The FBook

SHIFT: Meeting Corporate Philanthropy Where It’s Headed- Corporate Goals in Philanthropy

In change management, Discussables, Research on May 2, 2011 at 10:44 am

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?

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.

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.

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