizes that it is highly beneficial to understand how for-profit businesses can utilize shared value relationships with non-profit organizations. This concept differs from the traditional transaction-based relationship between a company for profit and a non-profit, like a charity.
With this model, societal change can become part of the return on investment for both the non-profit and the for-profit organizations. This can be put into place by measuring real impacts rather than measuring success by publicity and public-relations positivity. That, in turn, can be reflected by a budget that demonstrates social purpose.
Finally, non-profit and for-profit organizations will benefit from deeper relationships with one another, learning skills and values that improve the individual goals of each party and society as a whole.
