Attracting Corporate Support for Your Nonprofit

Printer-friendly version

As a new executive director, I’ve set a goal for myself to increase corporate giving to our mission. ”Sounds like a plan,” right? But I have some basic questions to answer first.

What’s the best approach?”

“Are there red flags to be aware of?”

“What are the trends around corporate giving these days?” and fundamentally,

“What will it take to attract a new business to contribute to my nonprofit’s mission?”

Jenny Chandler, Executive Director, Dumbarton Oaks Park ConservancyFundraising gurus tell us that, whether you are approaching a large corporation or a small business for support, it is just like approaching any other donor: You have to build a relationship and discover what they are excited about. True, but let’s also consider that once you’ve established a relationship, you still need to find the right channel for a corporate gift that works for that particular business. Most corporations are seeking exposure for their brands (because after all, they are in the business of selling something) so looking for synergy between the brand and your nonprofit’s mission may be your best bet. However, some corporate donors are looking for goodwill not only among their customers, but also among their employees. If your nonprofit can give the corporation’s employees a terrific volunteer experience, don’t be shy about finding a way to utilize their expertise.

The way I look at it, my job is to figure out what type of opportunities will inspire a business to conclude that it’s in the business’s best interest to invest in my nonprofit’s mission. At the same time, I need to be aware of red flags. If any transaction with a for-profit corporation comes close to being more beneficial to the business than it is for my nonprofit, the transaction could result in “private benefit,” which is prohibited by IRS regulations. Consequently, while I’m putting on my thinking cap to create ways for a business to support my nonprofit, I will be weighing the benefit to my nonprofit to make sure that the nonprofit is getting as much out of the relationship as the for-profit business. That leads to another red flag. Whenever a company advertises that sales of its goods will benefit a charity, two things could happen: (a) Customers may be motivated to buy (hooray!), but (b) the arrangement could subject the nonprofit to the requirement to register the sales promotion with the state charity regulators as a “commercial co-venture.” This requirement exists in 22 states.

Certain trends in corporate giving are tracking trends in giving by individuals. Corporations are interested in outcomes. They want to be able to show the world the impact of their “corporate social responsibility.” Of course, crowdfunding is now commonplace and it may become increasingly common for companies to encourage their employees to participate in giving days in the community, which creates opportunities for nonprofits to partner with corporations for marketing messages about giving days. And while matching-gift programs are always valuable for nonprofits, the new gold-standard is to make it easy for employees to make recurring monthly gifts. Whatever the giving mechanism, in the end what matters is finding a way to work with a corporation so that making a gift (whether from an employee or the corporation itself) is easy, and makes the corporate donor happy.  Yes, there are corporate self-interests entwined with corporate giving. Once you know that, take advantage of it! Corporate giving is increasingly viewed through the frame of corporate social responsibility, which we know can be a key driver of sales, customer loyalty, talent retention, and recruitment. With that in mind, don’t be shy to ask a business for support: your nonprofit is helping that business do its business better!

As I’m building relationships with my contacts at various companies, I’ll keep my ears open and make sure that my cultivation conversations are a true dialogue. I won’t be shy about asking my contact at the corporation, “What would success look like for you? What do you hope to get out of the relationship with my nonprofit?”

Here are some of the options I’ll be sure to have in mind to offer to corporate prospects:

As a starting point, since I work for a Conservancy focused on the restoration of a cultural landscape, I will be looking for prospects that are most likely to have synergy with our mission, such as businesses whose products or services intersect with the outdoors, health, and culture, as well as those that support environmentally-conscious living. Second, we host wonderful volunteer events that are perfect as team-building experiences for corporate employees, so I’m going to think about all the ways we can benefit corporate teams by getting them out of the office and into nature and leverage those experiences to enhance the “feel good” effect of charitable giving. There will be similar opportunities for alignment with your nonprofit’s mission.

Corporate sponsorship: If I’m asking a business to be a “sponsor” for an event or program hosted by the nonprofit, I need to be prepared to line up a variety of opportunities for the business to get lots of exposure at my nonprofit’s event, whether through the media (press releases, radio announcements about the event, etc.) and/or print, email, and social media marketing in advance of the event. A corporate sponsorship is a marketing opportunity for a business to make contact with the supporters and stakeholders of a nonprofit. Many businesses won’t even consider a corporate sponsorship unless the nonprofit can demonstrate that communications about the event will reach a large number of social media followers, and/or email in-boxes, or snail mail boxes, and that many readers will visit the nonprofit’s website page where the corporate logo and an acknowledgement of the sponsor’s support will be prominently placed. Increasingly, companies prefer meaningful, in-person connections with the nonprofit’s audiences (such as at a VIP event to which high-level corporate sponsors are invited). Essentially, a corporate sponsorship is an agreement that the nonprofit will offer the business some marketing exposure, in exchange for a charitable contribution. Note that if you structure corporate sponsorships as if the business is simply paying for advertising, the nonprofit is likely to owe taxes on the proceeds as unrelated business income – now at a rate of 21 percent.

Awareness raising:  Can a local business help you attract attention to giving opportunities? Just as corporations would like your stakeholders to know about and support their business, your nonprofit can benefit from the access that a local business has to shoppers. As you are planning events or a giving day, look for opportunities to place a sign in a window of a business downtown or at the cash registers, to raise awareness about your nonprofit’s event, or opportunities to give/join. Even if a business is not giving cash, it could help you attract donors’ attention to your nonprofit’s cause – and signal the business’ customers that it cares about local nonprofits.

Rounding up: A trend I’ve noticed is that retailers may be willing to participate in a “rounding up” campaign. Perhaps you have shopped in a store where you were asked during the check-out experience whether you would agree to “round up” your purchase to the nearest dollar and donate the extra cents to a charitable cause. The extra money added by an individual shopper may only be a few cents, but over the course of a day or week at the check-out counter, the contribution to the nonprofit could be significant. As an example, take a look at Macy’s support for the American Heart Association.  Remember, however, that this type of sales promotion may be regulated in your state and require the nonprofit to register the campaign with the state charity regulator as a commercial co-venture.

Gifts in kind: Excessive donations of used and useless computers have given gifts-in-kind a bad rap, but actually, in-kind donations from businesses can be extremely helpful. If your nonprofit maintains a wish-list, that makes it easy for a corporate donor to determine whether its excess inventory or office renovation could benefit your nonprofit. While this type of corporate support doesn’t increase the nonprofit’s bank account, it does boost the balance sheet: donations of goods and services can free up the nonprofit’s existing financial resources to work in other ways. And remember, giving is based on relationships. Corporate support through gifts-in-kind can lead to gifts of cash down the road, and maybe to finding a terrific board member! 

Skilled volunteers and volunteer events: Corporations can lend nonprofits volunteer labor or expertise that is as valuable as cash. But don’t overlook that running a robust volunteer program may carry hard costs for the nonprofit. (Example: We give our volunteers snacks and water, as well as provide and maintain special tools for them to use; plus we train and supervise them, requiring significant staff time.) Don’t be shy about asking the corporation to make a contribution that will help sustain the opportunity their employees have to volunteer!

Summary

  • As with any donor, cultivate a relationship and understand what motivates the business to be charitable.
  • Step into your donor’s shoes but walk your own path. (Don’t be afraid to step away if your nonprofit is not benefitting as much as the business is.)
  • Businesses can “give” in different ways: make it easy for the business by being creative about offering a variety of ways to support your nonprofit’s mission.

Resources

Find Your State Association of Nonprofits

Find Your State Association of Nonprofits

Connect with local resources and expertise

Find

Connect With Us

1. Sign up for updates

Stay up-to-date with the latest nonprofit resources and trends by subscribing to our free e-newsletters.

2. Follow us on social media