Fundraising Q&A: Strengthening corporate investment

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What do you recommend to strengthen our charity's approach to corporations?

Asking businesses for support is often the second default after "let's have a special event!" What you need to remember in your diversified fundraising plan is neither of these approaches are necessarily very effective without a clear strategy in mind. Also, individuals will always give the greatest percentage of support, often with unrestricted gifts. That statistic may differ somewhat if your organization is a provincial or national association that offers no direct benefit to those in need, rather serving those who serve. Whatever the case, you want to tap as many sources as possible and business is one of them. Depending on where your charity is located will have an impact on whether you are approaching local entrepreneurs or national corporations, or, if you're lucky, both. The first question you'll want to answer before making your pitch is: What's in it for them?

A 2008 Imagine Canada release states that our largest corporations have moved beyond cheque-book philanthropy. Quoting Dr. Michael Hall (formerly their VP of Research):

"While the demand for these companies to give is persistent and increasing, they are doing more than just cutting a cheque for charities that have asked for help. What really stood out in the research is their strategic approaches to community investment and the ways in which they are engaging their employees and their broader stakeholder networks - clients, customers and suppliers - to leverage their philanthropy. They are putting a lot of thought into how and where they give, and are quite innovative in their approaches."

The research spotlighted 93 of Canada's largest companies with annual revenues exceeding $25 million and examined their community investment practices. There is good news and bad news; here are some of the highlights:

  • 71% of those surveyed strongly agree that charities generally improve the quality of life in Canada
  • 38% said that too many charities are trying to solicit money for the same cause
  • Direct donations accounted for 81% of the total value of all contributions while sponsorships and cause marketing account for 19%
  • 82% of large corporations support some form of employee volunteer activity - adjusting work schedules, taking time off with pay, organizing company-sponsored volunteer events, promoting employee donations, matching grants and raising money from customers and suppliers on behalf of a charity
  • Only 39% reported that they had written policies and only 27% reported that they measured the benefit of their contributions
  • The total value of contributions from large corporations as a percentage of pre-tax profits is actually lower than that of the broader business community (median value of 1.0% vs. 1.25% respectively)
  • Large corporations also give less as percentage of revenues (median of 0.06% compared to 0.63%)
  • Large corporations tend to focus their support on a narrow spectrum of more mainstream charities and nonprofits and overlook less-known emerging charities

Dr. Hall went on to say that "this study told us that the philanthropic spirit is alive and well among the corporations in Canada with the deepest pockets. It also showed that these same companies would do better if they were more organized and strategic, on the lookout for opportunities to work with the broader array of charities, and better able to measure the tangible benefits associated with their philanthropy."

The insights gleaned from Imagine Canada's research were reinforced in a recent interview with Mary Deacon. Once a fundraising colleague, she is now chairing Bell Canada's $50 million investment into a four-year national mental health initiative, the largest corporate commitment to this field in Canadian history. Mary's perspective is unique because of her significant experience raising funds for Canadian charities prior to her role at Bell.

I also spoke to Sabrina Gollnow, Associate Director, Corporate Partnerships at Sick Kids Foundation who had helped orchestrate a panel discussion of business executives at AFP's Fundraising Day. She shared some of the insights from that session.

Strategy is the operative word for both sides

Corporate investment still requires more Canadian companies to step up to the plate and newcomers need to think through their own goals. Those businesses that do invest are increasingly strategic in their support. Here's some advice from the experts:

1. Do your homework. The internet makes it incredibly easy to do your research on corporate prospects. Be sure to review their websites thoroughly in order to understand fiscal year end, community engagement, corporate vision and values, what they are interested in and what they support, employee voluntarism and giving cycles.

2. Adopt a business approach. Understand the audience you're addressing and follow their preferred procedure. If directions say to apply online or if proposals are by invitation only, then it's counterproductive to ignore that advice. Responsibility for the final decision will differ amongst businesses. Don't be in a hurry for their response. However, in comparison to how decisions are made in the charitable sector - where process is often the objective - the corporate world works at lightning speed. Be professional, strategic and responsive.

3. Build relationships. Staff turnover in fundraising is very high and therefore, it's difficult for corporate partners to build lasting relationships. Remember, people give to people they know and trust...even at that level. Conversely, just because you've got an established relationship with a donations officer, don't assume that the commitment is transferable to your next career move.

4. Communicate clearly and succinctly. Know what you are asking for: what you want, why you want it, how much it costs, how you'll reach your goal, what's raised to date and what the investor can do to make a difference. Don't tell the prospect about their business; focus on what they need to know to make an informed decision.

5. Demonstrate accountability. Outline what your charity intends to deliver through a corporate investment. Provide viable outcomes and be clear on mutual expectations, particularly in sponsorship agreements that anticipate an exchange of benefits. Define your objectives using the SMART approach (specific, measurable, achievable, realistic and timely). Report back even if it's not requested so you can help educate those who have yet to measure the value of their philanthropy.

6. Don't assume all corporations are the same. Even within the same company there may be differing perspectives between the donations (an outright gift to the charity) and sponsorship departments (usually drawn from an advertising budget with a built in expectation that there will be a reasonable return on their investment.)

7. Safeguard respective brands. In the case of a significant sponsorship venture, don't underestimate the value of your charity's brand; this arrangement is intended to be quid pro quo - you scratch my back, I'll scratch yours. You may want to seek the advice of your lawyer before signing any documents. Ensure you have the latest images of your corporate partner's brand and have materials vetted by both sides before going to print.

8. Steward business investment professionally. Engage your investors in the mission of your charity. Provide opportunities for businesses to witness or participate in helping those you serve. Invite donors to events, involve employees in meaningful activities, link your website to those who support your cause. Remember that most large businesses have sophisticated Public Relations departments. If you don't have the skills to speak the same language, that's another area where you can tap their expertise. Ask them to give your key staff and board members a crash course so they're not frustrated by lack of experience.

Conclusion

We're not always on a level playing field when trying to negotiate a gift from a corporate donor. The above-mentioned tips will help you prepare more thoroughly but the bottom line is the real motivator. If your charity can demonstrate how a business investment pays dividends to their shareholders then you are speaking their language.

For more information:

Creating a Corporate Giving Strategy by Cynthia Armour

Corporate Community Investment Practices, Motivations and Challenges: Findings from the Canada Survey of Business Contributions to Community

Insights for Strategic Corporate Fundraising: Further Findings from the Canada Survey of Business Contributions to Community

Imagine Canada - Corporate Citizenship

Cynthia Armour is a freelance specialist in fundraising and governance. A Certified FundRaising Executive (CFRE) since 1995, she volunteers as a subject matter expert with CFRE International. She works with boards and senior staff to ensure that strong leadership will enhance organizational capacity to govern and fundraise effectively. Contact Cynthia directly at 705-799-0636, email answers@elderstone.ca, follow her on Twitter at @CynthiaJArmour, or visit www.elderstone.ca for more information about her services.

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