How to Create a Successful Nonprofit/For-Profit Collaboration

Blog by Deborah Rozman, President and CEO of Quantum Intech, Inc. (dba HeartMath Inc.)
May 10, 2011 8:00 AM ET

Blogs by Deborah Rozman, President and CEO of Quantum Intech, Inc. (dba HeartMa…

More social entrepreneurs are asking how to set up both nonprofit and for-profit collaborations to increase their social impact. Sponsorship programs, pro bono volunteer programs, collaborative product development and joint marketing campaigns in which a percentage of proceeds go to the nonprofit are some of the ways that for-profit companies and nonprofits can benefit both society and their organizational goals.

Some criteria for successful partnering include:
  1. Mission alignment and resonance

  2. Complementary products or services

  3. A well-planned, mission-driven collaborative project designed to be win-win and approved by the boards of both organizations: e.g. for-profit provides matching funds for a nonprofit fundraising campaign; for-profit provides sponsorship of a nonprofit program; for-profit hires nonprofit for research and development; for-profit licenses non-profit developed IP and provides annuity revenue to nonprofit

  4. Coherent communication between project owners and implementers.

Some social entrepreneurs are setting up both nonprofit and for-profit companies to achieve their mission, in which case there are additional criteria to consider, including:

  1. Respect for different legal requirements of a for-profit and a nonprofit: e.g., separate boards, management teams, office locations and lists.

  2. All agreements and contracts between the nonprofit and for-profit need to be reviewed by a law firm specializing in nonprofit law to make sure there is no unintentional “self-dealing” on the part of the for-profit organization or its officers and to make sure all agreements are to the advantage of the nonprofit organization.

  The HeartMath social mission was intentionally set up as both not-for-profit and for-profit enterprises for broader mission reach of HeartMath programs and products to all levels of society (wealthy to underserved). HeartMath has a triple bottom line mission – people, planet, profit. It was founded in 1991 by Doc Childre out of a deep care for people and the planet, and a desire to develop effective and scalable methods and technologies to help adults and children self-regulate emotions and behaviors. With separate law firms, boards and management teams guiding the founders, HeartMath includes the 501(c)3 nonprofit Institute of HeartMath, the for-profit Quantum Intech Inc. (dba HeartMath Inc.) and its operating company HeartMath LLC. After 20 years of successful implementation under its belt, HeartMath is considered a “thought leader” on how to create and manage for-profit / nonprofit partnering for social and economic benefit.   “The ‘Wow’ factor about Quantum Intech for me was on a much deeper level than just the products they provide. It includes their work with the HeartMath nonprofit, and the deep roots of research and philosophy and thoughtfulness that are behind the products, and the deep resonance between the philosophy of the work HeartMath is doing and the philosophy of RSF. That’s why we felt such a strong connection and invested in Quantum Intech.” —Esther Park, Senior Managing Director at RSF Capital Management  The Institute of HeartMath (IHM) research and education organization focuses on research, assessments, training methodologies and curricula development, providing HeartMath educational programs and products to those who cannot afford them, including schools (pre-K through college), community service organizations, prisons, military families and veterans. IHM does grant writing and fundraising to support its research and education initiatives and makes a profit on the sales of products to its membership. IHM also licenses its research-based training methodologies to the for-profit Quantum Intech to productize in programs for multiple markets including: corporate wellness, health care systems, health professionals, personal development, consumers, and channel affiliates in these markets. The exclusive license agreement has minimum performance requirements and guarantees the nonprofit annual annuity revenue. The executive teams of the nonprofit and for-profit companies meet twice monthly on strategies to further their common mission, which is to facilitate a fundamental shift in health, well-being and consciousness globally.   The HeartMath organizations offer individuals and organizations an opportunity to share in their mission through investment, licensing, purchasing HeartMath products or services, donating to or becoming a member of IHM or a sponsor of IHM’s programs for the underserved. HeartMath LLC provides about five percent of revenues along with discounted products and pro bono services to IHM.   HeartMath LLC will provide matching funds up to $10,000 for IHM’s May fundraising campaign “HeartMath for Communities” to provide research-based "The Resilient Organization – Building Staff and Organizational Coherence" for management teams of community service organizations to manage overwhelm, build resilience and increase social impact and the "De-Stress Workshops” for nonprofit constituents helping them with today's challenges. I invite you to participate at Corporate Matching Gift Program.   Additional 3BL articles by Deborah Rozman

Deborah Rozman is President and CEO of Quantum Intech, Inc. (dba HeartMath Inc.) and serves on the advisory board of the Institute of HeartMath. Quantum Intech, with its scientifically validated HeartMath® programs, is a world leader in personal and organizational stress reduction. HeartMath provides individuals and businesses with a set of tools, methods and emWave technologies to empower themselves to navigate through stressful, changing times. HeartMath programs have enabled organizations to achieve a 2:1 ROI in lowered health costs within one year – while at the same time increasing employee satisfaction and performance. The aggregate savings – and additional returns from enhanced performance – add up fast, creating a significant value proposition for companies and society as a whole.

Quantum Intech also has a strong reputation as a socially responsible company with a triple bottom line mission in partnership with the 501(c)3 nonprofit stress research organization, Institute of HeartMath, which provides HeartMath’s stress solutions to the underserved, including schools, community service organizations and veterans.   QINT13688