Things to Consider When Choosing a Cause Related Marketing Program

The fact that your primary assets are invisible doesn’t make them any less attractive to corporations seeking word of mouth brand loyalty.  Your good name and trust among your members make your network into a goldmine for customer acquisition.  When financial profit exists as the bottom line for a company, using your cause as bait for customers can produce a host of unintended consequences and dissatisfaction over time.

On the other hand, cause related marketing can be very helpful in raising funds for your organization and even strengthen your social capital through the shared benefit of a successful Take care to research the motives, nature and practices of any company that seeks to partner with you. Below are some factors to consider.

Transparency.  How open and clear is the corporate partner about what amount of profit from cause related sales will be committed to your organization? Any company operating a credible cause marketing program will respond to requests for information and be able to answer specific questions about amount and accounting of funds used for charitable causes.

Pricing.  Does the company market cause related products at a different price than the same product sells through other outlets?  Sometimes a product will be sold at “list price” when customer referral comes through a charitable organization while selling the product at “discounted” prices through other channels.   This effectively makes the customer pay extra to cover any donation to their nonprofit cause.

Quality.  Don’t offer your members an inferior quality product in order to receive income for your budget.  Members may feel obligated to purchase the product and associate any problems they experience in product performance or customer service with your organization.  Although you may not formally endorse any product or company using your name for cause marketing, there is an implicit understanding by most members that you have researched the product and would not encourage members to make a poor consumer purchase.

Compatibility.  Is the product and company compatible with your organizations goals and values?  An animal welfare organization, for instance, will not want to allow a skin care product to use their name if the company uses lab animals for testing products.  An agency working for the benefit of children will not want to use a company that targets children with junk food or foods and high sugar content or deals in tobacco products.

Marketing.  What marketing methods will be used in public or targeted advertising?  You will not want your membership to be hounded by aggressive emails or phone calls.  Don’t allow the use of guilt or pressure by a company to make sales.  Marketing should be clear about benefits to your organization and choice of members to participate without pressure.  Marketing must be honest and should be effective enough to make any partnership profitable for your cause.  Reserve the right to approve any advertising campaigns.

Integrity.  The importance of integrity is related to other concerns on this list.  It is a good filter to apply to every step in a cause related marketing process.  Trust is your most valuable asset.  It can be quickly eroded if suspicions arise about any communication, motive or practice that violates common expectations of honesty, respect and fairness.  The primary values, history, recommendations and practices of the corporate partner in other areas (customer service, employee relations, advertising, etc) may give you valid clues about integrity.

Effectiveness.  Will the benefit to your organization be significant enough to justify a cause related marketing campaign?  Are there restrictions, qualifications or requirements that limit the amount your cause will receive?  If the corporation has used caused related marketing before, what were the results?  What projection does the corporation make for expected income and funding for your cause?  Is there any guaranteed donation to your organization for the right to use your name in marketing?

Expectations.  What work is expected from your organization?  Will time be required of staff, board, administration or volunteers to conduct the marketing project?  Does the marketing organization expect to have access to your membership, donor or contact  list?  Do not commit to a marketing process that would divert energy or time away from your primary mission.

Follow-Through.  Be sure that the corporate partner will supply detailed reports on a regular basis as well as a final report of all partner activity and income.  Reports should be available to your members on request. Evaluation by your board will determine if cause related marketing is right for your organization or if changes need to be made for future marketing projects.

With all these concerns and ways that cause related marketing could fail or harm your cause, should you consider using it as a fundraising opportunity?

Yes. With government funding, private grants and individual donations declining while social needs increase, cause related marketing continues to hold great potential for directing corporate profits to your cause.  Because it is connected with corporate sales and profits generated through association with your cause, income can be predictable and sustainable rather than being dependent on the decision of others or their ability to make a donation.

But do your homework on any cause related marketing opportunity.  Executed properly, it can be profitable for your organization and the corporate partner.  Benefit to your organization may extend far beyond financial income to include connection with the community, awareness of your mission, staff and volunteer cohesion.  A significant sustainable source of income that requires little time or effort can be an encouragement to everyone in your organization and fund your mission budget.

Blurring the line Between Profit and Nonprofit

It used to be simple.  I would buy tires at Sears and drop my change in the Salvation Army bucket.   I would leave my donation in the offering basket at church and give my credit card to the checkout guy at Target for my DVD.

Now you ask me to buy/give at the store, online and by phone. I’m told that you are a business/charity.  That makes me a donor/customer.  I feel proud/happy that I’ve contributed/purchased something that I need/believe in.

The forward slash connecting line combines things I’ve never put together before.  Makes me curious/suspicious.  But I know you’ve received something for your mission/profit.  Thanks for explaining to me this is a social benefit/business.

Innovative collaborations are occurring in the profit/nonprofit world.  This brings risk that the unique advantages of both business and charity may be lost- the warmth/purity of motive from a nonprofit charity and the competence/accountability of a business enterprise.  Collaboration also opens the door to humanizing business by bringing conscience and compassion to bear while expecting more from charitable causes.  More results, more transparency and more efficiency.

In addition to changing the nature of both for-profit and not-for-profit organizations,  the synergy and community created through cooperative efforts will allow each to do more than it could ever do alone.  The trust and freedom from producing a bottom line for investors along with the administrative and technological advancements of the business world can extend the reach and value of this new hybrid.

Any give and take must be cautious since nonprofits can’t afford to lose their most valuable assets- social connectedness and creative problem solving to make the world a better place to live, whether it’s financially profitable or not.   Standard business practices and sales performance goals can limit a worthy dream, create competition or dissatisfaction that create division.  Extreme compassion or dependence on volunteers that give time only as they are available may cause a commercial enterprise to go out of business.

So we experiment and use feedback to measure success in multiple bottom lines- people/profit/planet/community/productivity/integrity/sustainability/goodwill/hope.

That’s where I draw the line.

Financial Fuzziness in Charitable Funding

It’s interesting that we have come to define charitable benefit organizations as “not-for-profit”.  “Non” profit doesn’t clearly identify the nature of social benefit organizations.  It only states one characteristic that isn’t true.   Actually, it simply hints at the fact that “non-profits” usually don’t generate too much profit, or that it isn’t their primary goal, or that the profit generated is to be used for a particular purpose.  Since charitable organizations have grown beyond simply being different than business enterprise in regard to their source of income, it may be more accurate and helpful to define community benefit programs with a term other than “non-for-profit”.

One fallout from being labeled as “nonprofit” includes a set of assumptions about “for profit” business that by implication, must not be true about “nonprofit” organizations.  We may assume that business endeavors are productive, innovative, driven, highly complex efficient organizations.  Thus “nonprofit” organizations may be considered unaccountable, dealing in activity that can’t be measured or evaluated.  The “bottom line” that makes this simple for business doesn’t seem to fit or isn’t given the same regard in nonprofits.

Businesses have customers who must be served and satisfied for success. Nonprofits have clients who may or may not be helped.  Competition is a primary motive in business.  Nonprofits operate from concern and caring.  Nonprofits receive donations.  For profits charge fees. Not-for-profit organizations have dreams while goals and objectives are required for responsible commercial operations.  Business requires measurable results and growth within a limited time in order to survive.  Nonprofits may continue trying various approaches and programs with good intentions and social theory.  These and other assumptions naturally arise by defining charitable groups as “not” or the opposite of for-profit business organizations.

As many nonprofits have matured in purpose and productivity, using multiple revenue streams and talented executives in administrative positions, the line between “for profit” and “not-for-profit” has become blurred.  Corporations are becoming more socially and environmentally responsible.  Whether for profit or reasons of conscience, businesses are giving attention to bottom lines that include people, community and the planet as well as profits.  As the cost of caring rises, donations and government funding dwindle, nonprofits are seeking more ways to generate income.  Without the same requirements of a corporate board and stockholders, nonprofits may be more flexible in financial matters while retaining their tax exempt status and continuing to collect financing from various sources.

Until rules and regulations catch up with the growing common ground between profit and nonprofit organizations, there may be lack of clarity as charitable nonprofit organizations operate social business enterprises and subsidiaries.  Self monitoring along with public transparency is needed for members and donors to maintain trust in charitable causes.  Investors with an interest in community welfare and sustainability look for financial profit as well as social ROI.  New rules will eventually be created to deal with profitable practices of nonprofits and charitable work of for-profits.  Transforming practices and stereotypes can begin now.

See related research from Stanford, Wharton Business School and University of Minnesota professors describing for-profit and not-for-profit stereotypes.

Fundraising as Sacred Exchange

People who give money to a cause expect a return.  Something good will get done.  Something important will happen because I gave.  At first glance, it seems like the basic contract. But look at the fine print.  Much more is being exchanged that just money for a good deed.

Different currencies change hands in a single donation.  In addition providing a charitable service, a wise donor will require trustworthiness and competence from an organization. There may also be an expectation that respect or social status will be delivered along with a tax-deductible receipt.

Corporate donors may expect added business or customer referrals and endorsement of their product to be part of the exchange. A photo opportunity to enhance the company’s image or recognition in the nonprofit newsletter may also be part of the deal.  Rarely explicit, these added benefits are often part of an unspoken agreement.

Charitable organizations may also ask for more than just money.  There may be a need for technical assistance or intellectual capital in the form of demographic information and research.  A nonprofit group may also benefit from association with a trusted corporation that is known to give only to worthy organizations, encouraging others to give as well.  The expectation that a gift will continue to be supplied in coming years is sometimes only acknowledged when it is not renewed.

It is the trust and good will involved that makes an exchange between charities and donors sacred.  Will strings be attached or hidden agendas be promoted? Is a promise conditional? In the language of Adam Grant (Give and Take: A Revolutionary Approach to Success), is each party a giver, taker or matcher?

With lines blurring between for profit and not for profit organizations, desired outcomes and resources may be shared by donors and charities. Communication networks, workspace and equipment, legal or marketing expertise may be used by both.  Until existing laws are updated and contracts are clarified, mutual respect and trust is needed to insure fairness and efficiency in the work we do together…

Unless the sacred trust of partnership produces a better relationship and outcome than measured transactions.  Maybe the positive regard, confidence and readiness to give more on both sides is able to create a good that goes beyond our best strategic plans.

When something beyond what is approved by our lawyers and accountants is born, a life greater than our own may come to be. A new creativity and collaboration may lead us into a sacred future we aren’t able to imagine when our giving is limited to a safe 50% that requires personal benefit before giving more.

Corporate Citizenship: Neighbors and Business Working Together

There once was a time when people did everything in the neighborhood that needed to be done and made sure everyone got what they really need.  Then problems grew bigger and many needed more than friends could do and neighbors could give.  So we created government agencies to bridge the gap.

Then government services got big.  They were hard to manage and even harder to pay for.  As we counted on state, county and federal programs to meet our needs, people didn’t help each other so much anymore. But they did work hard to pay for services helping children with disabilities, the elderly, workers out of work and soldiers wounded in battle.  And there was still more to do.

So churches, synagogues and nonprofit charities provided family counseling, addiction recovery, preschool education and job training.  Charitable giving helped the homeless, the hungry and people coming out of prison.  But donations weren’t enough.  So businesses made grants for research to cure diseases, help young people in trouble and support the arts.  More was still needed for disaster relief, medical expenses, protection of life, animals and all creation.

As economic times became difficult, the burden of doing what’s right and paying for it grew heavier.  To be sure that everyone getting paid for doing good was doing it well, requirements and regulations came about that along with the demands of fundraising distracted groups from their first mission.

Could there be a better way?

What if community groups didn’t have to beg?  Maybe corporate profits could be used for doing good by those who need it.  What if profits from money spent in a neighborhood could stay in the neighborhood for improving it?  And all this could happen at a grass root level that keeps track of what is needed most and what’s being done to meet those needs.

If we could partner with businesses while avoiding the pressure of marketing and greed, if social networks could be made stronger and have fun earning needed funds by spending and serving together instead of being targeted and squeezed for more money, maybe we could become citizens again.  Citizens of a new world formed by intentional involvement in a commercial enterprise that values integrity, relationships, and generosity.  With an agreement for mutual benefit aimed at the common good, maybe we can find a way to do everything that needs to be done and make sure everyone receives what they really need again.

Be a better citizen by practicing the kind of innovative capitalism that supports the work you stand for, the groups you know that make the world a better place for everyone and give you a chance to be part of it.  When you become more than a consumer and work together with others, you support local business and multiply financial resources coming from corporations that are glad to make possible the great things you’re doing to change the world.

Today it takes courage, creativity and cooperation to be a good citizen.  Are you ready to see what a few thousand of us can do together?

Associational Funding

Responsible corporations are funding good work around the world, but especially in local communities where they do business.  Giving to organizations with members that do business with you just makes good sense for any company.  It is a good way to say “thank you” to customers and a good way to attract new customers.  The connection with a social network of any group and positive reputation through the network can build brand loyalty and satisfy the desire for companies that are doing well to also do good.

Even when members of an organization don’t have the resources to add a great deal to the financial bottom line of a company, the connection still contributes to social benefit goals of the company. If their work is known and appreciated in the larger community, this builds good will with citizens aware of the funding provided.  Many grant foundations now require nonprofit organizations to collaborate with each other to make services more efficient.  This ties small organizations with larger ones and groups serving different neighborhoods together.

If a group of 20-30 people can help a corporation achieve its community involvement goals, an organization of 300 members may be given priority in receiving funds from a concerned corporate sponsor.  Now imagine an association of 100 nonprofit organizations with an average membership of 50-100 members each.  Corporations are willing to grant larger gifts as a partner with the association. Gifts directed toward an association of organizations also hold greater promise of social return due to the cooperation of groups to coordinate efforts and avoid duplication.

Assuming social ties are meaningful in an association of nonprofits, the company benefits more from a larger network of groups.  When the association includes customers of the company, there is even more incentive to support the missions represented by groups in the association. Social networks are valuable to any marketing plan.  Greater trust within the network increases its value as a resource for word of mouth marketing.

The time has come for community benefit organizations to band together and recognize the value of their extended network of combined membership.  This multimillion dollar asset can be used to fund every good cause represented in the association. Social connections are to be treated as sacred. The best intentions of those who have gathered to do good can be supported from profits earned in the neighborhoods where they live.

Many word of mouth marketing systems have been established by different corporations to build their customer base.  Few marketing systems have been designed to nurture the social capital of neighborhoods and communities providing customers. With careful attention to community values and relationships, an association of groups can be created that is held together by mutual benefit and shared financial support.

Develop a cooperative association in your community that will help each group serve the community better and increase the amount of funding available.  Structures now exist for an association to direct corporate funding without the need to write a grant, pass legislation or request donations. Let’s learn to use the invisible assets already existing among us.

5 Reasons to Reform Social Network Marketing

1. Our social networks are being targeted, tapped, and stolen.

Corporations are very intentional about entering social networks with word of mouth and social media marketing tactics designed to gather customers through personal relationships. This is already happening.  “Buy one, refer 3 friends and get it free” is a common offer that places our social networks at risk.  When friends begin to target each other for personal gain, relationships change.

What once was a just a party, night out with the girls, parents association meeting, kids ball game or neighborhood bar-b-que becomes an “opportunity”.  Friends know when they are victims of a sales program. Sales training about how to be more effective and persuasive just make things more uncomfortable.

But it’s already here.  Since it can come through any individual without permission or warning, it can’t be ignored.  The force is too strong and variable be eliminated with rules or regulations.  It needs to be reformed to serve the common good.

2.When we recognize the value of our social networks, we can secure the funds we need for doing good.

Corporations that are investing millions of dollars in social media network marketing among friends are willing to invest that money in nonprofit organizations that produce the same results for the company- more customers. The same corporations that invest in FB, twittering among friends, followers of a youtube star or word of mouth referrals will gladly support a cause we share as customers.

When we are conscious as a social network, we can shift the flow of finances used for marketing into a common purpose to do good. When those who support a common cause agree to cooperate for community benefit, everyone can win.  Transparency and integrity can take away the weirdness and suspicion about hidden agendas or being used.

Agreement up front about a good product with a good company that supports a good cause through our cooperative effort removes the pressure that can be divisive in a social network or cause people to fall away. Only invest your social network for a good cause if you are investing in your network at the same time.

3. Relationship marketing is about RELATIONSHIPS.  If done properly, relationships can be strengthened.

When used blindly, any kind of marketing can destroy relationships.  Even with good intentions. When marketing becomes a campaign, friends become customers and quotas are to be met, we begin to fear opening the next email or answering the next phone call from certain friends. The spam filter doesn’t work and a “gotcha” contact chips away at goodwill, respect and trust.

With awareness and commitment to relationship ethics of respect, freedom, honesty and justice, bonds can be created around the common good. When resources are shared with equity and transparency, everyone benefits and the joy of economic well being generates hope.  Mutuality in fair exchange between friends teach us that an alternative may exist to the win/lose marketing game we’re accustomed to playing.

As we consider what is best for the environment and the disenfranchised and those with special needs among us, the value of social marketing allows us to direct commercial profits toward doing the greatest good. Cooperative effort that creates financial support for creating and sustaining common space and a common purpose creates a true partnership. Everyone contributes and the volume of markets created brings shared power for consumers to support work that provides the most social benefit.

4. Integration of money with relationships develops character by testing motives and revealing values.

Free choices about how money will be spent for essential products and services create a voice from consumers about what companies will receive loyalty over time.  We can promote healthy sustainable products and services that are safe and contribute to a better quality of life.  Sharing a concern that everyone’s children do well, not just our own creates a caring community and encourages corporations to give attention to multiple benefits and consequences beyond the financial bottom line.

Cooperative intentional buying  and selling requires an openness and communication that builds authentic community.  Self determination and self sustaining organizations open the door to deeper belonging and positive identity. Shared pride that comes from working together helps reinvent the world as a more peaceful and satisfying place to live.  Accountability becomes a personal choice more than attempts at forcing compliance.

5. The next generation needs and deserves a better economic structure.

A more equitable economy allows everyone to participate according to the same rules of distribution. That doesn’t mean that everyone will experience the same benefits, but everyone will have opportunity.  Hard work and contribution to the common good will be rewarded. Our acceptance of privilege makes it difficult to visualize a system where more people are able to secure their own welfare, but when serve more than our own interests, we find an abundance that is not easily recognized in a culture where scarcity is assumed.

Short term interest in quarterly reports and weekly balance sheets give way to future studies that include our great great grandchildren.  We can spend our income in ways that influence a course of events and create systems to combat unintended negative consequences of current decisions.  We can learn to sacrifice today that which makes a way for the best to emerge through us all for generations to come.

The profit motive alone will never accomplish these five objectives. With courage and collaboration we can bring reform to a faulty economic system revolving around greed and self interest. Through agreement to experiment with new forms of exchange, we can discover a better stewardship of all that is given for us to share.

Do You Show Up as a Consumer or a Citizen?

We’re all consumes.  We buy and sell our stuff, our vision, our ideas and ourselves.We’re all citizens.  We belong with responsibility.  So “Citizen or Consumer?” is not a question of what we do and don’t do.  It’s a question of our primary identity, how we show up to others in our world.

And it makes a difference.  When people who are first consumers show up in our world, the world becomes defensive.  We act on assumptions of scarcity, power and dependency.  We’re more likely to take care of somebody, or expect them to take care of us. The consumer world generates fear, suspicion and shame.

What if we don’t have the intellectual, financial, social, beauty or charismatic currency needed to buy what we believe we can’t live without?  What if someone else has more and outbids us? What if no one wants to buy what I’m selling and thinks my version of fun, care or art sucks? When I run out of what makes me attractive enough to get at least some of what I need, will I end up being alone?  These are important questions among consumers. Predictability, proof and acquisition govern most choices.

For citizens, we worry about things like how everyone can share in the common good. What’s worthwhile depends on what the outcome might look 100 years from now. Traveling together to destinations that count and getting there with our integrity intact is more important than finding the most expedient path. Creativity that brings joy and meaning to a community or helps it flourish socially, economically and spiritually trumps the idea that brings in the greatest profit in the least amount of time at the lowest cost..These are the concerns of people who show up as citizens first.

Others watching how we show up at a meeting, a party, for work, or on holidays will have a better picture of how we show up than we do about ourselves. The image we try to make in the mirror is never the same as the real thing that others experience.  Authenticity may not feel safe because there’s no assurance that who I am will be noticed, accepted or useful.

When we show up as authentic citizens who care about the neighborhood and social networks that give us life, everyone has a better chance of receiving what is needed.  We don’t all have the same desires or needs, but then we don’t all have the same gifts or resources, either.  Authenticity and commitment to being good citizens reveals the needed gifts each of us have for making the world a better place.

Is there a way we can make genuine citizenship a lasting reality? Can we reduce the negative impact of being consumers above everything else? Can we mitigate the effects of personal ambition, greed, deception, and fear that showing up as consumer breeds in a friendship, work group, congregation or family?

What will it look like when marketing takes is rightful place as servant among us? How can we buy and sell in ways that strengthen friendships, create hope and puts values we proclaim into practice? The role of consumer has been accepted as a necessary norm along with it’s principles, strategies and goals. When we meet next time, let’s come as citizens first and see what happens.

Then we’ll have some guiding stories to a more sustainable, flourishing and peaceful community.


Creating Real Jobs from Invisible Assets

We primarily depend on the government or business to create jobs so we can earn a living to provide housing, transportation, medical care, education, entertainment and all that is needed for ourselves and those we love.  We give away our money in taxes and hours of our life in working with the hope that government or business will provide for our needs.   We may give up our freedom and neglect our families to serve government and business in return for the wages and benefits they promise.

Sometimes this system works.  As it does, business tends to become greedy and rewards those at the top with a salary and bonus for top executives that may be 400-500 times the salary of the average worker.  When government grows, it creates a larger bureaucracy with red tape and waste that dampens the spirit of enterprise and personal responsibility necessary to economic health.

When the system isn’t working, corporations and the banks that support them become fearful and hoard resources needed to create jobs.   For their own survival, costs are cut back and jobs are lost. In lean times of great need, governments become overextended in attempting to care for citizens.  Raising taxes and using credit hurts the very people government is attempting to rescue.

When we depend on corporations, we become consumers, addicted to the things we can buy.  We fall into the trap of believing we need just a little more, the new improved product, or something it seems everyone else has.  We build stuff so we can buy stuff, locked into the system as consumers.  What we consume becomes our goal in life and what we own becomes our identity.

When we depend on government, we become clients.   Over time we come to expect and take for granted the assistance that is offered.  We learn to manage the system in order to receive what we need.   A battle arises in negotiating our rights and benefits with those who make decisions about how government programs are administered.

The group of people that refuse to depend on corporations or government are entrepreneurs. They may seek the blessing or assistance of both government and business, but they depend more on their own effort to create what is needed for economic survival in this world.  Few are able to take this route because it requires creativity, great determination, resistance against failure, a worthy product or service and an initial investment to get started.

Entrepreneurs take risks without the safety net of corporations or government to back them up.  They tend to be fiercely independent and sometimes rough in their pioneer spirit. They are often willing to do “whatever it takes” to succeed and may lose friends or family in the process.  Although figures vary, one conservative study showed that 34% of business start ups fail during the first 2 years and by the end of 4 years, 56% have failed.  Of those remaining, some are still at a break even point.

Is there is a safer way to invest and build on our social relationships collectively rather than independently?  Can we cooperate in a way that creates a livelihood for those who are connected for the common good?  With a believe in abundance, there is enough profit to go around for everyone to share.  If we realize that WE are not broke, then maybe we can find a way for many to prosper.  Some are suffering financially, but the GNP of our country is sufficient for everyone to make a living if we can create ways to provide an opportunity that neither government or business is doing.

A responsibility we all share is to provide a ladder up for anyone ready to climb it. By creating jobs through our connections around community needs and resources, we can. Collaborating for the common good will strengthen our neighborhoods and families through economic development opportunities made available to everyone.

The Allurement of Private Enurement

IRS 501 code reads, “The organization must not be organized or operated for the benefit of private interests, such as the creator or the creator’s family, shareholders of the organization, other designated individuals, or persons controlled directly or indirectly by such private interests. No part of the net earnings of a § 501(c)(3) organization may inure to the benefit of any private shareholder or individual. A private shareholder or individual is a person having a personal and private interest in the activities of the organization. If the organization engages in an excess benefit transaction with a person having substantial influence over the organization, an excise tax may be imposed on the person and any managers agreeing to the transaction.”

Legal judgments on what this regulation means have been nebulous at best because it deals with invisible assets in relative terms.  It may be simple to count the dollars one receives, but but not so easy to measure the trust, influence, authority, good will, promises, teaching, gifts, relationship advantages, shame or gratitude that are connected to money received by members of an organization.  The term “inurement” is so much of a mystery that WordPress doesn’t even provide spelling for the word.

Although legal considerations matter since a nonprofit organization can lose or fail to obtain tax exempt status for violation of the private inurement code, the greater danger may be a loss of trust and transparency among members/supporters of an organization.  The negative results are more felt than proved on a specific budget line and can be harmful to much more than an organization’s tax status designation.

At the core of private inurement is a practice of using the assets of a nonprofit organization for personal gain.  It is often limited to examining the tangible investment of nonprofit funds to create exuberant compensation for paid staff of the organization, but a moral interpretation goes beyond legal definitions to suggest that anyone in leadership may unfairly use their intangible power or leadership over members to influence them is such a way that he or she profits financially as a result.

Leadership is a sacred trust that ought not be entangled with suspicion or mixed motives.  When considering a profit/nonprofit partnership, there is always the possibility that as members of a community enter business arrangements within the social network, there may be charges of private inurement, or using the organization for personal benefit.  This can happen when an auto mechanic, real estate agent, financial planner, construction contractor or Mary Kay representative does business within a congregation or nonprofit organization.

We may argue with a minster or nonprofit CEO who strongly influences their group to contract with their own family members to perform maintenance on properties owned by the nonprofit at a fee that is far beyond normal or for services that are never rendered.   We would probably not, however, complain about a son or daughter providing music lessons for a reasonable fee to members of the group (as long as no undue pressure is applied by leaders), or about the leader of a group selling books he or she has authored.  When members of an organization freely choose to do business with one another, the normal conflicts of commerce may arise, but the burden of unfair advantage among members should not be an issue.

Care must be taken to level the playing field of opportunity for all and ensure that no one benefits simply because of their position.  It is difficult to establish rules since the connection among friends is a primary dynamic of relationship marketing and coexists with more formal relationships and informal power within organizations.  One possible strategy is to be sure the organization benefits from any commercial endeavor and then the organization can choose ethically and legally how a leader would be compensated rather than allowing a leader to act independently with unlimited range of profit through the organization.