Topic: Research

What is new is not always relevant. What is relevant is not always new.

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Crowd Funding PBS Special

PBS has been blogging about crowdfunding – the practice of funding a project or venture by raising many small amounts of money from a large number of people, typically via the Internet   – and their latest post engages nonprofits in thinking about the significant opportunity for financial success in crowdfunding.

From PBS’s post:

“The need for alternative fundraising methods clearly varies a lot across organizations. But even comfortable non-profits accept that crowdfunding has the potential to deliver a deep engagement between fundraisers and backers. And, as emergent civic crowdfunding models suggest, it has the potential to produce new alliances”

The post goes on to highlight success stories in the the crowdfunding sphere:

“In April, the Chicago Parks Foundation raised $62,113 for the expansion of the city’s Windy City Hoops basketball social program on IndieGoGo.”

” The Long Now Foundation is using this model for its Salon campaign, which has raised just over half of its $495,000 target. “

The post ends with this note of validation for many nonprofit’s marketing savvy and the opportunity to leverage that expertise for crowdfunding success. “Many non-profits are established experts in these areas. Many of them have stronger and more-established brands than even the best-known crowdfunding platforms. The quality and scale of crowdfunding campaigns would undoubtedly increase if they decided to apply their expertise to the field.”

While I appreciate what these types of articles do for innovative thinking, when they are sent out into the npo-sphere such as this, with no context to the implementation or integration of such a strategy into a broad range of tactics, it sends most charities desperate for money on a wild – and often disappointing- goose chase for their tens of thousands of dollars from ‘the web’. At best this is a distraction and a waste of resources which could go toward raising real money. At worst, it could be the straw that crumbles an already ailing organization.

In reality, what is new is not always relevant. What is relevant is not always new. Basing revenue development on scholarly data and best practices is essential to helping our nonprofits prosper.

WHAT DO YOU THINK?

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Shaping the future of philanthropy

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Shaping the Future of Philanthropy

From the Foundation Center, this series is interesting and provides insight into the next generation of philanthropists: young people from families of wealth. Despite my misgivings listed below, it is well worth the time invested in listening to the series.

It misses the mark in my opinion on two fronts- it focuses too narrowly on the next generation of philanthropists from a very small slice: those families already heavily invested in philanthropy. I would argue that many leaders of the next generation will find their own path in philanthropy and I would want to know their thoughts as well.

Secondly, it is disappointing in who they interview….. many of these individuals are not necessarily the key age demographic I would position as the next gen of philanthropy. I had hoped for a younger crowd, but many leaned more toward 40 years old.

However, its a start! I suggest listen to this one and then migrate out to the website at Grantcraft.org  to hear the remainder of the podcasts.

SHIFT: Meeting Corporate Philanthropy Where It’s Headed- Key Behaviors in Successful Corporate Partnerships

Key behaviors of successful NPO / Corporate partnerships

Continuing our series on Corporate Philanthropy, we take a look at what the key behaviors are that we see in  nonprofits who have developed partnerships that provide a strong, reliable and renewable revenue  stream?

1. They all have a Personal Relationship with the company leaders: As a personal investment, the requirement that we build meaningful dialogue and a unified voice in our efforts to identify opportunities for partnering is essential.  A relationship with our company partners is not a mail campaign.  It’s not a sponsorship pitch.  It is the same level of personalized cultivation applied to our individual major donors.

Getting to a partnership is a process. The flow from first connection (usually a gift of some sort) through partnership generally follows this route:  Transaction —–> Relationship—–> Information——> Partnership.   The relationship traditionally begins with a transaction of some sort: a sponsorship, a membership, a donation, a grant. Capturing the interests of the corporation and appropriately acknowledging and stewarding their generosity, a relationship is developed, where information is shared that further delineates the opportunities and shared values/goals of the two parties, which leads to a partnership.

It’s essential that you get comfortable with building personal relationships for funding or partnerships with your corporate donors. It’s crazy to even have to say that, but many fundraisers we have worked with are intimidated or lack dedication to the relationship building process.  Having a personal relationship with your corporate donors is the most important thing you can do to succeed.

2. Value proposition: Your Value Proposition is a definition of the key benefits you provide to the corporation, as a potential partner. Your client base, your donor market, your organizations core values, where do you operate, what is your brand, who do you influence?  These are value positions used to negotiate what is needed- cash, people, advocacy. Your Value Proposition is not what you do. Let me say that again: VALUE PROPOSITION does NOT equal WHAT YOU DO!

As evidenced in some of the past video and case examples, Nike and others did not partner with the chosen NPO’s because of what they did. What they did was important. And the outcomes were essential to the decision. But the value proposition of those organizations was the quantitative factors they bring to the table: who do they reach? who gives to them? where are they located? what community do they serve? What does their organization represent to the community?

Taking a value inventory will be critical. You can do this internally amongst your staff in a brainstorming session, or you can hire a facilitator to help in the process. Either way, having a very solid knowledge of  your value proposition is essential to successfully identifying and selling your organization to the right corporation for the right partnership.

3. Trust:  This is huge.  We think we know about trust, but in this sense we mean total and complete transparency, clear communication, and fulfillment. Trust is built slowly over time, as a friend recently reminded me. Its not an all or nothing position and it is only bestowed upon you or anyone incrementally with some consideration and time. It is also impermanent, it can change with the tide. Your organization must provide the framework within which that trust can be built with the corporation.  It may mean sharing challenges that you normally would not be compelled or comfortable in sharing about your programs and funding. If it knocks you out of the competition for the companies attention, so be it; better to have it done now, than after you have spent considerable time, resources and energy in building up the relationship. Trust also requires promises to be fulfilled. If you said you would do something with the funding, well you better have at it and show the results.  Things do happen that not goals off course or missed, but the frequent and candid communication you are engaged in, while building trust with your corporate partner, will have taken that into account.

4. Commitment: You know what they say- In breakfast, the chicken is involved, but the pig is committed.  Your commitment to long term strategies requires your organization to have a vision and a strategic direction. Commitment is not chasing the money; it is building on and resourcing the programs and services essential to your success. Nonprofits who have successful corporate partnerships have mission strategies that are imbedded in their DNA, they are clear and concise and tactical. They are committed to the outcomes, no matter what.

Following these four foundational behaviors will position your organization to be prepared for a myriad of corporate funding partnerships that provide long lasting benefits and outcomes.

NEXT POST: Developing a plan for your own corporate partnership program.

SHIFT: Meeting Corporate Philanthropy Where It’s Headed- Corporate Goals in Philanthropy

What do Companies want from their Corporate Giving?

While a market presence and position is always a number one consideration for business, as they play out their social responsibility in the community, it isn’t necessarily the only factor behind their engagement. It’s important we are aware and respectful of all the driving interests, if we are to develop winning corporate partnerships.

Business benefits top the chart of priorities –

McKinsey & Company, a 75 year old management consulting firm which serves over 70% of the Fortune 500 companies listed today, surveyed 721 executives around the world—74 percent of them CEOs or other C-level executives, about corporate social responsibility. You can find the complete report here.

In their survey, McKinsey found that the vast majority of companies surveyed—nearly 90 percent—seek business benefits, such as customer acquisition and product distribution, from their philanthropy programs.

And some 80 percent of respondents say finding new business opportunities should have at least some role in determining which philanthropic programs to fund, compared with only 14 percent who say finding new business opportunities should have no weight.

So, marketing drives philanthropic partnerships… well, not so fast.

While marketing is an important driver, it should not be the sole driver or lead the development of a partnership between you and the corporation you are seeking to join forces with, as doing so may leave your reputation in question and will certainly not do anything to enhance business benefits for the company. Todays consumers are savvy, much more so than ever in history. For the marketing line to work in corporate/nonprofit partnerships, the relationship with the cause has to make Sense, it has to have Value and be Comprehensive and it has to have a Meaningful Outcome. The cures for cancer that exist which have spawned an ever growing trend of “Pink Washing”, is evidence of the many partnerships that just DON’T make sense  and result in outcomes that are anything but positive and customer building:

Remember “Bucketgate” May 2010? This drew much criticism and debate when it launched around Mothers Day.  Poor KFC, while they thought the pink would bring them notoriety, they didn’t expect the kind they received. And while any press may be good press, this just didn’t make sense, in any remote fashion. And the consumer saw right through it.  Sadly, Susan G Komens’ judgement and incentives were questioned as well.

If business benefits are a leading factor in a company’s drive to develop NPO partnerships through their giving, and pink buckets of chicken are the anti-concept, what does a philanthropic/socially responsible partnership look like?  Take a look at what might be a plausible and valuable brand and marketing position, from Nike.  The Nike Foundation created the ‘Girl Effect’ with critical financial and intellectual contributions by the NoVo Foundation and Nike Inc. and in collaboration with key partners such as the United Nations Foundation and the Coalition for Adolescent Girls. Here is their introductory video. What business benefits might they be seeking in support of this cause? What new business opportunities are they building? How does this make sense?

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Not to be a KFC basher (I’ve eaten my share of chicken), but do we see the difference? This program does not appear to have the ‘slap it on a bucket’ approach of KFC. This philanthropic/socially responsible partnership ensures that market is not the key driver, but an integrated aspect of the partnership Nike has developed.

Local Impact is a close second in priorities for driving decisions on philanthropy

Executives overall say their companies are much likelier to address a broad mix of local issues with their corporate philanthropy programs than to address the social and political issues that they expect will affect shareholder value the most. In addition, interviews conducted suggest that companies see addressing local community needs as an indirect way to highlight a company’s good intentions to groups such as board members, shareholders, and regulators.

Chase Community Giving is an excellent example of a corporate giving program that was developed to have local impact. And in an interesting twist, Chase has combined their local perspective with crowd-sourcing: allowing the community to choose the charities which Chase will support.  By having the community vote on their charity of choice. Chase is empowering their community to lead their philanthropy. What is interesting about this, is that it make a case for and support the concept of, nonprofit accountability. If your NPO is not relevant in your community, if your community does not know about, care about or support your work….if you’re not doing good work and reaching meaningful outcomes- then you’re not a contender for Chase philanthropy. Their vetting process for impact is knitted into their philanthropy program.

Employee Base needs is the third critical goal of companies in their philanthropic giving –

Respondents in McKinsey’s survey most often cite employees as the stakeholder group important to the way companies think about their roles in society and as the group companies most often address with corporate philanthropy programs.

Employee satisfaction, retention, recruitment, all are critical business factors to corporations. By aligning their philanthropy with their employee base interests, they develop efficiencies in both lines. Often a company will have employee driven efforts, special programs which only employees can access for philanthropic engagement, pooled funds from employee activities, volunteer efforts devoted to employee outreach to the community and more directed at the interests and activities of employee groups.

A Recap –

The goals most often cited by corporations in their corporate giving strategies— 1. business benefits: enhancing brand, market reach; 2. working locally; and 3. building employee capabilities, improving employee recruitment and retention, all must be factored into the developed program you are building with your prospective corporate partner. If your program offers all three, its the trifecta of a corporate partnerhsip.

Who are the innovators?

Lets take a look at two award winners from the Committee Encouraging Corporate Philanthropy’s Corporate Philanthropy Day 2010. As you watch this, try to capture as many of the goals and key outcomes we just discussed, in the programs these two innovators have developed.

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Pretty comprehensive right? And I can guarantee these were not created in a marketing office, but were organically developed between the company body and the nonprofit they had the closest relationship with.

SHIFT: Meeting Corporate Philanthropy Where It’s Headed- Corporate Social Responsibility

What is Corporate Social Responsibility?

And more importantly, why is it an important part of our conversation in discussing our relationship with corporate partners in philanthropy?

The reality is that Corporate Social Responsibility is an emerging field. It is a very broad and evolving area of development for corporations and not for profits alike, a new terrain for which maps are much needed, but often are imprecise.

It has a complexity that is only seen in the emergence of new ideas and systems , a nucleus of thoughts, practices and evidenced based studies that are lending to the defining structure that it is becoming, following along the lines of chaos theory.   To a corporation, Corporate Social Responsibility (CSR)  has a multitude of components, too many to review in this one small post.  Its concept and its practice is complex,  often disjointed and, currently, most often reactive.  Divergent views and information overload is nowhere more apparent than in the field of corporate social responsibility. Each company is different, each with its own challenges, corporate culture, unique set of stakeholders and management systems. Each with its own view and opinion and strategy.

But amid this swirling pool of CSR anti-matter, certain agreed upon norms and standards are being established. The World Business Council on Sustainable Development makes this statement on defining Corporate Social Responsibility:

Corporate Social Responsibility is the continuing commitment by business to behave ethically and contribute to economic development while improving the quality of life of the workforce and their families as well as of the local community and society at large

And this from an MBA textbook on defining corporate social responsibility:

Corporate Social Responsibility  is the decision-making and implementation process that guides all company activities in the protection and promotion of international human rights, labor and environmental standards and compliance with legal requirements within its operations and in its relations to the societies and communities where it operates. (Lehigh University, College of Business and Economics)

Two very nearly similar definitions. We are getting close to a commonality of expected beliefs and outcomes, among everyone involved in defining CSR.

Despite its complexity most corporations practicing a CSR culture, administer and measure their CSR programs along these three areas:

External Business Practices: How the corporation does business.  Who they compete with, who they partner with, their supply chain, their products, their distribution lines  and the impact their business has on society.

Internal Business Practices: Their corporate governance, their corporate policies, investments, ethical balance structure and the impact their business has on their employees

Impact Partnerships:  How they respond to societal issues that specifically impact their business practices, both internal and external and who they partner with in doing so.

Secondly, most corporations will agree that the measurement of these are based on three bottom lines:  Financial bottom line outcomes, Environmental bottom line outcomes and Social bottom line outcomes. This is called the triple bottom line.

Defining 3BL

For our role, as nonprofits seeking to shift our approach in securing corporate funding, it is essential to know and understand the core concept, terms and definitions on CSR as outlined here. Our ability to engage in an educated dialogue about our partners corporate social responsibility is critical to our successfully defining a partnership that meets both our and their needs.

CSR HISTORY

Let me take you through a quick history on corporate social responsibility. Some may think it’s a new idea, a fad or a recent breakthrough in thinking. But it goes as far back as the late 1800’s. Evidence of corporate socially responsible practices among industrialized corporations can be found in some of our most familiar company names. For instance, take the Sears Roebuck Company, a company that was near bankruptcy when Julius Rosenwald, joined the company in 1895.

During his tenure as vice president, treasurer and then president, Rosenwald grew the company from a failing $750,000 a year corporation to over $50 million.  As part of his growth plan, Rosenwald invested a lot of Sears’ money into society, specifically agriculture. Rosenwald understood that the growth of Sears Roebuck was wholey dependent on the growth and wellbeing of the company’s customer- the American Farmer and its field hands. And so he invested in his company by investing in his customer, through their societal, educational and family needs.

Why Rosenwald did this was not ‘termed’ corporate social responsibility until 1953 with the publication of  the book ‘Social Responsibility of Businessmen’ by economist and college president Howard R. Bowen.

But still the term languished, without much fanfare for about a decade, until the phrase was reinvigorated in the 60’s and 70’s around the time when big international companies faced anti-corporate sentiments because of environmental and human rights issues. In fact, companies faced large scale boycotts of their goods and services to force change among corporate practices affecting society and the environment.

Through the 80’s discussion of the concept of CSR grew. During that time, most socially responsible behavior was positioned as a philanthropic activity based on a company’s fixed budget that was allocated to support nonprofit organizations – mostly doing so to “look good”. These funds were sometimes allocated to many organizations  with the idea that to satisfy as many interest groups and to gain as much visibility as possible was a beneficial goal. The commitment was usually short term and restricted to making donations that were heavily influenced by the wishes of the senior management of the organization, and mostly to bring about a marketing position through brand awareness at nonprofit events.

Then in 1989, Ben and Jerry’s distributed the first ever Social Responsibility Annual Report. People took notice, because it authentically calculated Ben and Jerry’s  business practices and policies that lead to meaningful outcomes for society and the environment and to bottom line financial benefits to the company and the communities it supported.

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Academic exploration, corporate research and charitable interest in CSR began to escalate at a rapid rate. In 1992 the Earth Summit in Rio was a key moment in the evolution of CSR. At this Summit, it was reported that “the level of corporate involvement in the summit was unprecedented, unlike anything ever seen before, with a coalition of 48 companies coming together to establish a new coalition, the Business Council for Sustainable Development (BCSD)”. This coalition placed the academic and financial exploration of  CSR culture on the map in a way now other group or company had been able to do before. The BCSD would later become the World Business Council on Sustainable Development (WBCSD) which continues to be an authority in CSR and have tremendous influence on the corporate social responsibility stage.

Since that time, corporate social responsibility as an essential and important business practice has moved from discussion in the cubicles of most corporations, to a presence in the board room and a position on the balance sheet of almost all company’s large and small.

SHIFT: Meeting Corporate Philanthropy Where It’s Headed- Influencers: NPO

INFLUENCES ON THE NOT FOR PROFIT SECTOR

The recession was a wake up call.

Many nonprofits were left high and dry when their sole funding stream, gov’t line items, grants or contracts, began to disappear. Many scrambled to pressure the feds, others sought funding elsewhere. Some sadly closed up or, if they were lucky, merged with a similar organization.

Relying too heavily on one form of funding is a death knell. Diversifying funding is essential to nonprofit sustainability. In the recently released 2010 Nonprofit Fundraising study by the Foundation Center, organizations raising over $3MM annually did so because of their diversified funding streams. Over seven different funding vehicles were used by over 73% of those in the $3MM plus group. How many funding streams are you accessing right now? Corporate giving is an important part of those streams.

Another influence on nonprofits, peeking their interest and attention toward new corporate philanthropy, is the overwhelming BUZZ on corporate social responsibility, which has not been missed by these organizations. This is making them question their approach and strategy and reformulating to meet the new corporate perspectives. Additionally, many nonprofits are now finding themselves being denied funding from previous corporate partners, many of whom they relied on for significant help, because the companies in question are realigning their giving in a more unified and strategic fashion with their CSR model.

Finally,  bad information being disseminated and lack of research on corporate giving among the nonprofit sector has a negative influence on our thinking and planning.  Corporate giving is not about marketing.  Neither is it influenced by an ‘obligation’ the company feels to society.  And if we went off and approached our corporate partners with this in mind we would be dead in the water before we got to the closing statement.

It is an investment, not an obligation; a partnership, not a market approach. And it is directly tied to their business goals.

Up tomorrow: Defining Corporate Social Responsibility to understand process, policy and approach

SHIFT- Meeting Corporate Philanthropy Where It’s Headed- Influencers: CSR

THE INFLUENCE OF CORPORATE SOCIAL RESPONSIBILITY ON CORPORATE GIVING

You’ve heard me use the term Corporate Social Responsibility (CSR).  It is the increase in the number of corporations attemping to define and implement their CSR that is also influencing corporate philanthropy.

Corporate Social Responsibility is not a new concept. It actually has been an ‘activity’ of corporations for over 100 years. We’ll explore its roots a little further into this series.

But it is the phenomenal growth of CSR over the last twenty years, both in number of companies embracing its tenets as well as companies creating a more deeply integrated CSR strategy in their business model, which has been a driving force in the way corporations are defining and implementing their philanthropic activities. Essentially, CSR is a strategic shift away from ‘giving to’ charities, toward  ‘investing in’ opportunities with charities, opportunities that align with their business goals.

What used to look like this: A corporation giving in a variety of ways to a variety of causes that were defined primarily by societal and community pressures…



Begins to look more like this: a turning inward to investigate the corporations basic social, brand and financial benefits and then identifying a unified cause that aligns and supports beneficial outcomes to those measures.

Does this mean there is less for us?

Absolutely not, the amount of corporate giving is increasing, its just the segments in which we will be viable partners are different.

Hear from Jerry Lee, co-founder of Newton Running, talk about his desire to express social responsibility through the vision and mission of his companys philanthropy.

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Up tomorrow: Influences on Nonprofit Organizations in seeking more sustainable corporate funding.

SHIFT: Meeting Corporate Philanthropy Where It’s Headed- Influencers

THE INFLUENCE OF BUSINESS CRISIS ON CORPORATE GIVING

You may recall that BP nearly wiped out the Louisiana and Florida coasts last year following the Deepwater Horizon oil disaster. Over the course of weeks over 200 million gallons of oil spewed into the Gulf of Mexico. The disaster may have been one of the worse ecological assaults in history.



Ultimately, BP was assailed but not defeated by the oil spill. Their stocks plummeted, protests and boycotts ensued, heads of divisions lost their posts.  But BP weathered through, their stocks rebounded and their reputation is slowly and delicately on the mend.

In their favor was over 25 YEARS of brand management through Corporate Social Responsibility. At a Corporate Social Responsibility Conference at Boston College Center for Corporate Citizenship in the early 2000’s, BP was a highlighted  speaker and won awards for their ecological philanthropy programs. We might laugh now, but that investment saved them from collapse.

The need to build emotional trust, a bank account of goodwill with society, is an important strategy in corporate governance and a significant influencer on a corporations philanthropic efforts. This bank of trust will allow the company who has been the cause of, or has exacerbated, a crisis, to make withdrawals and weather it through.

Bad business will happen, and that knowledge drives corporate giving.