Special to the Philanthropy Journal
A blended funding portfolio has long been a goal of the nonprofit sector, and corporate funding can be an excellent balance to individual, public sector, and private foundation donors. Corporate funders bring unique assets to the table because of their very nature: employees, expertise, logistical networks, operational footprint, customer service insights, products, and the list could continue. That said, as both sectors evolve, it’s important to consider if relationship development with corporations will lead to a beneficial partnership for both parties.
CECP has been studying and advising corporate sector funders since 1999. Our coalition of companies spans more than 200 multi-billion corporations that encompass over US$8 trillion in revenues. CECP publishes Giving in Numbers, an annual report on major trends from its bird’s eye view of the field of corporate societal engagement.
Working with grantees is only one way corporations seek to engage; they have many other competing priorities, so you will have an advantage if you do your homework to determine what interests companies have in community engagement and what their challenges may be. Understanding a company’s scope of responsibility will ensure you can have a two-way dialogue about a potential partnership—what you can offer them as well as what they can offer you.
The main story on total giving from 2015 is that it is stable and strong. Total corporate giving (which includes cash and non-cash) was 0.13% of total corporate revenue in 2012 and 0.13% in 2014. So, companies are investing in the community, but they are becoming ever more strategic—and therefore, you have to be, as well, in how your partner with them.
Here are some guiding questions on approaching corporate funders and determining if they are a right match for your nonprofit:
What does the company care about?
Get smarter about your potential funder’s strategy and link to what their business does. This includes what they do as a business, where they are located, and what their community/societal focus is. The more you can help the company meet their business goals through the partnership, the more opportunities for growth will appear. If you learn of a business challenge or risk that the company faces, consider how you could propose a solution through partnering with your organization.
Companies that increased total giving from 2012 to 2014 by 10% or more also saw strongest growth: 9% median growth rate in pre-tax profit, compared to 2% for all other companies. So, companies know that investing in the community is good for their bottom line, but it may be up to you to help them determine how to invest in the community.
Companies seek to determine which partnerships can connect directly to their core business, expertise, and competencies. CECP uses Bloomberg’s industry categorizations in Giving in Numbers. You can search a company on the Bloomberg website if you aren’t sure. The more you know about the business, the better. Industry trends is a great place to start. Here are two Giving in Numbers’ figures to help guide your search of which industries may be your most likely source of partners. What that means for your partnership discussion: Companies, and all their stakeholders which includes shareholders, want to know how their community engagement connects to their business, whether that’s inspiring innovations in their operations, strategies, brand, or employee engagement. Make sure the business connection is there before engaging in relationship development.
What can corporations offer?
For public companies, it’s not the CEO’s money, but rather the shareholders’, which may be harder for them to “give away.” Consider not only a financial contribution, but also support beyond cash—employee volunteer opportunities, pro bono projects, levering supply chains, providing goods & services, supporting Board roles, and increasing matching-gift options for employees.
Don’t limit your requests to “hands on” activities. Company skills are being applied to solving societal challenges. From 2012 to 2014, offering of pro bono and board service, examples of skills-based volunteer programs, had the highest growth rates compared to other volunteer programs.
What that means for your partnership discussion: While companies pursue the opportunity for skills-based volunteering, it is important for both sides to indicate what volunteer needs already exist at your organization. If none, the discussion is around creating new ones and the associated costs for the opportunities.
How can you show impact?
Companies are measuring more with a goal to invest where there are the greatest results. Transparency with data reporting is important to them. Get fluent with the language and vocabulary.
Measurement and evaluation are on the rise, overall. Eighty four percent of companies measured the outcomes and/or impacts of at least a portion of their portfolio. Those that did reported an 18% jump in total giving from 2012 to 2014
What that means for your partnership discussion: Include the topic of measurement in the initial partnership planning. What data does your organization track already? Will it meet the company’s reporting requirements? How will they use the data you report?
How big do they want to go?
Consider not only issue-alignment with your programs and the company’s focus area, but also size-alignment. Some companies seek local engagement with local nonprofits. Other companies only initiate national or global programs and thus need national or global nonprofits.
Over the years, Giving in Numbers has shown that companies seek to focus increased grant sizes on a decreased number of grantees. This year’s 2015 edition notes that the median number of recipients in a corporate funder’s portfolio is on the decline (page 14). The company’s motivations for this may be partly operational to be more efficient in grants management. Even more importantly, the companies seek greater results and have determined that deeper, more focused investments are the best path to achieve this.
What this means for your partnership discussion: Make sure that not only your organization’s theory of change and interventions are aligned with the company’s focus, but also at the scale they fund. If not, invest your time in relationship cultivation elsewhere.
Do you think of yourself as a partner, or as a grantee?
Your organization brings relationships, positive reputation, expertise, knowledge, and results to the table. Keeping this in mind will make sure the dialogue is open, frank, and will best produce value for all involved in the collaboration.
What this means for your partnership discussion: Be ready with an overview of what you offer the company, based on an understanding of their needs and interests.
As CECP’s Evaluation and Data Insights Director, Carmen Perez leads a high-performing team that achieves CECP’s mission by equipping companies to make data-driven decision in their societal investment strategies. Carmen came to CECP with a track record as a results-oriented in-trepreneur. She joined CECP from the community economic development non-profit sector, where she held leadership positions at a federal credit union and micro-finance and small business development organizations. Carmen holds a Masters in Public Administration, Financial Management Specialization, from the NYU Wagner School of Public Service and a Bachelor of Arts degree from University of Wisconsin-Oshkosh.
CECP is a coalition of CEOs united in the belief that societal improvement is an essential measure of business performance. Founded in 1999, CECP has grown to a movement of more than 150 CEOs of the world’s largest companies across all industries. Revenues of engaged companies sum to $7 trillion annually. A nonprofit organization, CECP offers participating companies one-on-one consultation, networking events, exclusive data, media support, and case studies on corporate engagement.