Corporate fundraising
Often very tempting, and for those without data seems to be the obvious place to go next. But corporates contribute around 5% of total (non-government) fundraised income in most of the mature fundraising markets and are very, very hard work.
A recession doesn't help, with Australian data showing corporates slashing their charity budgets.
But for small charities, local small and medium sized private businesses can be a saviour.
Overall, generally speaking corporates are NOT a good source for most charities to achieve strategic growth.
For more on this see The Inconvient Truth of Corporate Fundraising.
Sean Triner
Showing posts with label corporate fundraising. Show all posts
Showing posts with label corporate fundraising. Show all posts
Tuesday, December 16, 2008
Saturday, September 6, 2008
The Inconvenient Truth of Corporate Fundraising
Have you ever questioned the corporate/community ‘love-in’ line that we are often fed by a variety of media, fundraising commentators and corporate enterprises themselves? Corporate philanthropy, triple bottom line, corporate social responsibility – call it what you will, I know I do – is not what many crank it up to be.
In 1966, before most of the buzz-phrases you and I know and love existed, companies in the USA gave a whopping 0.9 per cent of their profit away to good causes. This is according to Giving USA. Generous, huh?
Forty years on, and of course the percentage must be much higher now, right? I mean, what with the monumental shift in public attitudes towards corporate responsibility and ethics and all that – things have just got to have changed out of all recognition, haven’t they?
Ok, then, take a shot. Just how much more of their profit do you think US companies give away now? Don’t cheat by taking a peek at the end of the article. Instead, write down the figure you reckon and see just how close you get.
Exciting game, isn’t it? I think so. You see, corporate philanthropy is one of my favourite subjects. Corporate fundraising is so darn cool – it adds kudos, awareness, involvement and, of course, money to charity coffers. It’s a win-win ‘love-fest’ for all involved – where no one goes home empty-handed.
Or is it?
Well, actually, to some extent the answer is yes, there are loads of great examples. Looking at Australian charities, I checked out a few websites of those I know do well from corporates. NRMA Careflight do well (a roadside assistance/insurance company associating with a rescue helicopter charity), Westpac (a bank) give a nice slice of cash to Mission Australia (a welfare charity) and Canteen (young people living with cancer) do alright out of Toyota, Qantas and others.
And according to a Giving Australia report, companies said they gave AUS$ 2.2 billion in money in 2003/04 and a further AUS$ 1.1 billion in goods and services. Isn’t that wonderful?
Well – I’m not so sure it is. In fact, before you rush off to embrace your nearest corporate CEO, ask yourself this: if corporations are so generous, then where’s the bloody cash? One thing’s for sure, if you take the time to look at the annual reports of the top 20 charities, you won’t find much evidence of large amounts of money being given away by commercial organisations.
My cautionary words about corporate fundraising are not unique. Back in the early 1990s a guy called Stephen Lee had a few things to say about the topic. At the time he was the boss at the Institute of Charity Fundraising Managers, the then name of the UK’s Institute of Fundraising, the British equivalent of North America’s AFP, the Association of Fundraising Professionals. Now he is a very clever academic fundraising guru working at Henley Business School in the UK.
Anyway, Stephen told a story about the UK’s ‘One Per Cent’ club, a club supposedly made up of commercial organisations who give away one per cent of profit. It was a hilarious story, because the club members didn’t actually meet a key part of the membership criteria – giving one per cent of profit away! He stood up and called for charities to refuse corporate donations until companies stopped taking the mickey out of the whole corporate/community partnership business.
His point was that, in the deal between commercial companies and charities, the companies were the winners. Charities rarely knew how to fight for a good deal and ended up being nothing but a big pair of rose-tinted specs for the company. Charities jump through hoops to get a corporate deal and then get paraded like an unfaithful footballer’s pretty wife. Yes they get some jewels – but at what cost?
My point is not quite the same. I want to be more pragmatic. There is money out there – and it can be a lot, but charities need to be much more realistic about their expectations of corporate fundraising.
Let’s look at the facts. Nearly all donated corporate money comes from very few companies and goes to very few charities – most of which are well-known brands – UNICEF, WWF for example – or well-established hospitals, universities, etc.
Now look at the big, growing charities – they are growing from regular giving or government grants, not from corporate donations.
Before pursuing corporate fundraising as a provider of growth in your fundraising strategy you really need to answer these questions. Is corporate fundraising a good use of your limited resources? Can you realistically compete with the big brands, NSPCC, UNICEF, Careflight, Cancer Council and Mission Australia? Is your brand something that will help corporates sell more of whatever it is they exist to sell? Is it even your job to know the answer to that last question and, if so, why would you be any better at it than them?
One Australian company, Cavill and Co has been working with charities and corporates for many years, trying to marry up relationships. In their vision and values statement they hit the nail on the head, ‘... not for profits [need] to adopt an attitude of abundance and forge equitable partnerships with corporations ...’ Of course, my favourite word there is equitable.
The sponsors really do treat the charity’s staff, and therefore the charity, with very little respect. They expect the whole deal to be about how grateful the charity should be, not about an equal partnership.
Let me tell you a true story about a friend of mine who works for a charity that gets a lot of money from companies. My friend doesn’t want to be named so we’ll call him Erik. Erik was really excited about being appointed to a new job with this charity, and especially about the blue chip companies that were plastered all over the charity’s events material, and in the annual report.
But Erik has had a nightmare. The sponsors really do treat the charity’s staff, and therefore the charity, with very little respect. They expect the whole deal to be about how grateful the charity should be, not about an equal partnership. The companies rarely respect their end of the deal – nor acknowledge the benefits the charity brings to their public image.
Erik grew more and more disillusioned, and one day decided to do a simple bit of maths, income divided by staff time. And that’s when the penny dropped. The figures were clear. Despite basking in glory, his corporate fundraising staff were bringing in much less revenue than their contemporaries in other areas of fundraising in other charities Erik had worked with; areas such as major gifts, bequests and direct marketing.
At some of my recent masterclasses in Canada I asked the attending charities to send me their income by fundraising area divided by staff time per area. Suffice to say, from those who completed the homework, corporate fundraising came out pretty darned badly.
Doing it properlyI am not all doom and gloom. My company, Pareto Fundraising, is frequently engaged by charities to work on their corporate fundraising programmes. So does this mean I am a hypocrite? No, I am not saying reject corporate fundraising out of hand – merely challenging you to measure it properly, look at the returns, and accept the fact that for most charities it is flogging a dead horse.
And if you do go the corporate route, do it properly. If you hire a dedicated member of staff, ensure that whoever it is can ‘close the deal.’ Give him or her tight, fast targets and drop ‘em like hot rocks if results are not coming through. You will know in three months.
Don’t be fobbed off with ‘I’m doing research’, or ‘I’m working on our case for support’. Corporate fundraisers need to be out of the office – at the companies’ offices – more than in the charity’s. Ensure that you have indices that prove sales in the making, and hold them to tough sales targets within 12 months.
Your corporate fundraising programme needs to be strict from the start – you need to understand the value of your own brand, understand why they are supporting you, don’t accept partnerships unless standards are met, create a new internal code of practice and most importantly, don’t devote more energy and resources to this area than income from it deserves.
So, let’s finish with a comment about corporate philanthropy in the country for which we have the most data, the USA. And please don’t think, ‘Ah, but it is different here’. It isn’t.
The most generous country in the world, and home to some of the most successful and largest companies in the world, the USA is the nation that invented the ‘triple bottom line’ and to some extent ‘corporate social responsibility’.
What was your guess for how much US companies gave – as a percentage of profit – in 2006?
Forty years of change and the percentage of profit US corporates give has gone up from 0.9 per cent in 1966 to 0.7 per cent in 2006. Oops, did I say up?
----------------------------------------------------
Pareto Fundraising can help you with your fundraising strategy. Although our offices are in Hong Kong, Toronto, Brisbane, Sydney, Melbourne and Wanaka we deliver strategic advice and consulting worldwide.
To see if we can help you, please email canyouhelp@paretofundraising.com.
This information also appeared in F&P magazine and is also on SOFII - The Showcase of Fundraising Innovationand Inspiration.
In 1966, before most of the buzz-phrases you and I know and love existed, companies in the USA gave a whopping 0.9 per cent of their profit away to good causes. This is according to Giving USA. Generous, huh?
Forty years on, and of course the percentage must be much higher now, right? I mean, what with the monumental shift in public attitudes towards corporate responsibility and ethics and all that – things have just got to have changed out of all recognition, haven’t they?
Ok, then, take a shot. Just how much more of their profit do you think US companies give away now? Don’t cheat by taking a peek at the end of the article. Instead, write down the figure you reckon and see just how close you get.
Exciting game, isn’t it? I think so. You see, corporate philanthropy is one of my favourite subjects. Corporate fundraising is so darn cool – it adds kudos, awareness, involvement and, of course, money to charity coffers. It’s a win-win ‘love-fest’ for all involved – where no one goes home empty-handed.
Or is it?
Well, actually, to some extent the answer is yes, there are loads of great examples. Looking at Australian charities, I checked out a few websites of those I know do well from corporates. NRMA Careflight do well (a roadside assistance/insurance company associating with a rescue helicopter charity), Westpac (a bank) give a nice slice of cash to Mission Australia (a welfare charity) and Canteen (young people living with cancer) do alright out of Toyota, Qantas and others.
And according to a Giving Australia report, companies said they gave AUS$ 2.2 billion in money in 2003/04 and a further AUS$ 1.1 billion in goods and services. Isn’t that wonderful?
Well – I’m not so sure it is. In fact, before you rush off to embrace your nearest corporate CEO, ask yourself this: if corporations are so generous, then where’s the bloody cash? One thing’s for sure, if you take the time to look at the annual reports of the top 20 charities, you won’t find much evidence of large amounts of money being given away by commercial organisations.
My cautionary words about corporate fundraising are not unique. Back in the early 1990s a guy called Stephen Lee had a few things to say about the topic. At the time he was the boss at the Institute of Charity Fundraising Managers, the then name of the UK’s Institute of Fundraising, the British equivalent of North America’s AFP, the Association of Fundraising Professionals. Now he is a very clever academic fundraising guru working at Henley Business School in the UK.
Anyway, Stephen told a story about the UK’s ‘One Per Cent’ club, a club supposedly made up of commercial organisations who give away one per cent of profit. It was a hilarious story, because the club members didn’t actually meet a key part of the membership criteria – giving one per cent of profit away! He stood up and called for charities to refuse corporate donations until companies stopped taking the mickey out of the whole corporate/community partnership business.
His point was that, in the deal between commercial companies and charities, the companies were the winners. Charities rarely knew how to fight for a good deal and ended up being nothing but a big pair of rose-tinted specs for the company. Charities jump through hoops to get a corporate deal and then get paraded like an unfaithful footballer’s pretty wife. Yes they get some jewels – but at what cost?
My point is not quite the same. I want to be more pragmatic. There is money out there – and it can be a lot, but charities need to be much more realistic about their expectations of corporate fundraising.
Let’s look at the facts. Nearly all donated corporate money comes from very few companies and goes to very few charities – most of which are well-known brands – UNICEF, WWF for example – or well-established hospitals, universities, etc.
Now look at the big, growing charities – they are growing from regular giving or government grants, not from corporate donations.
Before pursuing corporate fundraising as a provider of growth in your fundraising strategy you really need to answer these questions. Is corporate fundraising a good use of your limited resources? Can you realistically compete with the big brands, NSPCC, UNICEF, Careflight, Cancer Council and Mission Australia? Is your brand something that will help corporates sell more of whatever it is they exist to sell? Is it even your job to know the answer to that last question and, if so, why would you be any better at it than them?
One Australian company, Cavill and Co has been working with charities and corporates for many years, trying to marry up relationships. In their vision and values statement they hit the nail on the head, ‘... not for profits [need] to adopt an attitude of abundance and forge equitable partnerships with corporations ...’ Of course, my favourite word there is equitable.
The sponsors really do treat the charity’s staff, and therefore the charity, with very little respect. They expect the whole deal to be about how grateful the charity should be, not about an equal partnership.
Let me tell you a true story about a friend of mine who works for a charity that gets a lot of money from companies. My friend doesn’t want to be named so we’ll call him Erik. Erik was really excited about being appointed to a new job with this charity, and especially about the blue chip companies that were plastered all over the charity’s events material, and in the annual report.
But Erik has had a nightmare. The sponsors really do treat the charity’s staff, and therefore the charity, with very little respect. They expect the whole deal to be about how grateful the charity should be, not about an equal partnership. The companies rarely respect their end of the deal – nor acknowledge the benefits the charity brings to their public image.
Erik grew more and more disillusioned, and one day decided to do a simple bit of maths, income divided by staff time. And that’s when the penny dropped. The figures were clear. Despite basking in glory, his corporate fundraising staff were bringing in much less revenue than their contemporaries in other areas of fundraising in other charities Erik had worked with; areas such as major gifts, bequests and direct marketing.
At some of my recent masterclasses in Canada I asked the attending charities to send me their income by fundraising area divided by staff time per area. Suffice to say, from those who completed the homework, corporate fundraising came out pretty darned badly.
Doing it properlyI am not all doom and gloom. My company, Pareto Fundraising, is frequently engaged by charities to work on their corporate fundraising programmes. So does this mean I am a hypocrite? No, I am not saying reject corporate fundraising out of hand – merely challenging you to measure it properly, look at the returns, and accept the fact that for most charities it is flogging a dead horse.
And if you do go the corporate route, do it properly. If you hire a dedicated member of staff, ensure that whoever it is can ‘close the deal.’ Give him or her tight, fast targets and drop ‘em like hot rocks if results are not coming through. You will know in three months.
Don’t be fobbed off with ‘I’m doing research’, or ‘I’m working on our case for support’. Corporate fundraisers need to be out of the office – at the companies’ offices – more than in the charity’s. Ensure that you have indices that prove sales in the making, and hold them to tough sales targets within 12 months.
Your corporate fundraising programme needs to be strict from the start – you need to understand the value of your own brand, understand why they are supporting you, don’t accept partnerships unless standards are met, create a new internal code of practice and most importantly, don’t devote more energy and resources to this area than income from it deserves.
So, let’s finish with a comment about corporate philanthropy in the country for which we have the most data, the USA. And please don’t think, ‘Ah, but it is different here’. It isn’t.
The most generous country in the world, and home to some of the most successful and largest companies in the world, the USA is the nation that invented the ‘triple bottom line’ and to some extent ‘corporate social responsibility’.
What was your guess for how much US companies gave – as a percentage of profit – in 2006?
Forty years of change and the percentage of profit US corporates give has gone up from 0.9 per cent in 1966 to 0.7 per cent in 2006. Oops, did I say up?
----------------------------------------------------
Pareto Fundraising can help you with your fundraising strategy. Although our offices are in Hong Kong, Toronto, Brisbane, Sydney, Melbourne and Wanaka we deliver strategic advice and consulting worldwide.
To see if we can help you, please email canyouhelp@paretofundraising.com.
This information also appeared in F&P magazine and is also on SOFII - The Showcase of Fundraising Innovationand Inspiration.
Sunday, August 24, 2008
Fundraising in India - the value of logic and reason
Today sees me in Agra, India, about 5km away for the Taj Mahal. Cool.
I am here for the 'International South Asian Fundraising Workshop', where two colleagues and I are doing a few sessions training fundraisers from the region.
Yesterday at 0545 I went along with my Pareto Fundraising colleagues to visit 'the Taj' - one of the seven wonders of the world. And it is pretty amazing.
A great break, then back for breakfast and last minute work on our presentations.
I am here for the 'International South Asian Fundraising Workshop', where two colleagues and I are doing a few sessions training fundraisers from the region.
Yesterday at 0545 I went along with my Pareto Fundraising colleagues to visit 'the Taj' - one of the seven wonders of the world. And it is pretty amazing.
A great break, then back for breakfast and last minute work on our presentations.
After the visit, I presented a pre-conference workshop. The workshop was all about using data to inform strategy, and not to be reliant upon tradition to dictate your fundraising strategy.
My audience of about 35 people were predominantly Indian, with a few from Pakistan and at least one from Nepal. The session was similar to one presented several times in Australia, Canada, Chile, Thailand, Brasil, Argentina and UK - and not surprisingly the same issues came up again.
Although the session is about using data, and using evidence I always give examples to illustrate how anecdote and gut instinct can be so wrong, and I also have a pop at focus groups (in a constructive manner of course!)
The two examples that always get the best reaction are:
One: I get four people to come to the front and hold up the elements of a direct mail appeal - the pack is huge, with about 13 different elements - 4pp letter, seperate response coupon, diary from the field, a photograph, another mini-letter and of course outer and return envelopes. All eight hands are needed to hold up all the bits.
I then ask for feedback; the audience always say they wouldn't donate. They give lots of reasons - too long, not enough time, too expensive, wouldn't read it.
I then show them results - and they are astonished that, in head to head tests, making a big pack does not put people off. In fact, a recent test resulted in a huge pack beat a 'normal pack' (one page letter with tear-off coupon, outer and return envelopes) by over 4.5 times. Grumblings still abound - despite the evidence I know that people in the audience are never going to test such an approach.
(By the way - I should add that making an appeal big is not going to make it work. A rubbish big appeal is still rubbish. Producing a good appeal rather than a rubbish one needs an understanding of what needs to go into a letter to make someone respond, no matter how long.)
Strike one: Indian audience no different from anywhere else I have presented this.
Two: The next example is where I explain that corporate fundraising is crap and a waste of time for most charities, most of the time - despite the fact that some great charities like WWF and Habitat for Humanity do really well from corporates. There is disbelief and lots of "Ah, but it is different in India". (Reminded me of "Ah, but it is different in Hong Kong/New Zealand/Philippines etc).
I didn't have the data to prove this in India, and was asking the audience what they knew when just at the right moment a guy called Anup Tiwari from UNICEF India pipes up "Look at the biggest Indian charities - you will see that they get 85% of their money from individuals - only 5% at most comes from corporates."
Phew. But still more grumbles and arms folded from people, despite the evidence. Why is it that despite logic, reason, evidence and data our prejudices and assumptions take so much knocking down?
Strike Two: India no different from anywhere else - corporate fundraising enjoys a disproportionate standing in the fundraising mix.
Of course, my point in the session was don't take my word for it. Apply your logic and reason, and most importantly - test it. Find out for yourselves.
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