by Don Murray
Edited Digest of FundClass Topic #38, March 28 - 30, 2006
Don Murray, who has led not just one, but two previous FundClass sessions on this same topic. See the archives for Topics #21 and #7:
Don is unusual in that he understands not only the nonprofit world in which he works, but also the business world, and has been especially successful in finding ways for the two worlds to work together.
Don Murray has been a senior nonprofit executive for the better part of twenty years. An industrial accident in Anchorage claimed the life of Don's 27 year old son in 2002, prompting Don to return to his longtime home in Alaska from sunny South Florida. Don says that he has spent the past three years healing and is now ready to return to the warm weather of Florida.
Most recently, Don has been the Executive Director and CEO of a statewide nonprofit agency serving senior citizens and school-age children throughout Alaska. Prior to that, Don has a long history in the children and family area of social service agencies, running residential programs for sexually abused children for Boystown and other, similar organizations.
Don is in the process of returning to Florida in April where he will begin his new responsibilities as Florida Regional Director for MADD in Tampa. We are grateful to him for fitting us in during this busy time.
For the next few days, we will be discussing the various ways in which organizations may seek and nurture corporate relationships for mutual benefit.
Yes, I said MUTUAL benefit!
Corporate relationships have the ability to provide a number of valuable resources to non-profits, not the least of which is money. They may also provide other resources that have equal value and perhaps even a greater value than money. Such things as donated man-hours, expertise, in-kind contributions and additional credibility for your organization are among the many benefits of a successful corporate relationship.
As the discussion moves along, I may use the term "corporate partners" when discussing this group of potential givers and I encourage you to think of them as potential partners in your efforts.
The way that your organization pursues a corporate donor should begin with an understanding that there is one major difference between soliciting a corporate donor and the solicitation of any other group or individual. That difference is the understanding that a corporate partner rarely participates solely because your organization presents a good case or because you have a "good cause." While your presentation and cause are important, the decision to write a check or commit valuable resources to your organization is rarely made because of some emotional appeal. I submit that these decisions are business decisions which, in some way, enhance their image or add value to their bottom line. Such things as politics and public relations often factor into the decision to become involved with your organization.
The corporation's ability and decision to "give" and their philosophy surrounding community relations is driven by upper level management. The decision to give to a particular organization often comes down to which of the three or four "worthy causes" is properly positioned and offers the "biggest bang" for their buck. Many large corporate entities take their charitable donations directly from their "advertising/public relations" line items. While they may not openly discuss this topic, these folks consider the "bang" as if they were purchasing advertising. For example, if approached for support of a golf tournament sponsorship, they will often ask about what sort of media coverage is anticipated and how many times and where their name will appear on printed material and on the course, etc.
As with any approach to a donor, you should do an appropriate amount of "homework" to see if your prospect is a likely candidate for what you have in mind. Any history of their giving patterns as well as guidelines should have been determined before your first meeting.
Before an approach is made, be sure that you put your best foot forward. Prepare your presentation in advance and be prepared to answer a number of questions about your organization and your cause. Understand that they may be discreetly looking for how a relationship with your particular organization offers them some benefit. Such things as media exposure and the ability to interface with your Board of Directors may be appealing to them. It is very important to personalize your approach to each organization. Your approach should reflect the "homework" that you have done on that organization.
Once an initial commitment has been made to your organization, this relationship must be continually nurtured. Let me also say that you should continue to nurture a relationship with those organizations from whom you have NOT received a commitment (even more important).
The number one principle of Acquiring and Maintaining Corporate Relationships is realizing that this is a RELATIONSHIP. Relationships require nurturing and tending.
Let's begin to discuss the ways in which we should identify potential corporate donors and what sorts of things each of our organizations may have to offer to induce an ongoing relationship.
First...why do you think that corporations would want to contribute to a
Second, how might you imagine that an approach to a corporation may be different from an approach to an individual?
Response: Tom W.
My sense (and stats I have seen) is that there are two "types" of corporate "philanthropy," and that one type is diminishing while the other is on the increase.
The purely philanthropic motive for corporate support of nonprofits, typically deriving from corporate foundations, seems to be on the wane. This makes it harder for nonprofits whose mission performance cannot "deliver" a desirable demographic to the corporation, e.g., a low-income health clinic.
The increasing type of corporate support derives from and flows through marketing departments and positions the receiving nonprofit among the corporation's "marketing mix" components, right along with advertising, free samples, PR, rebates, and all other tools a marketer employs. With few exceptions, the main determinant as to which nonprofits are selected to receive this "largesse" is whether or not the demographic group(s) which will be reached by the nonprofit is aspirational (desired) for the corporation.
Basically in the newer, increasingly dominant corp philanthropic mode, the corporation hopes to leverage the goodwill/community position enjoyed (and often hard-earned) by the nonprofit into a beneficial association with the corporation in the customers' eyes.
An approach based on these assumptions would then be based much more on demographic information generated by the nonprofit than by an appeal based on "warm and fuzzies". "Here, Corporate Decision-maker, is what we know about our constituents/clients.....they are just the people that your corporation would benefit from reaching. Your dollars (or in-kind or whatever) would result in this level of exposure to this many people, etc..."
Don Murray's Response
Tom...so, in a nutshell, it's a "what's in it for me" attitude from the corporations rather than wanting to achieve a warm and fuzzy feeling? Yep...you nailed it, exactly. Any other comments from anyone?
Presuming that Tom is correct (and he is) how might a non-profit's approach to a corporation differ from an approach to an individual...or a foundation?
Response: Dinsmore F.
Not much. However, if you can't position your 'natural' demographic as desired (HIV positive folks to most corporations? Please!), you can try for some of your other stakeholders. When I was with a local Planned Parenthood affiliate, corporations wanted the folks on our Board and Advisory Council to know that the corporation supported the organization (and sometimes even wanted to do so anonymously). Small businesses, on the other hand, were often proud supporters…
Questions: Gary G.
1) How would you articulate the line between corporate philanthropy and a partnership that is not philanthropic. Is there a kind of test you put it through? And do you find that organizations are paying enough attention to this distinction?
2) My second question is about staffing corporate giving. Some major donors give through their company, and we major gift types might not want to turn the relationship over to another person just because of how the check was made out :-). Corporations also work with events fundraisers for sponsorships, and may work with marketing staff or others. What have you found is the best way to manage this? Case-by-case? Pull it all within a single person as a general rule? Or encourage a team approach with all stakeholders involved?
Don Murray's Response
Gary, I'm not exactly certain what you had in mind when you asked about defining the difference between a non-philanthropic relationship vs a philanthropic relationship. Perhaps you had in mind a corporation who provides assistance in the form of manpower or services. If that is the case, then I would consider a gift of time or resources as a philanthropic gift. If that is not what you envisioned, please feel free to ask again and I'll take another swing at it.
With regard to your question about a major donor that "gives through their company"...then the originator of the gift, regardless of the path traveled to reach the non-profit, should be considered as the donor and handled appropriately. If the corporation then matches the employee's gift, then you obviously you would have two donors to manage.
You also asked an excellent question about managing a corporate gift in support of a fundraising event. I always try to swim upstream, as far as possible to determine who, within the corporation, authorized the gift. While there are often many players involved, one must be certain who and how many folks, within a corporation, actually make funding decisions. In many cases, it is often more than one.
A single contact person within a non-profit is cleaner, when possible. Unfortunately, I have been the victim of my own Development Director's "assistance" on more than one occasion. While well intended, having more than one person managing a corporate giver can present challenges.
Response: Gary G.
Thanks. That's very helpful. Sorry for not being clearer in my question on philanthropic v.non-philanthropic relationships. I was thinking about contributed revenue v. non-contributed revenues.
I know that at some point a company may get so much back from the not-for-profit that it's no longer a gift, but a contract, maybe for joint marketing and promotion. They can establish exclusive rights (like sole sponsorships or endorsements that prevent the organization from giving similar benefits to a competing company). I've seen large "deals" with companies that have a number of components; we'll give you $X outright for your mission, and $Y to create an awareness brochure with us as the sole sponsor, and $Z for the exclusive right to use your logo in our marketing.
Don Murray's Response
I think I see what you're talking about. Something like the naming of a stadium or event venue might fall into that category. Many of can only dream of those problems!!
Response: Gary G.
I wasn't thinking so much about the scope. One example, is it still non-contributed revenues if one sells to a company the exclusive rights to use their logo? Or can that still be treated like a gift? Another example--suppose a company made a "gift" to MADD to conduct educational seminars for their employees, where that's not inconsistent with the nonprofit mission, but is close to being more of a service, albeit revenue generating.
At my organization, we've sometimes distinguished between a philanthropic gift and other ideas for generating income in exchange for what we might offer a company.
Don Murray's Response
Thanks for the clarification. Your questions seem to fall into the dark, scary, vast regions of IRS law. For questions in that area, my best advice is to connect with a lawyer or CPA who is intimately familiar with IRS language and interpretation. That's WAY outside my area. Perhaps we have such an expert lurking in the class. Any takers??
Question: Liz B
To piggyback on Gary's first question (or maybe it's the same question), when do you approach the marketing division of a corporation vs. the charitable/community relations dept.? Can you shed some light on this?
Don Murray's Response
Good questions, Liz. I tend to think of corporations as "people" rather than departments. I say go where your best, most influential "people" relationship is. If you don't have any existing relationship, reach as high as possible. That's the philisophical answer. More specifically, my experience has demonstrated that no two corporations operate in the same way. If you have a warm relationship at the CEO, CFO or some other significant level, go there and the rest of the corporation will follow. I believe that working toward a high level relationship is alway best. For example, walking into Walmart, grabbing one of their grant forms from the customer service counter and submitting it through channels may permit a harvest of $1500 dollars. On the other hand, knowing someone at Walmart Corporate Headquarters may provide a significantly more fruitful result. Don't be afraid to reach high. Now...that being said, one must be certain that one's organization is "worthy" of such lofty aspirations.
If your interest in corporate giving is piqued, and you would like to read more on the subject, go to the FundClass archives:
http://www.fundraisersoftware.com/library/fundclass/ and view:
Topic #7: Corporate Giving
Topic #24: Attracting, Securing, and Keeping the Corporate Gift