Property Management Versus Suppliers: The Donation Threat

Are donations really required?

Seeking donations from vendors have become the standard for many of us on the property management side. Is it really the answer to our lack of budget for resident retention programs or corporate meetings?

Many on-site teams are instructed to request donations from our vendors for resident retention programs and even office supplies! At what point does it become the responsibility of the vendors to fund our retention programs?

Vendors are the bread and butter of our industry, without them we could not perform to our fullest ability. They are not meant to subsidize our onsite teams and corporate offices with donations. Yet there is a fear among vendors that if they do not grant a donation request they will lose our business.

In a recent survey, 94% of property managers said they would not stop using a supplier if they didn’t donate. However, 81% of vendors feel they would lose business if they do not contribute and 50% stated they actually had lost business when they did not contribute.

Although only a small group of property management companies make donation requests mandatory, suppliers feel threatened with loss of business if they do not contribute. In a relationship where both parties should be partners in success, asking for donations can sour that relationship - whether the implication to lost business is real or just feared.

What’s in it for the vendors?

In the same survey, 76% vendors feel they have been taken advantage of by a property management company. Contributions do not lead to more business for our vendors. The donations serve as no guarantee that the property management company will even retain that vendor’s services.

I know of one professional who does not care that their property has not used a company in three years they will still ask that company for donations; we are not talking property donation but a corporate lunch sponsorship. Another vendor told me that they were asked to sponsor a corporate training class. When they told the property management company no, that the vendor just did not have it in their budget, the response was along the lines of “Didn’t our company just contract you for a rehabilitation project?” I have even heard regional managers even state that vendors and suppliers are only good for taking property management employees out to lunch.

Considering that 22% of suppliers were asked for over $10,000 in donations over the course of the year to management companies alone, this system seems to cause quite a bit of resentment between two parties that should be partners. Suppliers are not offering contributions out of a sense of partnership, but rather reacting to the possibility of losing future business.

It seems to me that if we are asking suppliers to foot the bill for our events and programs, we need to have clearly define their benefits for participating, beyond simply the hope of continued business with us.

I don’t believe suppliers are looking for a “free ride” if they donate for events, but they do hope that their support of the events/programs will make the future sale easier in some sense.

It’s all about the relationship

The vendor and property management company relationship should be one of a business partnership. We need our vendors just as much as they need us to succeed. When you are putting together your property/corporate budgets, make sure you include room for your resident retention events & corporate events. 50% of vendors in the same survey stated that it was appropriate to request a donation once a year. I recommend all of us to remember this and use that request wisely. You may never know when you will need a vendor for a job referral, and if you ask all the time for donations they may hesitate a little too long to refer you.

Vendors are in the business to make money, just as we are, and it is something that we all need to remember. The next time you receive a donation of any kind from a vendor, please remember to send them a thank you card. Please keep this in mind when they donate breakfast or lunch at your apartment association event.

Suppliers, share this blog if you’ve ever felt like you had to donate in order to keep a client.