Tagged: change

Capacity Building

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If we ask any of our nonprofit prospects and clients, what is there biggest challenge besides fundraising, the answer is invariably “building capacity“.

Capacity building is a broad term that encompasses “actions that improve nonprofit effectiveness”. According to a journal released by the Foundation Center in 2003 entitled “Investing in Capacity Building: A Guide to High-Impact Approaches”, capacity building can take many forms, including:

  • Professional development for staff and board members
  • Opportunities for peer learning, networking or leadership development
  • Creating or re-examining organizational plans
  • Initiating collaboration with other nonprofits
  • Developing new sources for earned income
  • Utilizing pro bono support for high-impact projects

Many of the community foundations and professional associations for nonprofits with whom we work offer numerous opportunities for capacity building- from grants directly to the organizations to bring on talent, expand knowledge and build strategy; to offering workshops, seminars and conferences from which the nonprofits can learn.

Yet we are still talking about capacity building over a decade later. If we know these things mentioned prior can work, what isn’t working?

Our firm has studied this issue for two years. We have worked with over 1000 prospective clients in trying to establish a solution set that met their needs and their budget.  We’ve heard from each of them as to what they have tried to do on their own and with help from foundations, associations and in some cases universities. What we learned was that for each one, where the process of capacity building fell apart was in execution.

Good ideas, strategy, recommendations, action steps, all are excellent in theory but will fail the nonprofit if they feel unable to execute. Some obstacles to execution are time and resources, confidence and experience, and accountability.

Of the thousands of prospects and clients we spoke with, about 80% were deserving, viable nonprofits. They have neither the resources nor the time or support needed to truly benefit from a contract for private consulting support.

after our study of this issue, we built what we believe to be a game changing answer to the capacity building issue for these nonprofits.

BLOSSOM

When we realized the scope of this problem, we thought, what if we could create a learning lab, curating the best of educational videos, podcasts, journal articles, and books, in which nonprofit executives could reliably and affordably access these tools in an online workspace, at any time. And what if we supported each learner with a private coach, who would have complete access to their learning progress in the lab, evaluating and mentoring them through assignment completion and assessments, and meet with the learner by phone, skype or google hangout once a month for 90 minutes.

And then what if we could provide an upfront assessment for the learner and the coach and learner could identify one looming key performance issue in the organization that they want to create a long term project around, affecting real time change to the nonprofits outcomes.

And finally what if we assembled six learners in a team, where they could interact, share ideas and have rich discussions around topics relevant to the nonprofit industry, effecting their organizations?

Around these assumptions we built BLOSSOM: The Virtual Incubator for Nonprofit Executives.

The incubator is a twelve month program, covering fifteen different nonprofits business topics. Learners start with an assessment on their influence style and on their organizations health. From these assessments the coach will develop leadership learning opportunities and will define with the learner their long term project. The Learner receives an online workspace that has the best of curated educational materials, tools, and templates, along with a resource library of additional information and downloadables. Learners are assembled with five other executives, for teams of six, who meet once per month online to discuss general nonprofit topics of interest. They also hold each other accountable for the progress and completion of their long term projects. The program culminates with a review of real time outcomes acheived, completion of the long term project, and a new network of colleagues and support members to continue the growth and sustainability acheived.

Early feedback was overwhelmingly rejoiceful! Yes, rejoiceful, lol!  Brilliant was one word used, Something I can really rely on for change in my organization was another phrase heard often.

We would love to get your feedback. Request access to the Free Trial Module and tell us what you think!

Email us for acccess to your FREE TRIAL MODULE

roots@harvestdevelopmentgrp.com or call us at 888-586-1103 ex2 to get immediate entry to the trial.

How to Start a Movement

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“Set yourself on fire with passion, and people will come for miles to watch you burn.”

You can’t lead movements without passion for your cause. I don’t care if your movement is for profit or nonprofit, you have to be on fire for your mission, product, service, goals. This however has much risk.

First is the risk of being alone in your passion. We are a people hard wired to belong in groups, in tribes. Seth Godin makes a great argument for that in his book by the same name, “Tribes”. Being alone requires one to be unafraid, to overcome their fears of ridicule, judgement, rejection, or attack. Being alone means bearing through the anxiety of uncertainty and the prospect of failure. Will I remain alone? Will anyone join me? Is this truth? What if I’m wrong? Being alone in your passion for your cause also bears the possibility of alienation. Look at the scripture persona of John the Baptist. He was labeled insane and spent years wandering the desert alone because very few joined his cause for a very long time. But then, he changed the world.

Secondly, being on fire for your passion requires you to inspire others. To find just the right actions to get others to join you. The risk in this is doing the wrong thing. Is there such a risk? Is doing the wrong thing a permanent fault?

Finally, being on fire for your passion can hurt. Risking your emotional well being requires bravery and piety, putting aside your own needs for the needs of the cause. And yet everyday, we are inspired by people who HAVE set themselves on fire for their cause. And there is a formula, as evidenced in this TED Talk by Derek Sivers.

The formula can be condensed into this:

  • You can’t be successful unless you are ON FIRE for your cause.
  • Passion drives performance. Feel your cause and let it move you to action.
  • Passion is contagious. Mentor others through your actions, words are a dime a dozen.
  • Have patience. Passion hears ‘no’ as Not Now.
  • Develop and deepen your faith. Trust that what you believe in will have followers. Somewhere. Sometime. If one person believes it, there ARE others.
  • Embrace your early followers and empower them to own the passion and the cause. Leadership means stepping aside to enable the growing fire to burn freely.
  • Celebrate small victories. New followers are like gold, treat them to a joyous celebration.
  • Think allow, not how. Once the fire burns, controlling it can consume you. Know that your passion has ignited a cause and it’s ultimate outcome is driven by your tribe of similarly passionate people.
  • Most importantly, be brave.

A world driven by passion is a world on fire for change.

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.

LinkedIn Board Connect

LinkedIn has brought forth another way to use their social media tool. This one is targeted specifically at nonprofit leaders seeking to strengthen and grow their board leadership.

LinkedIn’s new Board Connect, is a suite of tools, including talent finder and a LinkedIn group, that allows nonprofits to ‘advertise’ their organization, mission, vision and goals and to review prospective board members resumes. The hope is that, progressive, caring, thoughtful business leaders will be revealed through this process.

Now for the reality.

Despite many other innovative technological and social media partners considering and launching the same concept – a pool for nonprofits to jump into and peddle their wares- the ability to attract and retain high level leadership is no further advanced.

I commend LinkedIn for their effort. It does no harm, and that is the most that can be said about this endeavor. It feels good for LinkedIn and their leadership team to be doing something – anything – to help the NPO sector. It gives yet another venue for NPO’s to congregate to, in the hopes of landing those really incredible volunteers.

But like the other efforts, it offers only passive development, not active, and creates yet another large room, devoid of substance, but filled with clutter and noise, that can be overwhelming and uninviting to the audience: the prospective business leaders.

A better approach is to create a source for those business leaders interested in seeking a more vested role in the nonprofit sector, to post their interest, areas of interest(types of NPO’s, causes, role seeking) and to have that be presented in LinkedIn as a searchable database. NPO’s have clear guidelines and matrices they use in seeking out and vetting specific people to be on their board. Contrary to common belief (and the way this new LinkedIn resource is designed) it’s not a matter of any captain in the storm or any suitor interested . Board selection is a scientific, strategic process that is lead by a core objective- to secure the right person for the right need in the boards governance goals for the organization.

My hope -and I truly believe LinkedIn is intent on making this a more sophisticated, valuable tool – is that the next iteration leans more toward what the NPO needs in this manner.

 

Innovation as a Culture…..

It all started with a statistic in 2006, repeated in 2011: Two thirds of all executive directors of US nonprofits intend to retire by 2016 (Cornelius, Moyers, & Bell, 2011).

That led to a thought: Filling those positions are Gen X and Y, who work so very differently and embrace a culture of Innovation

That led to a fear: Is our industry prepared?

That lead to a revelation: We need to focus hard on developing Innovative Cultures now, in order to weather the shift.

Innovate: Verb

1: to introduce as, or as if, new
2: to effect a change in 
Merriam-Webster Dictionary, 2012
 

Innovation is the creation of better or more effective products, processes, services, technologies, or ideas that are accepted by markets, governments, and society. Innovation builds on existing ideas. It is not to be confused with Invention. The Printing Press was Invented, the Kindle was Innovative.

If our Grandparents were Inventors, then Gen X/Y are Innovators. They may not own the market on Innovation, but lead the charge and drive the process. Their Innovative spirit causes them to see work differently, and for those working in the Nonprofit Sector, and stepping into the vacuum of leadership soon to be created, that could be a challenge.

The exiting generation of Boomers tend to believe work was for life and WAS life. After all, they created the ‘workaholic’ and ‘superwoman’ concepts. The Gen X/Y to come, view work and their work life much differently. They are traditionally seen as individualistic, self-reliant and skeptical of authority. They expect great workplace flexibility. They are tech savvy and seek diverse groups. The speed and ease of the Internet  and its subsequent vast knowledge base, has led the ‘Net Generation’ of Y and Xer’s to be flexible and changing in its consciousness and with how it is communicated. We can see how this is in great contrast to the current environment of the risk averse, staid and steady world of the nonprofit.

However, we have seen some break-outs in the industry, nonprofits that have jumped the fence to do things differently, and with great results. For these nonprofits, we see that Innovation provides bold, new approaches to the way they work; they have decidedly replicated and integrated what can be learned from other disciplines; and they have provided ideas and strategies to our industry on how organizations can better foster new ideas and solutions to challenges and mission need.

Which is just the type of culture required to manage through such a massive shift in leadership, that is pending in our industry in the coming years.

What is needed for your organization to jump the fence into a culture of Innovation and to stand apart and excel in the approaching change?

Here are some simple and manageable ideas to get started.

1) Create and/or Embrace Your Constraints:

An excellent line from Marnie Webb, CEO of TechSoup Global, reflects “Innovation happens when people work within constraints — in an environment of not enough — and they figure out how to do it anyway.”  (Webb, 2011).   Well, doesn’t that just describe the EVER PRESENT environment of most, if not all, nonprofit organizations? So lack of resources, lack of time, lack of experience is a benefit and not a detriment to your Innovation.

Inspire a spirit of can do in your team: Teach them to routinely say to the world, “I know you said we can’t do this, but we are  going to figure a way that we can.”  A fun way to do this is to challenge your staff each month with one new problem to solve. It can be simple or complex, but make sure there are no single ‘right’ answers expected, and that all respondents get an encouraging word about their creativity in designing a solution. Take a look at the monthly responses and find one or two things that can be implemented from each, to make this activity actionable and inspiring.

2) Data is fuel for Innovation:

Research has had its day recently in the public square of discussion among the nonprofit set. It wasn’t until this recent decade though, that many nonprofits began to wake up to the fact that data drives exceptional performance. Metrics on outcomes of service and mission performance, as required now by grantors; benchmarks on philanthropy, collected and aggregated to drive decisions on fundraising expenditures; demographics on constituency that support political advocacy and marketing investments – all data driven for enhanced results.

Data drives Innovation as well.  How many experiments do you have currently going in your organization? What are you currently testing? If the answer is nothing, the future may look bleak for you. Testing gives you all the raw data you need to begin to get creative and innovate existing projects and services. Without it, you’re shooting in the dark.

It doesn’t matter where you start, as long as you start. Test something every week, every month and have a few tests going at the same time. Overall, testing does not significantly impact resources devoted to your project: You’re already completing the project with all the resources you have and need. Testing requires a simple tracking methodology.

A simple trial test, to get yourself and your staff acquainted with a culture of testing, is to develop a survey used with every donor/donation received. The survey can ask some common demographic questions, but also some quirky ones:  What color would you paint your car if you could paint it any color? What did you want to be when you grew up? What’s your favorite treat food?

The resulting data can be a rich playground for your team to get creative. What if more than 75% of your donors said Popcorn was their favorite treat food? How could you use this information to better your appeals, raise more money, sign up more volunteers, get more people to your programs? You could also take that quirky data, create an info-graphic and share with your constituency, giving them all an intimate look at the tribe they are part of in supporting your mission!

3) Free Access, Embrace Risk:

Let your staff play. Open up their access to the internet, create an environment of walking around to work, withhold judgement, encourage impossible dreams, create shared spaces for interaction. Let go of your organizational fear, and strict fence posts, and let your staff bloom! Additionally, inspire and ask you constituents and donor base to get involved. Create spaces for shared ideas, allow your donors to see their own giving histories, to watch projects unfold and to openly track progress of service delivery and program development.  Yes, even the warts and the odd parts.

Try this for one month: Using a cloud based program, like Dropbox or Google+, create a shared folder or a group for idea generation. Invite staff, board, donors, clients, to get involved. Post a problem or question of the month. Then encourage everyone to drop a comment. People love to give their feedback, so encourage that sharing on your real issues. Why not start with this question: What one thing would you change about us? Interact with the group, asking further questions, exploring responses, challenging perceptions.

4) Allow process, iteration, pivoting. Don’t kill the messenger or the message – massage it.

If you don’t give Innovation the time and attention it deserves, it will not produce and it will not gel as a culture. There are no bad ideas, only ideas which have not matured yet. Like a fine wine, an idea becomes innovative after taking some time to develop. Too often we rush to judgement on a solution, concept or strategy. Keep all ideas generative and don’t lose any along the way. Pop them open every so often, encourage follow through and push back on development on those that look promising or have some immediate potential application. Use data to tweak them along the way and send them out for more testing. Turn them over, look at them differently.  One of my favorite examples of this is asking the question: How is your_____________  like a ________? For instance, “How is your Nonprofit, like a Toaster?”.

5) Be sincere

Finally, don’t offer lip service on Innovation. It knows when you are lying and it knows when you are passionate about serving it well. Innovation is not a tactic, or a business management style. It is truly a culture, one which can only come from authentic, inspired and patient nurturing. Making it part of the spirit of your organization will yield powerful results.

How a gift to someone else, can be the perfect gift for your Dad

Dad’s, at least the Dad’s of my generation, had two jobs- Earn an Income and Make Pancakes on Sunday Night for Mom’s night off.

The first we knew represented his RESPONSIBILITY to his family.

The second we knew represented his LOVE for our mother and for us.

There never seemed anything we could do to repay  him.  There wasn’t a tie nor trip nor lighter nor ballgame ticket which could ever- EVER- be as valuable as what he gave and sacrificed and provided for our welfare, spirit and education.

And so maybe we stop trying. We give up on the gifts and just purchase a card. Or maybe we continue to maniacally hunt down JUST THE RIGHT THING, in a blind, ambitious desire to give him something that comes close to saying Thank You.

What Dad was doing was not only loving and nurturing his wife and his family. He was passing down years of learned respect and responsibility, he was educating us on what Fatherhood really means, he was mentoring and coaching a future generation to prepare them for the same offering of self that he so willingly provided, in love and in gratitude for all he was given.

And believe me, he doesn’t want a present for that. What he wants is to know that all of that good stuff has been passed on, that it continues and grows and moves beyond his years to others.

So this year, give him what he deeply desires, by supporting a nonprofit “Fatherhood Initiative” .

Fatherhood is not DNA encoded. It is not something every boy is born knowing, and sadly many do not  experience  in their short lifetime.

But it CAN be learned. And it CAN be shared. And it will live on through the noble work of these organizations and more.

Here are some to get you started. And when you give, give generously as Dad did, from your need, not your excess. And then say Thank You Dad.

                                 

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