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If Your Company Is Giving Away Money, Make It Worthwhile

“We’ve been ‘friends’ for a long time. We call. You return our call a few weeks later. We hang on to your every word…But the truth is, we don’t really talk.

“We’ve been ‘friends’ for a long time. We call. You return our call a few weeks later. We hang on to your every word…But the truth is, we don’t really talk. We in the not-for-profit world depend on you, your foundations, and your beautifully typed checks…Still, let’s be honest: Our relationship is fraught.” So said Nancy Lublin, the charmingly candid and effective CEO of DO Something, and founder of Dress for Success.

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Back in the day, there were rarely candid conversations between funders and their grantees. But that’s improving, at least with regard to corporate funders. Today, in the era of corporate social responsibility (CSR), many corporate funders and their nonprofit grantees are beginning to engage in meaningful discussions in order to learn from each other, benefit each other, and accomplish meaningful results for the community. Corporate executives, especially those who are involved on nonprofit boards, gain a great deal of perspective from nonprofits about leadership, as well as global and regional issues, such as water, poverty, workforce development, disaster relief, economic development, among others.

In my experience working with corporations and their foundations for the past two decades, I see that companies are recognizing the advantages to giving strategically, and giving nicely (even when they can’t always say yes to a request). Here are a few of the benefits:

  • Have a more powerful and a measurable impact in addressing social and environmental challenges
  • Take advantage of the branding opportunity
  • Provide an environment where the company’s employees feel good about the company and what it’s doing in the community
  • Enhance the company’s reputation through the relationships that your giving officers establish with nonprofit executives and their board members

Even in a community as large as New York City, it is commonly known among nonprofit executives, board members, and foundations which corporate funders are respectful and concerned citizens (even when they have to say no), and which are not. In a new study by the Center for Effective Philanthropy, one of the five program officers whom they recognize as exemplary notes that, “I bend over backwards not to be arrogant because I think it’s one of the biggest pitfalls in the field.” That was Tara Seeley, grants officer, Central Indiana Community Foundation.

As reported in The Chronicle of Philanthropy, the CEP study sheds new light on funder-grantee relationships.  The CEP study concludes that two predictors of a good relationship between a program officer and a grantee include the degree to which grantees believe foundation staff understand the nonprofit’s goals and strategies, and also have expertise in the communities and fields in which they fund.

Knowledgeable, experienced, and understanding corporate foundation staff is not only meaningful to grantees, but also important to any company that seeks to make strategic funding decisions, have an impact, build relationships, and enhance its brand. I’m also a strong believer that often the best grantmakers have had experience building or running a business or a nonprofit themselves. There’s nothing like having had to sweat payroll; no one can teach you that experience.

It’s exciting to see the trajectory of corporate philanthropy shift from 1990 when shareholders’ money went to the CEO’s pet charity — fairly personal and random, to the present day when CSR is becoming strategically aligned with the corporate brand, mission, and overall business strategy.  This is a winning approach for all concerned, and certainly a productive path to building a better world.

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About the author

Korngold provides strategy consulting to global corporations on sustainability, facilitating corporate-nonprofit partnerships, and training and placing hundreds of business executives on NGO/nonprofit boards for 20+ years. She provides strategy and board governance consulting to NGO/nonprofit boards, foundations, and educational and healthcare institutions. Korngold's latest book is "A Better World, Inc.: How Companies Profit by Solving Global Problems…Where Governments Cannot," published by Palgrave Macmillan for release on 1/7/14

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