Navigating Corporate Giving for Grassroots Organizations

By Armando Zumaya

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“NAVIGATING” IS THE RIGHT WORD for entering the world of corporate giving: Imagine steering your philanthropic ship into a dark harbor as a storm comes up. There are shoals you can’t see; there is a lighthouse and a safe harbor up ahead. Go too fast and you risk slamming into rocks; go too slow and you might miss an opportunity to dock in safety.

I am not sure how many of us own a yacht, but you get the idea. Corporate giving programs for grassroots organizations can be like docking that boat. Many powerful potential corporate partners can not only give dollars to your cause, but also visibility and legitimacy. What follows are my rules you should  consider when approaching a corporate donor, based on my 31 years in the field. My examples are real, but the names have been changed to protect the innocent.

Understand Your Partner

Most companies give to nonprofits for very different reasons than foundations and individuals. They overwhelmingly want to give for public relations purposes. Philanthropy is good marketing and helps companies look good to their customers. As grassroots and progressive organizations, we often find this rationale repulsive, but why? These are for-profit companies after all, so of course their philanthropy will be tied to their profits in some way. If you can make peace with this, it is possible to accept corporate support without compromising your mission and work. Still, it’s important to always keep the public’s perception in mind first, and take your eyes off the size of that oversized foam core check.

I have seen many development directors approach the commu- nity affairs or philanthropic arm of a company for giving. While that’s a good place to start, it’s important to also approach the marketing department. When thinking about which companies to approach, ask yourself about fit: What company serves your community? What company would benefit from being aligned with your organization’s work? Of course, you should also ask yourself whether you want to be aligned with that company too. Think creatively about who your community is and who would want to appeal to it. For example, when I worked at an opera, luxury car companies vied to sponsor us because our audience was their clientele. When I worked on children’s health, healthy food companies approached us to partner with them. Prospecting for a corporate partner can be a lot easier if you start with a good match.

Don’t Sell Your Soul 

When I worked in children’s health, a major soft drink company wanted to give us a massive gift and have a cause marketing campaign. We would be associated with sugary sodas, and our logo would be put on all their bottles. Our leadership rightly killed that deal. It takes courage and integrity to walk away from a gift that size. Too often, organizations don’t walk away. They sell their integrity for a high price, but it’s sold nonetheless. This will ultimately hurt your other fundraising efforts in the long run. It’s difficult, for example, to see an individual major donor who was going to make a major gift but is thinking twice after finding out about your latest corporate sponsor. Also, you have to consider your community’s reaction to you working with a soda company while talking about childhood diabetes. If a corporate sponsorship hurts your program work, it is ultimately is bad for fundraising— and your mission.

To avoid these pitfalls, think about creating a corporate gift acceptance policy. If you’re working on community health issues in poor neighborhoods, create a clear policy on what you will and will not accept. For example, you may not want to accept money from liquor, tobacco or junk food companies. Being clear about these boundaries shows integrity and creates a sense of trust with your staff, donors and prospects. To streamline the process, you can create a corporate giving committee made up of staff and board members that can approve or reject new funding opportunities depending on if they are in line with your giving policy.

Avoid Playing Twister

If you grew up during the 1960s like me, you may remember that game, Twister, where you contorted your body to win. It’s a fun game, but much less so when it comes to corporate philanthropic partnerships. How much can you contort your organization and its mission to win? Look realistically at what the deliverables are. Some companies only want to list your name on their website and get invites to your annual event. Others require a lot of reporting. And some want your staff to wear T-shirts with their company logo, have a video of your executive director speaking on their website, and require your staff attend their corporate events. How much is too much?

Don’t agree to anything in writing until you check with your whole team. Always under-promise what your organization is go- ing to deliver, or else you will risk the eternal ire of your program team. However, anticipate some level of obstructionism from your staff. For some staff, all profit-earning companies are evil, and they will do whatever they can to block any corporate gift. So you might need to do some education and have some forthright conversations with your staff about corporate giving prior to engaging in a partnership.

Assess the Risk of the Partnership

Remember that alignment goes both ways. How will your organizations look next to that company? Do your research on their past donations, their politics, and any history of scandals. How risky is this?

I used to work at an institution where the prospect research- ers developed a risk number for each corporate opportunity. The scores were based on past negative public relations issues in the last 10 years—for example, whether the executives had ever been in trouble with the law and/or whether they had any controversial spokespeople. They also polled the board quietly and privately for their perception of this company: Is the company’s product causing harm in the community or is it contrary to the mission of your institution? Ask yourself these questions honestly. It may be hard to predict crisis and controversy, but it’s easy to identify past mistakes and problems.

In one situation, the high risk was ignored when a large seven- figure opportunity was dangled in front of our top executive. We started a corporate partnership just as one of their products was publicly recalled and their executive was hauled before Congress. For about a year, we had to keep explaining that snafu to every donor and prospect, and I am sure it lost us donors and tarnished our reputation. It’s hard to quantify, but both those effects cost us revenue. 

I have seen some organizations also ask for partnership agreements with back doors. Many companies will put escape clauses in their agreements. If your organization or its employees do something awful and lands on the five o’clock news, the company can terminate your agreement. Make sure this type of clause goes both ways. Analyze partnership agreements for risk. Each company has different types of risks. Have a frank, open conversation with your leadership and board about it and come to a consensus.

See the Trees in the Forest

A common mistake grassroots and progressive organizations make when looking for corporate donations is that they look only at mega corporations. What about smaller, regional companies? If you’re doing community-based work, someone is making money in that community. People eat, drive cars, and buy clothes everywhere.

Several years ago, I was working on a school reform project to improve the schools in a small rural Central Valley town in California. This town was literally one of the poorest in the US. Our mission was noble and bold: to radically improve and reform the public school system. A new superintendent had called in my outside organization to create pivotal change. I needed to  raise $50,000 a year for something as vague as “public school reform” from this town of 24,000 people who were mostly living well be- low the poverty line. How?

Hanging around this town for a day, it became clear to me who was making money there. There were two huge international corporations operating in town, but they were notoriously cheap and not philanthropic. My inquiries to them were bounced up to corporate and went nowhere. So, who else was making money here? The small food markets were all owned by one Chinese immigrant family that had owned them for 20 years. There wasn’t a big chain supermarket. With the help of the 14-year-old son translating for me, I made a pitch to the head of the small grocery stores. He totally got it: The schools were awful, and without good schools, this town would always be poor. He told me, “I will step up and put my money in the pot.” I asked him for $5,000, and he wrote the check five minutes later. That’s low-level corporate giving, but corporate giving nonetheless. 

Using the momentum from this relatively small player, I then went to the banks, hardware stores, and cattle farmers, and asked them for help. If someone who ran a few small markets could put down $5,000, of course these larger businesses would look bad if they didn’t also give. I didn’t have to say that to these businesses directly—it was obvious. 

I ended up raising that $50,000, and showed them the results of their dollars every year, like a return on investment. Every year for three years they all renewed their giving. The big corporations in town eventually, through pressure from their employees, started giving too. Of course, there is also the intangible pride  of having lifted their own community up. That school district is doing incredibly well now, and people are actually moving to that town for the schools!

Smaller companies may not have a history of philanthropy, but they often have strong roots in the community. Approach these companies, and you might be surprised at the results.

Play the Field

Playing the field is a bad expression to hear when you’re dating someone, but a good one when you’re looking for corporate partnerships. If you have a sterling reputation, built over years, if people love your organization, that has great value. For a marketing VP at a company, bringing in a strong cause marketing partnership is good for their company and their career. Consider “exclusive” industry-based sponsorships—for example, your organization will only have a single banking, airline or supermarket sponsorship. You can sell that exclusivity to these companies to sweeten the deal. They are competitive even if they tell you they are not. Play them against each other. If your brand is flying high, if you are getting the love from their customers, then don’t settle— negotiate hard. Do your research, and find out what that company is giving nationally to organizations like yours. Why be happy with a $35,000 gift if they are giving $100,000 in other cities?

Go for the Bank Shot

Companies have lots of buckets, some of which you can’t see. When you ask a company for money, it may come from their foundation or it may come out of their marketing budget. You can hit many buckets in one ask. For example, if you run a domestic violence shelter and you approach a department store, first get the gift amount agreed upon, then start talking about in-kind and other types of giving. Remember this is a business, and they are used to aggressive asks. This isn’t a foundation. Can they donate clothes and makeup for survivors of domestic violence? Can we do a week of special register add-on giving with visible signage for the shelter? Can we send out a slip of paper in the credit card bills for a month that highlights the shelter? Pitch them lots of ideas.

Do Your Research

When approaching and looking for corporate partnership, prospect research is everything. Where and how you approach a com- pany is everything. Is your first meeting with that local supermarket chain with their regional marketing VP or the CEO themself? How do you know who would be more receptive? How can you get to the CEO? We can always cold call, but if you do your research, you can find the connections—through your board, current and former staff, major donors, friends, or colleagues. Who can get you in? Who can make a phone call and give you a warm referral?

Conclusion

Those of you who know my work know I teach and consult around building other types of fundraising, especially individual major giving programs. In most places, corporate fundraising is still going to be less than five percent of total philanthropy. Some areas have more, and some have much less. It’s an important way for our organizations to diversify of our funding. While it is wise to proceed with caution in pursuing corporate partnerships, our caution shouldn’t keep us from exploring these opportunities.

As grassroots organizations, we have to challenge the notion that all companies are bad and only part of the problem. These days, there are more and more socially active and responsible companies. Which ones are in your town? Who needs your donors as clients? It’s an uphill battle to get your first corporate donor, but it gets easier as other businesses see who you keep company with. Keep at it, and learn as you go.

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Armando Zumaya has been in fundraising for 31 years in a variety of roles that have given him a unique perspective on development offices, prospecting and the role of prospect research/management. Learn more at armandozumaya.com.

This article originally appeared in the May-June 2016 Grassroots Fundraising Journal, a bimonthly publication of the Grassroots Institute for Fundraising Training (GIFT). Join Armando, along with hundreds of social justice fundraiser organizers from across the U.S., at GIFT’s 6th biennial Money for Our Movements: A Social Justice Fundraising Conference this August 12-14 in Denver!

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