Issue #107, September/October 1999
Approaching Corporations for Funding
|For more than 30 years, the American Association of Fund-Raising Counsel has published an annual report called Giving USA, which analyzes trends in philanthropy and measures the extent of giving by each element of the private sector. Giving USA 1999 noted that in 1998 foundations, corporations, and individuals gave away $174.52 billion to registered nonprofits in the US. Of that rather staggering amount, corporations gave about 5 percent. Foundations gave about 10 percent of the total, and the lion's share came from individuals: 77 percent from individuals who are still alive, and 8 percent from people giving through bequests.
Many people have remarked on the paucity of corporate giving, particularly in an era when many corporations are seeing record-breaking profits. But the simple fact to understand is that it is remarkable corporations give away any money at all. The role of corporations in America is to make money, to maximize return to shareholders, or to show a profit. Many economists believe corporations serve society best when they are profitable: they hire more workers and invest in more expansion. Others believe that corporations are members of the community and society, and like individuals, service clubs, religious institutions, and foundations, corporations ought to return some of their profit to their communities in the form of charitable giving. About 11 percent of corporations agree with us and give away some portion of their pre-tax profits. Corporations can give up to 10 percent of pre-tax profits. Only a handful give at that level, notably Ben and Jerry's, Patagonia, and the Body Shop. Most give around 1 percent of pre-tax profits.
To start or expand a corporate giving program, you can read any number of very fine books and articles on approaching corporations. For listings and current information, contact the Chronicle of Philanthropy at philanthropy.com. The quickest and arguably most accurate way is to find an organization similar to yours that seeks and receives corporate funding and ask them for tips. Also, talk to development staff in universities and large arts organizations for help. Many are glad to steer you away from mistakes they may have made and to give you samples of letters to corporations, or names of corporate funders who would be most open to an approach by your group.
Finally, the following tips may be helpful:
Approaching a corporation requires thinking like a business. While individuals in the corporation, including the CEO, may be deeply committed to the idea of corporate charity, and even to your organization, they must also balance other demands. What will the stockholders think? Does this increase the bottom line in any way? Will the corporation be swamped with requests from other groups? Show them how they do well by doing good. What do you have that they need? The fact that you are a good group that needs money, and a gift to you would be a tax deduction, describes you and thousands of other nonprofits. It is meaningless to a corporation. The fact that you can open up a market for their products, or give them some positive publicity, or make life easier for their employees, or help guarantee a literate workforce, or eliminate problems caused by drugs, alcohol, or domestic violence is meaningful to a corporation.
Many corporations make non-monetary contributions, which are often easier to get than cash. Corporations will often give their old desks, filing cabinets, computers and computer tables, chairs, and so forth. If you see a corporation redecorating, ask them what they are doing with their old stuff. They may be more than happy to have you haul it away. Some corporations donate the products they produce. Food and beverages are often free to special events, but more expensive equipment can also be obtained. Corporations can also give you space: meeting rooms, banquet rooms, or conference space. They can loan you their staff. Supposing your organization is a complete mess in terms of your accounts. You may be able to "borrow" an accountant for a few days or even weeks to straighten that out. Advertising, public relations, design, management, personnel, and training are some of the staff corporations can loan you. These loans can last for days or weeks, or with some corporations up to a year.
Many corporations have extensive employee matching programs, where they match the donations of their employees, sometimes doubling or even tripling the amount.
The approach: Although it is not imperative to know someone in a corporation to obtain a grant, it does help. Make a survey of your volunteers and board members to insure that you are using all the contacts you have. With or without a contact, a corporation is generally approached with a phone call to determine interest and timing. If the call is successful, a short letter should follow. In two pages, tell the corporation what you want to do and how much it will cost. Let them know how many people will be helped or served and what kind of people they are. Indicate how the corporation will be recognized, but don't dwell on that. The corporation will examine your letter to see if the audience is one they wish to appeal to (i.e. open a new market for them) or one they wish to look like they are helping, or one that their employees will appreciate, and if the exposure is enough to warrant a grant. The corporation may ask for a more formal proposal at this point, depending on the size of grant you are seeking. Don't be afraid to call to follow up your letter, and to find out the status of your proposal. But always be brief, businesslike, and respectful of the time of the person you are talking to.
Kim Klein is publisher and editor of Grassroots Fundraising Journal and the author of Fundraising for Social Change, Third Edition. For copies of the journal or book, contact Chardon Press, 3781 Broadway, Oakland, CA 94611; 510-596-8160; e-mail: firstname.lastname@example.org.