Philanthropy: Is Your Company Squandering a CSR Opportunity?

If your company is philanthropic, but you're not matching your executives to nonprofit boards in a purposeful way, then your company is missing out. Missing out on a number of valuable opportunities, including: government and community relations, economic development, leadership development, and effective stewardship of your costly grant-making. This is particularly relevant for companies that are expanding into new markets here in the U.S. or abroad, businesses that wish to engender good will, and corporations that seek to further develop their executives for leadership.

If your business is contributing $500,000, $5 million, or tens of millions in philanthropy, you can leverage your investment for benefits for your company and employees, and a higher impact in strengthening the communities where you have an interest. The key is to a) train and prepare your executives to be effective board members and potential board leaders, and b) place your executives on nonprofit boards in a thoughtful and purposeful process based on the interests of each person and the needs of each nonprofit.

The Win-Win-Win

Benefits for your company:

  1. Government and community relations: Be a key player, collaborating with government and civic leaders, in developing the economies and health and welfare of the communities where your company has an interest.
  2. Economic development: Ensure the vitality and sustainability of the communities where your customers and employees live and work. It's good for business.
  3. Leadership development: Provide unique experiential learning opportunities for your executives to build their leadership skills. On boards they will engage with peers to envision the enterprise's greater potential, create consensus, build a revenue model for success, generate revenues, provide legal and fiduciary oversight, assess outcomes, and lead for success. These are valuable business skills your executives will bring back to work.
  4. Stewardship of grant-making: Ensure the effectiveness of the organizations where your company invests funds.
  5. Board governance: Provide your executives with direct experience about the roles and responsibilities of boards, ethics and accountability, and crisis communications and management; they'll be better executives for it.
  6. Expertise on regional and global issues: Build expertise among your executives regarding regional, national, and global issues related to economic development, renewable energy and resources, education, health care, poverty alleviation, housing, emerging markets, and so on. This is knowledge that is useful for your company in making strategic decisions.
  7. Relationship-building: Provide opportunities for your executives to meet colleagues from diverse backgrounds who work at other corporations, as well as academia, nonprofits, government, and so on.

Benefits for nonprofits:

  1. Board building: Gain access to high quality board candidates with valuable business skills, such as strategic planning, finance, accounting, law, human resources, government and public relations, and so on.
  2. Fundraising: Gain board members from donor companies—often in the best position to raise funds and advocate for the nonprofit.
  3. Resources: Gain access to other executives at the same company who have skills and expertise that is useful; to company volunteers; and potentially to a variety of other amenities, such as meeting space, printing, etc.
  4. Public relations: Potentially gain access to community leaders via the corporate board member.

Benefits for the community:

  1. Stronger and more effective nonprofits
  2. Healthier and more educated citizens
  3. Better community resources, such as parks, recreation, museums, and so on
  4. More vital and sustainable economy

Training and Placing Your Executives on Nonprofit Boards

The key to a good match between a company executive and a board is this: the fit between the board candidate's interests and the nonprofit board's needs. Success is when the newly matched board member is sitting in her first board meeting and thinks to herself, "Wow, I love this organization and this board. I'm so excited." And when the nonprofit CEO and board chair are thinking, "Gosh, we are so lucky to have gotten her on the board. She's just who we needed."

When the fit is right, then the executive on the board will happily expend the time and effort to add value, thereby reflecting well on herself and the company, and advancing the nonprofit. She'll delight in her board service. It's a win-win-win. In such cases, the board member is likely to rise to a leadership position, adding even further to the value of the experience for the company, herself, and the nonprofit.

Successful matches happen through a thoughtful and purposeful board matching process. And by the way, I rarely meet a board candidate who knows what issue interests them from the outset of the process. Most candidates have many interests, and seek to learn about a variety of opportunities. As one candidate was deliberating over his final choice at the end of a four month process—a choice between a global, national, and regional board—he sighed and mused, "This is like a process of self-discovery."

Board training is equally important. It should be highly interactive and offered on an ongoing basis while board members move forward facing dynamic challenges and, hopefully, ascend to leadership positions.

Once your company invests funds in the community, make sure you are making the most of the opportunity. It's in everyone's interests to have more vital and vibrant communities and effective leaders.

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9 Comments

  • ClassyMike

    This is really a great discussion chain (and article - Thanks Alice). As long as both parties are clear about their objectives and expectations, "conflicts of interest" should be easily avoided, or identified should they arise.

    I think the potential value far outweighs any potential problems. Most nonprofits are started out of the founders' passion for a cause - not necessarily with a solid business plan. They'd benefit greatly from a board member with a solid corporate resume.

    Another factor is sponsorships - NPOs are always looking for sponsorship money, and to align themselves with businesses that are well respected among their beneficiary group and/or donor demographic. Planning board appointments with respect to demographic interests can be a real win for both parties.

  • Dan Holin

    Well said and so true. We were inspired and helped by Business Volunteers Unlimited and have launched a similar program that recruits, trains and then matches corporate execs to nonprofit boards in smaller, poor second tier cities that Jericho Road Project serves. We are now working with Raytheon and a growing roster of other companies on this initiative.
    Not all nonprofit boards are ready to take advantage of a great new board member. Yet changing the culture of an existing and under performing board is a challenge. Whether, when and how to place a great new board member on an existing board takes time, knowledge and skill.
    Thanks for a great post.

  • Alice Korngold

    Dan, thanks for your feedback and comments. Thank you also for sharing that BVU, which I founded in 1993, and ran for 12 years, is of such value to you! We began replicating the model in the late 90's and I'm so glad that is continuing! Yes, when and how to place a great board member takes time, knowledge and skill. I'm sure you are and will have an important impact. Alice

  • Chris MacDonald

    Alice:

    This is really interesting.

    But can you clarify: are you talking about placing executives on the boards of nonprofits that are receiving donations from your company? If so, how do you handle conflicts of interest? Given that, as a Board Member, one's primary allegiance must be to the charitable organization, the executive cannot be expected to be serving the *company's* interests while in that position.

    Chris.

  • Alice Korngold

    Chris, thank you for asking for this important clarification. Yes, without question, a board member's primary allegiance must be to the nonprofit; that's the duty of loyalty - a legal and fiduciary responsibility. I train each and every board member whom I place about the duties of care, loyalty, and obedience. And I teach this to every board that I train. As to companies making financial contributions where their executives sit on boards, I actually insist on it if I am engaged by the company to place their executives on boards. And if I consult to a nonprofit board, I encourage the board to consider an expectation of board members' companies to make financial contributions to the nonprofit. Why a contribution from the company? To demonstrate their support for the nonprofits where their executives serve. Furthermore, how can boards and nonprofits ask "outsiders" (companies and foundations not represented on the board) to be donors if the board members' companies are not even giving themselves; in reality, that doesn't work. Outsiders rarely are willing to fund nonprofits unless board members and their companies are giving. As to your concern about a conflict of interest: A company giving money to a nonprofit gives that company no rights or expectations related to the nonprofit except to be thanked and recognized for their generosity. Also, some companies like to offer opportunities for their employees to volunteer at companies where the companies make contributions. If a company expects anything more than recognition or volunteer opportunities, then that's definitely something for the board to consider; that is potentially a conflict of interest, which falls under the duty of obedience. Chris, I hope this is helpful. And thank you again for asking.

  • Chris MacDonald

    Thanks, Alice, that helps. I just think it's important when "selling" such board involvement to companies that it be clear to them that the benefits are, and must be, rather indirect.

  • Alice Korngold

    Chris, I agree with you entirely! The board member's interest must be to add value in helping to advance a nonprofit where he/she truly cares about the mission, and companies cannot put their executives in a conflict of interest. And, by the way, companies and their executives will only make a good impression in the community and among civic leaders and colleagues if in fact the company and its execs are genuinely having an impact in advancing nonprofits and the community, and not abusing their positions on boards. (Correction: In my prior comment, I meant to say "Duty of Loyalty" not "Duty of Obedience.") Again, Chris, thank you for making that crystal clear!

  • Nicole M Klebieko

    On the flip side, I have found that sometimes those involved in non-profits don't mingle with other non-profits or their counterparts in the for-profit sector missing out on a valuable opportunity to meet potential doners and board members. Many times the non-profits belong to Chamber of Commerce or other local organizations and their volunteers/employees have access to mixers, meetings, lead shares, conferences etc. If I can make a suggestion to those in non-profits it is to get engaged in your community as a partner of the community, positive results are sure to follow.

  • Alice Korngold

    Nicole, great point! Building visibility and awareness and developing relationships for the organization and with colleagues is highly valuable for the nonprofit. Alice