Have you ever questioned the corporate/community ‘love-in’ line that we are often fed by a variety of media, commentators and corporates 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.

Have you ever questioned the corporate/community ‘love-in’ line that we are often fed by a variety of media, commentators and corporates 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 know and love existed, companies in the USA gave a whopping 0.9% of their profit away to good causes. This is according to Giving USA. Generous eh?

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 damn 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 some good examples such as NRMA CareFlight, and Canteen do alright out of Toyota, Qantas and others.

And according to the Giving Australia report, companies said they gave $2.2 billion in money in 2003/04, and a further $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 twenty charities, you won’t find much evidence of it there.

Corporates Taking the Mickey

My cautionary words about corporate fundraising are not unique. Back in the early 90’s 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 equivalent of the FIA. (Now he is a very clever and brilliant academic fundraising guru working at Henley Management Centre in the UK).

Anyway, Stephen told a story about the UK’s “One Per Cent” club, a club supposedly made up of corporates who give away 1% of profit. It was an hilarious story because the club members didn’t actually meet the membership criteria.

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 corporates and charities, corporates 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 corporate. Corporates make charities jump through hoops to get a deal, and then get paraded like an unfaithful footballer’s pretty wife. Yes they get the jewels – but at what cost?

Reality Check

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 corporate money comes from very few corporates and goes to very few charities – most of which are brilliant, well-known brands.

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 strategic growth provider you really need to answer these questions. Is corporate fundraising a good use of your limited resources? Can you realistically compete with CareFlight and Cancer Council? 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.

Erik’s Story of Disillusionment

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 and in the annual report.

But Erik has had a nightmare. The sponsors really do treat the 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 corporates rarely respect their end of the deal – nor acknowledge the added 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. His corporate fundraising staff, despite basking in glory, were bringing in much less revenue than their contemporaries in other areas of other charities Erik had worked with. Areas such as major gifts, bequests and direct marketing.

At some of our recent master classes 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 Properly

I am not all doom and gloom. Pareto is frequently engaged by charities to work on corporate fundraising programs. 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 staff member ensure that whoever they are can ‘close the deal.’ Give them 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.” The corporate fundraiser needs to be out of the office – at corporates – more than in the office. Ensure that you have indices that prove sales in the making, and hold them to tough sales targets within twelve months.

Back to the Start

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.” No it’s not.

The USA is widely seen as 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 which 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% in 1966 to 0.7% in 2006. Oops, did I say up?

About the Author – Sean Triner

Sean Triner likes to cause controversy “to get people thinking and planning properly, and to stop doing things the way they always did just because they always did!”

In the space of just five years, Sean co-founded and continues to lead the international Pareto Group (www.paretofundraising.com), one of Australia’s most dynamic fundraising and marketing agencies with offices in Australia, New Zealand, Canada and Hong Kong.

Pareto’s clients include some of Australia’s leading charities such as the National Heart Foundation, Amnesty International Australia, and the Australian Conservation Foundation.

Sean has been a presenter (including a plenary speaker) at some of the world’s best-known fundraising conferences including the IFC in Amsterdam, FIA conferences, and the International Workshop on Resource Mobilisation (IWRM) in Malaysia.