This week my colleague Angie Stapleton kicks off February with a focus on companies and corporate giving. How does your nonprofit position itself with corporate donors? Do you have a written annual strategy with staff dedicated to company fundraising, or are companies a constituency you have yet to focus on? In this article, Angie sets the stage for us to think about companies and their impact on philanthropy – and our nonprofits – today. ~Helen

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The national conversation on ultra-high net worth individuals (UHNWIs) and their role in philanthropy is beginning to shift. As we’ve discussed on this blog, a wave of critiques on traditional philanthropy – including Anand Giridharadas’s Winner Take All or Rob Reich’s Just Giving – have begun to impact public debate about effective philanthropy and the greater good.

While most of these discussions have centered on UHNWIs and individual giving, it has also cast renewed interest on the role corporations play in our society and their giving – also known as their Corporate Social Responsibility (CSR).

For the past few decades, the premiant philosophy on corporations was that their sole purpose was to maximize shareholder value. However, in the past few years, we have begun to see a shift in how the wider public views – and therefore interacts with – corporations.

As BlackRock CEO Larry Fink said in his most recent annual letter:

 Companies that fulfill their purpose and responsibilities to stakeholders reap rewards over the long-term. Companies that ignore them stumble and fail. This dynamic is becoming increasingly apparent as the public holds companies to more exacting standards. And it will continue to accelerate as millennials – who today represent 35 percent of the workforce – express their CSR expectations of the companies they work for, buy from, and invest in.”

A large portion of public discourse on corporate intent lately has centered on the imbalance of profit and wage growth but there is also a growing movement towards the better management of environmental, social and governance (ESG) issues and more traditional social responsibility and community giving.

Perhaps in response, the past year alone has seen a number of ultra-large corporate pledges…

• Google announced a $1 billion, five-year effort to benefit education, economic opportunity, and inclusion efforts – and has already dispersed $100 million of that to education and job training.
• JP Morgan launched AdvancingCities, a $500 million, five-year initiative to drive inclusive growth and create greater economic opportunity in cities across the world.
• Patagonia (my favorite!) plans to give the $10 million it received through recent tax cuts to benefit groups committed to protecting air, land and water and finding solutions to the climate crisis – in addition to their already-stellar CSR initiatives.

And these are just a few!  In 2017, corporate giving reached $20.77 billion with an expected increase in 2018 (numbers not yet available).

So, are we seeing a new wave of corporate consciousness and philanthropy? Man, I sure hope so! And if we are, what does that mean for our fair philanthropic community? How can we better prepare ourselves – and the organizations we love – to be ready for a larger focus on corporate contributions?

Becoming “Best Buds” with the Business Section

CECP’s 2018 Giving In Numbers report shows that, of the businesses they surveyed (250 of the most well-known businesses in the US), most gave through corporate cash gifts.

For those that gave through a foundation, just under half were pass-through foundations with another 20% being a hybrid of endowed and pass-through. This means that how a business is doing financially matters.

As researchers and strategists, it is of vital importance that we know which industries (and individual companies) are hot and which are not! This way, we can direct our gift officers to the organizations likely to donate the largest gifts and help them better steward those that are not prospects now but may be in a position to give in the future.

While we’re talking about cultivation and stewardship, let’s go ahead and think about pipelines. This is a great time to begin thinking (and reading!) about the industries of the future and beginning to mark which prospects or companies you already have in your database that belong to those industries. That way, in three years when your gift officer says, “Hey, have you ever heard of…,” your answer can be, “Absolutely, and here is a list of people who work there!”

Find and Strategize About Industry Clusters

 Industries tend to rally around causes that in some way benefit them – technology companies that invest in education and diversity initiatives, for example; banks that invest in economic mobility; or health companies that invest in biomedical research. This is helpful for us because once you find a business that supports your cause, you can likely look at some of their peer institutions to find a few more prospects.

Look at the big picture, not just cash donations

 While all nonprofits love a cash donation, recent corporate conversation has centered on the many ways corporations can create value in the charitable sector. In fact, the fastest growth in giving is currently through pro bono work and volunteer programs, which many companies see as a win-win. When talking to gift officers, be sure to include not only foundation and corporate giving, but also information on the company’s sponsorship programs, cause marketing, matching gifts, volunteering, and their ESG work.

Do your research and think about the ROI

 You are absolutely never, ever supposed to say this in development, so I’m just going to whisper it very softly between us friends… sometimes the gift isn’t worth the staff time you have to put into applying for it or reporting on it.

Corporations have historically given small gifts to a large number of organizations. Recent trends have shown this to be shifting as companies focus their giving programs and are moving towards giving more meaningful gifts to a smaller number of nonprofits. The secret here is to know your number so you can quickly disqualify corporate prospects who don’t meet your giving threshold or the amount required to make the gift worth the staff time. Trust me on this, your gift officers will thank you.

Is this a new golden era of corporate philanthropy? Will a more modernized capitalism, as many have called for, make for a better society? I’m not convinced corporate consciousness is the only answer… I rather like the public and nonprofit sectors! But I do look forward to watching how the changes being made walk us towards a more equitable and brighter future – and knowing that the organizations I work with and love will be a part of it!

For Further Reading

• CECP –  http://cecp.co/
• JUST Capital – https://justcapital.com/
• Corporate Citizenship – https://corporate-citizenship.com/
• 2017 Cone Communications CSR Study – http://www.conecomm.com/research-blog/2017-csr-study
• “Here’s What You Need to Know About Corporate Philanthropy Right Now,“ Inside Philanthropy – A critique of corporate philanthropy by David Callahan; https://www.insidephilanthropy.com/home/2016/12/13/heres-what-you-need-to-know-about-corporate-philanthropy-right-now
• Business Insider‘s “Better Capitalism” Series – https://www.businessinsider.com/better-capitalism