Lessons in Corporate Giving from the Maple Syrup Mafia
I live and work in Vancouver BC. It’s a short, two hour flight from San Francisco and the Silicon Valley. Vancouver is experiencing a tech boom right now. Start-ups are everywhere you turn – they have been dubbed the “Maple Syrup Mafia”. Many companies, like Hootsuite and Plenty of Fish, are starting to gain traction and experience success. We’re also seeing major US companies, like Facebook, Amazon, Sony Imageworks and Microsoft, open huge offices in the city.
What makes start-ups unique is that, for the most part, they are run by Gen X/Y. These are companies that place little value in tradition. Old rules of corporate giving do not apply. White, middle aged men in suits holding a big cheque submitted to the local newspaper is not what they want. The logo on a back of a race t-shirt is of no value to them.
Fundraisers in Vancouver have had a unique challenge in figuring out what philanthropy looks like at a start-up. Engaging these new, different, entrepreneurial organizations requires a new kind of thinking. Here’s what I have learned so far.
Think Like an Entrepreneur: Put yourself into the mind-set of a 27 year old business owner – who is running a 200 person company that he started as him and a friend in their garage 7 years ago – and you’ll see that entrepreneurship isn’t a buzzword to these companies. These companies are:
- Customer focused. I visited a start-up recently where every position, from software engineer to HR manager, has to spend two weeks doing customer service to drill in this message: “it is ALL about the customer”.
- Interested in making money so they can make more products, not so shareholders can get rich.
- Nimble and adaptable and not interested in 5 year business plans.
- Focused on sales not marketing, they need revenue not exposure.
- Not going to give you money just because you need or deserve it.
If you can’t understand this way of thinking, you’ll have no hope of building a relationship.
Think “Investment” not “Donation”: Revenue and cash flow are not a given for a start-up. Every penny earned is invested back into making the company’s product better or growing the business. There needs to be a Return On Investment (ROI) – which you can only offer as a non-profit if you understand the company and their business needs:
- Who are their customers?
- What is their product?
- How do they get new business?
- What are their employment challenges today and tomorrow?
Look for areas where a partnership with your cause can help solve a business problem: connecting them with new customers, improving the customer experience, connecting them with potential employees, raising the profile of their company. These are all ways a non-profit can give start-ups a ROI.
Engage: Culture, more than branding, is what matters in a start-up environment. It is important to understand the unique culture of the company and find ways to really engage the whole team. Maybe it’s nominating the CEO for a 40 under 40 award or bringing the Lego robots used in your youth after-school program (which they helped fund) in during the company’s lunch break to play with. Look for fun ways to build a relationship that matches the culture of the company.
New Ways of Giving: We are now living in a creativity economy – the first “gift” to your non-profit will likely be an idea. The start-up community is very open to sharing knowledge and learnings. I have found CEOs of start-ups to be incredibly willing to make time for non-profits. Ask for advice on your programs and projects. Take advantage of these smart minds that see the world a little differently. Using this advice, and reporting back on how it made a difference is a great way to build a relationship that will turn into giving later.
Some new companies have started donating 1% of their business to a charity. It is low risk for the company: if they fail it never costs them anything. For those organisations destined to grow, that 1% can can become an amazing philanthropic gift.
Giving is Exciting: I have now worked with over a dozen companies where their gift to the cause I represent was their first charitable gift. It is an amazing experience. I have found start-ups to be inspiring to work with because of their excitement and joy at being able to use the profits of their business to make a difference in their communities. For many, it is a sign that after years of hard work they have finally “made it”. It is fulfilling as a fundraiser to work with these “new philanthropists” and to offer them the opportunity to integrate philanthropy and giving into the DNA of the company.
The world is changing faster than ever before. And while technology start-ups may not be a huge industry in your area, as more young people learn coding, entrepreneurs will be everywhere.
Do you think corporate giving needs to adapt? What have you done that’s worked? Share you thoughts below!
Andrew Littlefield · February 23, 2015 at 17:39
Great post! I’ve worked for both nonprofits and startups and think there are quite a few lessons to be learned across each sector. Your comments on culture fit and creating value are spot-on, this is HUGE in the startup world.
I think this is an area of untapped potential for fundraisers. A lot of startup founders have never started a corporate giving program simply because they’re new and insanely busy and the thought has just never occurred to them (or they haven’t had time to set it up).
Rebecca · February 24, 2015 at 17:47
Vancouver – indeed, the North American west coast – is HOT HOT HOT right now. So many questions for you, Rory! What a brilliant and timely blog post.
As jazz was to the early classical symphony, North America is right now giving a whole new realm of philanthropy to the world through Silicon Valley/Vancouver. You write so optimistically on the way forward with these companies. My observation and (little) experience is that there’re also a couple of barriers to dealing with start-ups. They are:
1) There’s very little cash flow until the company has gone public (as you say, the interest is in folding any profits back into product design and production, not paying dividends). Where do the charitable dollars come from?
2) When the company goes public, millionaires and even billionaires are made of people who’ve previously had negative net worth. They’ve now ‘had their exit’ and are fantastically wealthy, and… half my age (and I’m not that old). My observation is that they put their money into their own foundations or donor advised funds, and go dig wells in Kenya. Remember these are the folks who bet on an idea, obsessively coded toward it, and hit the counter-culture-meets-killer-app jackpot. They know how to ‘bring it’ to market, and trust themselves to do it again in a foreign country. Have you had much experience with these, the ‘ego philanthropists’ as they’ve been coined? How to have the conversation about investing in existing NGOs and/or investing some of their wealth in their own country?
Rory Green · February 24, 2015 at 18:16
Hey Rebecca – Thanks for your comment.
To answer #1 – yes, a big designated cheque is NOT something you should realistically expect until the company is sold, or goes public. Look for alternative gifts – Gift in Kind of product or services, donating shares: “Some new companies have started donating 1% of their business to a charity. It is low risk for the company: if they fail it never costs them anything. For those organisations destined to grow, that 1% can can become an amazing philanthropic gift.” – and employee giving.
To answer #2 – yes many of these new millionaires prefer to start their own funds. That doesn’t mean there is no role for charities. When I see charities failing is when they have the mentality that the charity has all the knowledge on how to fix the problem – and all the donor s good for is a cheque. The better a charity can work with the brain, and not just the wallet, of these entrepreneurs – the more successful they will be. I look to the Silicon Valley Community Foundation – who got a $1 BILLION donation from Mark Zuckerberg – the Foundation had this to say:
“Younger donors in our area are more interested than donors in the past with being hands-on and more involved with the groups they donate to, It’s not the model of writing a check at year’s end”
Executive Director Silicon Valley Social Venture Fund
“With people who have invented things I could never conceptualize, it’s unwise to ever start with the idea that we’re the smartest people in the room.”
CEO of Silicon Valley Community Foundation
Let’s take a lesson from that, and actually put our money where our mouth is when it comes to donor engagement.
Think Different! (Can I trademark that?) | What Gives??? · June 8, 2016 at 12:41
[…] That means no more Gold, Silver, & Bronze sponsorship packages, folks! (Read this AMAZING post by Rory Green. She knows about this way more than I do.) […]