This article is part of the New New Rules of Business.
How can nonprofits survive the pandemic? On June 30, as part of the Fast Company Impact Council—an invitation-only group of leaders across industries—one breakout group considered the question. One potential answer: helping corporations understand the business case for supporting nonprofits even in a recession. An excerpt of the roundtable discussion follows.
Led by Fast Company senior staff writer Elizabeth Segran, the group included, in alphabetical order, Kara Barnett, the executive director of the American Ballet Theater; Tory Burch, executive chairman and chief creative officer, Tory Burch, LLC, and founder, Tory Burch Foundation; Scott Harrison, founder and CEO of Charity:Water; Tricia Kenney, chief communications officer of Truth Initiative; Susan McPherson, founder and CEO of McPherson Strategies; Laurie Schalow, chief corporate reputation officer of Chipotle; Dave Stangis, CEO of 21C Impact; and Sheel Tyle, CEO of Amplo.
Scott Harrison: I have a bit of a bearish view on philanthropy, and I think over the next 12 to 18 months, we’re going to see a lot of great charities go under and run out of cash. I think the optimism that serves us as social entrepreneurs well 95% of the time could actually be the thing that dooms many social entrepreneurs in what I think are going to be really uncertain economic times. I have a lot of experience fundraising. And I will say that uncertainty is one of the worst things in fundraising . . . My question is, if things go bad for the next couple of years, how could corporate philanthropy support many of these charities? Or, how could corporate philanthropy not just be the first thing that’s cut, but more deeply ingrained?
Kara Barnett: While we’re spending all of our energy trying to become a digital content creation company, and trying to explore opportunities for digital distribution, it’s not yet clear that there is a revenue model there. And so I think that partnerships are going to be key, because I don’t think people are going to come to arts organizations for the content. I think we’re going to have to partner with brands and with other distribution platforms in order for artists to have work, and for meaningful stories to be told.
Dave Stangis: The downside with corporations that are not thinking about this thing strategically is that if this is a discretionary spend—if I’m writing a pass-through check to my foundation every year for a million or two—this is a variable cost that I stop at a time like this. Part of what we’re trying to do is help these companies think about this as the strategy—to manage risk, build more resilient supply chains.
Sheel Tyle: Even in the startup world, one of the things that I’m noticing with a lot of my companies is none of them have built-in philanthropy programs because all of them are losing money. And then suddenly they go public, and the founders are all billionaires and don’t know what to do with all their cash. And so one thing that I do, but one thing that I’m trying to figure out is: How do you ingrain a culture of giving in startups?
Scott Harrison: [Having a social mission] has given Warby Parker a competitive advantage in recruiting the very best talent who wants to work at a company with purpose. . . .There is this demographic of people who want to work for a cause. They want their work to matter. I think that’s a competitive advantage in a startup, if a company can do it early and do it in an authentic way.
Tory Burch: It is important for Gen Z and millennials. There’s no question. That’s the number-one thing they ask about: the culture of our company. They know about it. What’s interesting, too, is the board—it’s taken me time, but they now realize the importance of the work that we do with our foundation, and how important it is for the bottom line.
Tricia Kenney: This generation is very powerful and knows how to use their influence to create positive change. Corporate social responsibility and giving back is paramount in deciding what companies and brands they support and the companies they ultimately will work for and run.
Dave Stangis: Technology is unlocking some interesting tools that are letting companies and individuals give. . . . Employees have their personal causes. And it means something to them to donate $5 when they feel like it, or $10, or they volunteer an hour, and they get a $10 credit that goes to their charity bank account.
Laurie Schalow: Another way to do it: We just announced a “round up for real change” program. At the end, when you check out online, you round up your bill and that extra cent [goes to charity]. We raised $280,000 in one week, and that’s customer dollars. It’s not the corporation, the corporation is being the intermediary to help raise the funds, but that’s a lot of money that could then go toward different causes.
Susan McPherson: More importantly than institutionalizing giving, we need to revolutionize the old giving. We’re in a new normal. We can’t continue to “give old.” It needs to be tipped on its head and built into the company’s strategy, the company’s business model. As everybody says, it’s a retention tool. It’s a recruitment tool and a reputational tool. That should all be in the marketing and business and innovation budgets.
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