The Complete Guide to Corporate Philanthropy and Corporate Giving
Corporate Philanthropy is one of those terms that sounds much more complicated than it actually is. The Business Dictionary defines corporate philanthropy as: “The charitable donations of profits and resources given by corporations to nonprofit organizations. Corporate philanthropy generally consists of cash donations but can also be in the form of use of their facilities or volunteer time offered by the company’s employees.”
There’s also corporate giving which is social/philanthropic initiatives companies provide to non-profit organizations to provide financial support or to help advocate a particular cause. As a fundraiser, you know what giving is all about, but you might have trouble getting to the point where a company is actually willing to hand over the check. However, if you have a better understanding of how corporate philanthropy and giving benefits the company instead of your cause, you will be in a better position to convince them to open up their wallets. Our complete guide to corporate philanthropy and corporate giving can help you build a fundraising strategy that will help you meet your fundraising goals and initiatives.
Corporate Philanthropy Examples
Corporate philanthropy is widespread and includes companies from all industries, sizes and sectors. Some of the worthiest of note include:
- Coca-Cola: Coca-Cola has contributed millions of dollars each year since they first established a purpose-built company foundation in 1984. In hand with a pledge to donate 1 percent of their income annually, they have raised over $820 million since they first developed their philanthropy plan. Causes they support include global communities, education, the development of youth and clean drinking water.
- Merck: While cash is important, supporting other areas can be just as helpful. Merck is a huge supporter of STEM development programs in an effort to promote sciences in education. They are also major supporters of environmental sustainability. They look for opportunities beyond cash such as donating water filtration devices following disasters.
- Gilead Sciences: Although you might not recognize the name, this company is a leader when it comes to having a social conscience and they have championed causes such as HIV and hepatitis and assisting medical professionals in areas where medical products such as theirs are hard to come by.
- Citigroup: This bank encourages its staff to participate in their charity efforts with a focus on helping underprivileged people have access to skill improving education to help them become employable. They also contribute to urban transformation projects providing job opportunities for workers.
- Walmart: They are the second most charitable business in the world, assisting in areas that include sustainability, community advancement and economic development.
- Goldman Sachs: This company has an internal foundation that partners with organizations that include the United Nations. Their grants support a wide variety of causes with a focus on the Syrian refugee crisis of late.
- Alphabet: This is the holding company of Google, and their charitable efforts support cutting edge technology with strong support for research. Their employees are also heavily involved in their corporate philanthropy efforts.
- Chevron: A major energy company, Chevron finds themselves up against environmentalists and therefore must rely heavily on their social responsibility efforts. They focus on economic development where they drill including areas in Africa as well as being huge supporters of STEM education closer to home.
- Bank of America: For the past decade the Bank of America has initiated programs in support of community projects in hand with educational support for high school students.
- ExxonMobil: This energy company focuses on supporting women’s economic initiatives as well as STEM education and malaria research.
- Microsoft: The amount of cash this company has donated is staggering including over $1.2 billion of free software and hardware as well as 700,000 hours of volunteer hours.
- JPMorgan Chase: Last but not least, JPMorgan Chase has committed to investing $1.75 billion by 2023 in the jobs and skills, small business expansion, financial health, and neighborhood revitalization sectors.
As social responsibility initiatives increase, more and more corporate dollars, time and in-kind donations will become available. It is not limited to major corporations such as these, but will be seen at all levels of businesses right down to local mom and pop shops. This means opportunities exist for all sizes of nonprofits and a wide scope of causes.
Pros and Cons of Corporate Philanthropy
If you are trying to solicit corporate donations, you have to understand corporations see two sides to the “opportunity” you present. While you are focused on the benefits, corporations have to consider the pros and cons before committing including:
- Positive workplace experience: There is a rise in workers seeking out companies that share their values. When a corporation can present a list of the philanthropic work they perform, it helps create a positive culture that can attract more talent. People feel they are doing something worthwhile and that they are part of a giving community.
- Improved employee engagement: Collective participation in corporate philanthropy efforts creates motivation for workers who feel they are part of something bigger than themselves. Workers feel closer ties to the companies they work for and become more loyal which creates a happier more productive environment.
- Improved public image: Corporate social responsibility is more important than ever. Companies that align themselves with nonprofits that will be perceived as worthy causes can help improve their public image with the people who count. It can help attract loyal customers who share the same values.
- Improved consumer relationships: When customers know that part of the money they use to make a purchase will go to a worthy cause, it can create a more loyal customer base that increases repeat purchases.
- Employee giving: Corporations who participate in philanthropy can also set up programs that encourage employee participation. Matching gift programs are a perfect example of shared giving opportunities. It is even more meaningful when employees can give to the charity of their choice with matched contributions from their employer.
- Tax incentives: Corporations can use their donations as a tax break when they share monetary gifts.
- Product purchase, product donated: Other incentives such as matching product purchases that are then donated to someone in need is an excellent marketing scheme that improves brand positioning while also offering an authentic way of giving back to the community.
- Marketing opportunities: There is no denying corporations can gain from their philanthropy and use it as part of their marketing strategy. It draws attention to their social responsibility plan, creating a more positive image that can lead to brand loyalty.
- Community protection: Companies can choose to support community causes that protect the most vulnerable people in the country. It can be on a very personal, local level or on a national level.
- High costs: In some cases, companies that don’t plan well could find their contributions take away from money needed elsewhere.
- Wrong alignments: Corporations might unwittingly find themselves aligned with causes that prove to be controversial and therefore detrimental to their image.
- Ethical challenges: It is not uncommon for corporations to align themselves with charitable organizations that provide them leverage in their business operations. This is less than ethical and if discovered can lead to some challenges from a PR standpoint.
- Gains are delayed: It takes time to see the gains and benefits of corporate philanthropy efforts that can become costly over time.
- Commercialism: If not managed properly charity can come off more as commercialism making philanthropy look like something done for corporate gain. Consumers are wise to charity efforts that smack of insincerity and this will cause charity work to backfire.
- Employee resentment: If corporations insist on employees participate with their charitable efforts, it could lead to resentment. This is even riskier if the charities in question are not widely supported, are looked at with suspicion due to potential conflicts or efforts lack sincerity. As well, if it comes down to constant pressure for employees to contribute to charities, this could cause resentment if they cannot afford to participate.
For corporate philanthropy and corporate giving to be effective, it must come from a place of caring as well as from a company that has the finances to back it up. Thought must be given to including employees in the charitable efforts and help align giving with causes employees feel comfortable supporting. Time and money must be available to support charities both on behalf of the company and the staff they feel should be participating.
The Benefits of Corporate Philanthropy for Nonprofits
Corporate philanthropy provides support to nonprofits in the areas they need it most. While financial support is important, many nonprofits depend on volunteers to keep them operational. Although volunteers might be available in throngs, the skills brought to the charities are not always the skills required. Therefore, nonprofits require corporations to support them through monetary means in hand with things such as skilled volunteering, pro bono professional services, and grants to support their major projects or research efforts.
The Benefits of Corporate Philanthropy for Businesses
Corporate philanthropy provides an easy way for companies to improve their social responsibility plans and improve their public image. By aligning themselves with the right causes, they can create a positive socially responsible image that allows them to attract better talent, engage more customers and stimulate sales from a more loyal following of brand supporters. When employees are included in corporate philanthropy efforts, it adds more meaning to their work and helps them feel like they are involved in their community.
Types of Corporate Philanthropy
Corporations have many ways they can incorporate philanthropy into their business including:
- Employee giving: Employees donate their own time or money towards agreed-upon causes through their employer. This often becomes an important element of a company’s corporate social responsibility plan.
- Corporate Foundations: There are two basic ways corporate foundations can be set up: 1) A private foundation controlled by a corporation, or 2) As a public charity associated with a corporation. Private foundations are the most common and they are funded by the corporation’s money as well as managed by representatives of the corporation’s staff.
- Corporate matching: Corporations match the charitable donations of their employees either for a charity of the employee’s choice or one of the charities the corporation supports.
- Skilled volunteering: Skills-based volunteering leverages skills of individuals to help a nonprofit strengthen their profitability by having access to a higher level of talent than the people that volunteer or that they can afford to hire.
- Employee grants: Employees can approach their employer to get money for nonprofits they support or volunteer with.
- Corporate grants: Corporate foundations often provide grants to nonprofits to assist with projects, research, events, etc.
- Pro bono services or In-Kind Donations: Pro bono services are professional services offered without a fee. In-kind donations are goods, products and services donated by a corporation instead of money.
- Internal events and fundraising within the company: Corporations hold various events and fundraising drives within their company such as bake sales, contests, casual days, walkathons, fairs, etc. that staff can participate in. Targets can be set and, in some cases, departments might even compete against each other to see who can raise the most money.
- Corporate day of giving/volunteering: This is along the same lines of internal events, but is limited to a certain day or days of the year. It can be raising funds, but also be a day when employees can volunteer such as helping to build homes, assisting in sorting food at a food bank, or serving meals at a homeless shelter.
It is not uncommon for corporations to participate in corporate philanthropy a variety of ways to increase their effectiveness in raising funds. With the help of their employees, their efforts can become all the more successful, while also benefiting from the improvements in team morale, cooperation and productivity.
5 Steps to Securing Corporate Philanthropy from Companies
If you’ve tried securing corporate philanthropy from companies by hitting up every company you can think of, chances are you failed miserably. While there are many companies of all sizes looking for ways to improve their corporate giving and community involvement, they tend to be quite selective in how they choose their charities and causes. If you don’t have an ”in” with a company, it becomes harder to successfully solicit donations.
Therefore, your best bet is to use a strategy that will increase your odds of finding the funding you need. Here are five steps we find to be effective:
1. Set out your goals and a mission statement
It’s not enough to simply state, “I need money.” First, you need to write down a mission statement that describes what your nonprofit wishes to achieve. All you need are three things in your statement:
- Why you exist
- Who you wish to help
- How you will help
So, if you are a homeless shelter your mission statement would be something like: We provide housing to homeless families in the community offering temporary shelter until they are able to get back on their feet.
Once your mission statement is complete, you need to set some goals that will help you meet the needs of your mission statement. Your goals should be specific and relevant to your mission, measurable and attainable. Setting timelines for each goal also helps keep you focused and serves as a guide based on priorities, the simplest tasks, or both.
2. Understand your value proposition
This is a biggie as no company is going to throw money or time your way if you can’t show them what you offer. It can be connecting in a more meaningful way with their ideal customer. Perhaps you are known for the work you do in the community. You might have past examples of publicity corporations received who have supported you. You might even have touching examples of individuals your charity has helped and whose stories they can share as part of their social responsibility efforts. Every cause has a value. Don’t forget the manner in which you are able to accept their donations. For example, if you offer a match the donation option, this might sound like an easy way for them to work with you.
3. List your assets
Nonprofits are always after the big bucks, but you might have other areas where corporations can help. Remember the types of corporate philanthropy options. What else can corporations offer you that will be helpful? In-kind support, professional services, employee volunteer hours, food drives, clothing donations, etc. If you can show them how appreciative you are of anything they are willing to contribute, you can build meaningful, long-lasting relationships that can really blossom into something big. Could you use prizes for your next event? Are you putting on a show and could use some makeup, set materials or costumes? Are you a new nonprofit who could use help setting up your marketing or website? Do you need a lawyer or accountant’s advice?
4. Be smart about your partners
Use your mission to make a list of prospective partners that will align with your cause. An example of an epic fail in choosing partners would be a partnership between a child health org and a candy company. Although kids and candy make sense, the goal of the child health advocacy org is to advocate for the health and development of children in underdeveloped countries. Candy, in most people’s minds, is unhealthy. A better example of a logical partnership would be Habitat for Humanity partnering with Lowe’s and Valspar. You can also consider local businesses in your community if you are a smaller nonprofit.
Scale is important when choosing partners and often if you aim too high, larger corporations won’t have the time to consider you in their overall plan. Once you have your list you can find out the best person to speak to and approach them with an email, not soliciting their donation, but instead asking them for advice on a project you are working on. You can use the meeting time to determine their goals and see if you might make a good fit to help them meet those goals. You can review your campaign and ask their advice on how you might better your efforts. Then you can provide a proposal to outline why they might consider adding you to their corporate philanthropy efforts.
5. Present your assets
If it seems you have a connection with the prospect, you can get ideas from them and see if they would be interested in considering a donation. Nothing is easier for a business than having a clearly set out campaign ready for their help. If you can present a campaign already underway, businesses can see where they can help without having to come up with answers on their own. Following your discovery meeting, you can present your assets with their needs and goals in mind. Show them what kind of recognition you can offer them such as:
- Social media posts
- Email appeals
- Photos from your campaign efforts
- Testimonials from beneficiaries of your charity
- Testimonials from volunteers
- Success stories about meeting your own goals and mission
- Suggestions specific to their goals that your campaign can help them achieve
- Press and publicity other donors have received due to their contributions
It is not surprising a company might be hesitant to offer donations without you providing logical reasons you are a good choice for their contributions. When you can present your assets, in hand with a solid campaign they can get on board with, you are more likely to find companies open to assisting your cause.
All nonprofits can benefit from finding alliances with corporations and companies looking for causes they wish to support. With the right funding and army of volunteers, your cause can be brought to the attention of the right people allowing you to increase your odds for success and financial sustainability. Financial assistance, volunteer hours, and products and services provide you with the means to meet your goals and the needs of the people you are trying to help.
ABOUT THE AUTHOR
Chris Baylis is the President and CEO of The Sponsorship Collective and a self-confessed sponsorship geek.
After several years as a sponsor (that’s right, the one investing the money!) Chris decided to cross over to the sponsorship sales side where he has personally closed tens of millions of dollars in sponsorship deals. Chris has been on the front lines of multi-million dollar sponsorship agreements and has built and coached teams to do the same.
Chris now spends his time working with clients to value their assets and build strategies that drive sales. An accomplished speaker and international consultant, Chris has helped his clients raise millions in sponsorship dollars.