Mission-Driven Purchasing: A Strategy for Nonprofit Procurement Leaders

In the realm of nonprofit organizations, procurement has traditionally been viewed through the lens of cost efficiency. However, an emerging paradigm shift towards mission-driven purchasing is redefining the role of procurement leaders in the sector. This approach recognizes procurement as a strategic function that can play a pivotal role in advancing the organization's mission.

Mission-driven purchasing is about aligning procurement decisions with the organization's core values and mission. It is about going beyond cost considerations, considering the social, environmental, and economic impacts of procurement decisions. For example, a nonprofit organization committed to environmental sustainability might prioritize purchasing from suppliers with strong environmental credentials.

Embracing Mission-Driven Purchasing

The benefits of this approach are multi-fold. It strengthens the organization's reputation, enhances stakeholder engagement, and creates a positive impact on the community the nonprofit serves. Furthermore, it enables nonprofits to use their purchasing power to foster positive change, whether that's supporting local businesses, promoting fair trade, or reducing environmental footprint.

Benefits to nonprofit organizations engaging in mission-driven procurement include:

• Increased loyalty: According to Givinga, companies (including nonprofits) that are mission-driven tend to have higher rates of customer loyalty. Customers are more likely to continue supporting organizations that align with their values and contribute positively to society.
• Appeal to donors: Inc. published an article in 2023 featuring a company embracing mission-driven marketing. Two-thirds of consumers in a 2021 survey consider a company's purpose when making buying decisions. Nonprofits that engage in mission-driven purchasing can demonstrate their commitment to their mission, appealing to this demographic and potentially increase their funding.
• Enhanced efficiency and outreach: By intentionally selecting goods and services from local or minority-owned businesses, nonprofits can effectively uplift and support marginalized communities. This not only enables these organizations to drive economic growth in these communities but also reinforces their dedication to diversity and inclusivity. An additional benefit is that deliveries may even be expedited when your supplier is nearby.

Strategies for Implementing Mission-Driven Purchasing

To succeed in this new role, a holistic understanding of the organization's mission and the broader social and environmental context it operates within is crucial. You'll need to build strong relationships with suppliers who share your organization's values, and develop procurement policies that reflect these values. And, most importantly, you'll need to champion this approach within your organization, advocating for its adoption across all levels.

Procurement leaders looking to drive these types of changes in their organization should engage in the following tactics:

1. Eliminate Data Deficiencies: By eliminating data deficiencies, procurement leaders can make more informed, mission-aligned purchasing decisions. Digital transformation, even in small ways, can continue to help surface more data and suppliers can help.
2. Develop Clear Policies: Detailed policies outlining procedures for purchasing goods and services can ensure alignment with the organization's mission. This can extend to policies that determine what employees buy. Some suppliers can even help you guide your employees towards purchasing products with preferred certifications (ex. Climate Pledge Friendly)
3. Utilize value-based purchasing: value-based purchasing can involve choosing suppliers who align with the organization's mission and values, even if their prices are higher. For example, a nonprofit might choose to purchase from a supplier that employs disadvantaged individuals, in line with the nonprofit's mission to support such individuals. Some suppliers, like Amazon Business, utilize their procurement hubs to help you identify relevant businesses.
4. Support local partners: When you consider the fact that 66% of local businesses give to charity, you start to see great synergy and opportunity. Purchasing from local vendors will likely have a direct impact on your own success.

Future Perspectives

Mission-driven purchasing is not just a trend, but a strategic imperative for nonprofit procurement leaders. By embracing this approach, you can position procurement as a powerful tool to advance your organization's mission, create positive social impact, and drive meaningful change. Be the change agent your organization needs – lead the shift towards mission-driven purchasing.

To make the most impact, it's crucial for leaders to connect with their suppliers early in the year. By doing so, you can collaboratively game plan and strategize for the rest of the year, ensuring alignment and maximizing the positive outcomes of your mission-driven procurement efforts.