Don't Look Now

A recent non-profit client just a year old had taken on an aggressive campaign goal: raising $12 million in 2011 from corporate sponsors alone in its second year. I was tasked with conducting research to help the organization understand what corporate donors want.

My findings, below, were based on primary and secondary research and my experience with fundraising and development efforts. The factors listed make the greatest difference for corporate donors and are presented in an order of rough importance.

Locality

Small- and medium-sized businesses especially look for opportunities to give locally, as one might expect. For such businesses, which usually lack national profiles, donations that impact the immediate community go further in terms of raising profile and making an appreciable difference. The preference for local philanthropy may also be a matter of convenience, insofar as local groups have an advantage in terms of conducting meetings with and giving presentations targeting corporate giving officers. Finally, many businesses likely understand that improving their own communities will lead to happier employees (and customers), and to greater recruiting potential.

It may be a surprise that many large corporations with national profiles also choose to give locally, largely for the same reasons. What “locally” means, thought, is a complicated question. For example, PNC Bank is well-known for philanthropic efforts near its branches but especially near its corporate headquarters in Pittsburgh, PA. (The name of the company’s philanthropic website bears out this community focus.) Another company in the top half of the Fortune 500, Dow Chemical, notes in its philanthropic guidelines, which are divided by state or region, that they target nonprofits that “address a social, economic, educational, or environmental need in a city/community in which The Dow Chemical Company has a presence.” That presence can be in manufacturing, corporate, distribution, or any other activity in which the company engages.

Success

Corporate philanthropy can only meet the corporation’s goals—again, profile-raising and community improvement, among others—if the recipients make good use of donated funds. As such, corporate giving officers look for evidence of past effectiveness and, for younger nonprofits in particular, potential for future success. This evidence can be quantitative or qualitative, focusing either on efficient use of funds (e.g., helping a great number of people with minimal financial commitment) or on individual success stories (“human interest” case studies or testimonials). Nonprofits that can provide both kinds of evidence will find the greatest success in attracting corporate donations.

Transparency

In a post-Enron, post-housing-bubble era, many businesses face an increasing demand for transparency. This is most true for public corporations, of course, but also holds for companies owned by groups of private investors or by venture capitalists. In order to preserve the integrity of their own books, most corporations look for philanthropic opportunities with nonprofits that can show how they have used funds they’ve received in the past, with nothing vague or irregular in the breakdown of expenditures.

Uniqueness

In some cases, the “bragging rights” that accompany philanthropy drive giving officers at larger companies to seek out nonprofits with unique service offerings, unique positions within their fields, or otherwise unique perspectives on their causes. Also, since most corporations prize innovation internally, their philanthropic goals tend naturally to fall in line with that disposition.

Safety in Numbers

Another consequence of the increased demand for transparency is that corporate giving officers tend to take comfort in making donations to groups that have already attracted other corporate gifts. It may be an unfair prejudice, but donors perceive an organization as less likely to be fraudulent or otherwise troublesome if it has received many corporate gifts in the past. By donating to well-established recipients, officers protect their own reputations and those of their employers. Attracting many donors may also be seen—again unfairly—as likely to correlate with a nonprofit’s success.