From corporate fundraiser to service-provider
It has been going on for many many years, but it is still the most important trend in corporate fundraising: philanthropic donations by companies are on the decline. I wouldn’t go near saying that corporate philanthropy is dead, as some people do, but it is definitely on the decline. Luckily, the attitude of the general public has also changed: almost everybody is calling upon big firms to be good corporate citizens. And these companies all want to show that they are.
A third group, NGOs, is somewhat behind, and some of them should urgently change their attitude. Instead of focusing on philanthropic donations with little or even nothing in return, they need to be more commercial. Many of them have already changed their attitude or are at least aware that they should, but especially the older, larger and more established NGOs, do not like the word ‘commercial’.
For these people and organizations I have some sad news: in order to attract, retain or upgrade significant, continuous support of large companies, you need to think more commercially. You need to acknowledge the added value that corporate giving or sponsoring may offer to corporate donors. And you need to acknowledge the fact that you have to make it possible for the corporate donors to realize this added value. If you ask for value, you should also be willing to return value.
In fact, you should think like a service-provider: which needs can you fulfill? So instead of selling your problems (read: projects) you have to sell solutions.
That said, you should not be the company’s poodle! You shouldn’t beg, but you should rely on our strengths, as you are also going to give them something. Naturally companies are helping you with donations or other support, but you are also helping them build their social program (internally and externally) and you might support them in their communications.
In order to define the needs that you might be able to fulfill, it is important to understand the corporate view and the possible motives a company might have to team up with an NGO. There are several possible (non-excluding) motives:
- Corporate philanthropy (still there, jippie-kaje!)
- Improving image internally (engaging employees)
- Improving image externally (engaging customers/business relations, attracting new employees, satisfy other stakeholders, etc)
- Name awareness / media value
- Increase sales through incentive (Cause Related Marketing )
- Engage new markets
- Test new products and technologies
Note: many companies focus on improving their image, as the social image of a brand (both externally and internally) is increasingly important, especially in a competitive market.
Given the above, there are different budgets that companies can use for alliances with NGOs:
- Strategic philanthropy budget
- Corporate foundations budget
- Stakeholder budget (Christmas gifts/cards, business relations events, various celebrations, etc.)
- Social Investment budget
- Human Resources budget
- Marketing budget
- Brands (incentives –Cause Related Marketing-, customer loyalty)
- Public Relations
- Operations budget
- Innovation budget
- Social clubs budget (retired employees, computer clubs within organization, etc.)
Budget 1 to 4 are the easiest to get in, but these are also the first to be cut out when the company is in hard times.
If I would be in the corporate chair and having to choose an NGO to commercially team up with, I would preferably see the following elements in this engagement:
- A component of business strategy and operating philosophy
- Integrated with the company’s overall CSR, operations, marketing, communications and/or product strategies
- Designed to build awareness among target market segments
- Continuously communicated through all internal and external channels
- Derived from the company’s history, values and culture
- Supported by senior management
- Uniquely positioned and not easily replicated
- Designed to involve and generate excitement among employees
But I am not in the corporate chair; I’m in the chair across the street. And although it’s a very nice chair to be in, it’s far from comfortable. And it is hell of a job setting up the right alliances. Because understanding the theory is one thing, changing the attitude of your organization and getting them aligned is another, but the most difficult part remains the whole process thereafter: from defining suspects and prospects to setting up the alliance, and keeping it alive.
But hey, nobody said it was going to be easy.
Nonetheless, I do hope this theoretic blog helps you in any way, and I wish you all the best in setting up your perfect alliance!