Charity Top Tips: Understanding the different types of corporate engagement

Are you a charity seeking to increase your fundraising income from businesses? In this blog series our team at Prospira Global have put together some top tips for engaging with companies based on our past experience in raising funds for charities, and our current work in advising donors on their philanthropic giving.?

In order to be fully prepared to receive funding or build partnerships with a brand or large company it is important to be crystal clear about the type of engagement you are looking for. The three different engagement types listed below each come with their own expectations, and realities, including pros and cons for both yourself and the company you are working with.?

Usually the brand approaching you will already have a clear idea of which approach they are taking, which will come with it’s own implications for you as the charity.

The three common types of corporate funding we most often see are:?

1. Donations?

The simplest form of giving is through philanthropic donations where nothing is expected in return, except most often a tax deduction. This is most often given through a Foundation, but could also be through a company, or even an employee giving scheme. These gifts are usually tax deductible (based on individual country tax benefits and requirements), and can lead to a larger ongoing relationship with the company, but more often than not is seen as a one off ‘no strings attached’ gift.

Ten years ago a donation would have been one of the most common way of a company supporting a charity, with photos of a CEO handing over a larger-than-life cheque being commonplace. Research from Lloyds Banking Group shows that now 70% of companies want to build strategic partnerships with charities instead of giving out ad-hoc donations, a stat which has flipped on its head over the past ten years.

With donations like this, our number one tip is to always have a brief summary (keep it to a simple one or two pages) with a clear breakdown of the funding you need, and the impact a donation will have. This should be ready to go at all times; if someone approaches you, you need to be able to show - this is how much we need, and this is the impact. This could be for the organisation more broadly or for specific projects you're raising for; it could even be graded, demonstrating the different impacts that can be achieved through different donation sizes.?

From our experience we have seen that companies often move quickly, and the charities that are able to respond quickly and clearly on their needs are in a much better position to receive donations when a company has the opportunity to make one.

At Prospira Global we have seen multiple cases where a corporate funder has a short turnaround time, and a quick decision has been made simply based on whether the required information was clear and available.

2. Grants

Grants are sums of money donated to go towards specific projects; these are often tax deductible for the company (in accordance with national tax regulations), and usually require the charity to fill out a grant application or proposal, detailing the programme and how the money would be spent.?

Grants are usually made available only for specific purposes with clear metrics and pre-agreed reporting requirements, they tend to be project based rather than a one off gift, but they are not exclusive. As a charity it is important to remember you have the background knowledge of the project, and as long as you can clearly understand the type of programme the brand wants to support, and why they are interested in funding your programme, you should be able to run the programme as you designed it, without having to make too many changes to your strategy. The company is expecting you to be the experts and act in a professional manner, leading the budget, programme timeline and monitoring and evaluation; they want to see that you are using the grant efficiently and for the purpose that you originally laid out.

When done well, a grant can encourage more collaboration between the funder and the recipient organization than a pure donation; a grant gives some control to the funder as to how funds are used and allows them to set conditions for future funding.?

3. Corporate partnerships

Successful charity / brand engagement is increasingly becoming less about handing over a large sum of money, and more about building a way that two organisations can work together to bring about lasting change. Which brings us to the third type of engagement: strategic corporate partnerships.??

A strategic corporate partnership should be a mutually beneficial relationship, with benefit for both the charity and the organisation; i.e. if the company is donating $1million USD, the partnership should be able to return $1 million USD in value add. The company will often want to ensure that the charity they are building a relationship with resonates with their different audiences, as well as staff. In this way they will benefit from good PR, brand building and the chance to make a difference and support a worthwhile cause. These corporate partnerships are becoming increasingly strategic, often tackling issues that the company cares about whilst ensuring that sponsorship has the greatest possible impact. For charities, as well as funding, benefits can include increased support and visibility, as well as access to benefits directly related to the brand.??

In fact, the main benefit of a corporate partnership is not the funding it can provide, but instead the multitude of resources that the company may be able to make available to you. A company looking for a true partnership will ask again and again - what do you need, how can we be helpful? This question can be daunting when you don’t know what is on offer to you. Think about the communications agencies that they work with; their desktop expertise; staff engagement programmes, and volunteerism days; maybe they can provide you with free software, communications support, advertising space, extra exposure? Could their HR manager come and review your HR processes??

Another opportunity that brands can often be interested in is a seat on your board. For your biggest donors, you could ask that a director of the brand with extensive governance experience could join your board of trustees; they'll be bought in and more engaged with your work, whilst you learn from their expertise. Some companies have been known to want to bring their charity partnerships into their advertising campaigns; building your audience and giving you much greater exposure than would be usually possible. For example check out this Pringles and Movember campaign !

In-Kind support, the transfer of any type of asset other than financial? can also be an extremely valuable way of working with corporates. Whilst this is not explicitly a way of raising funds, it can be a very efficient tool to off-set budget, and free up resources for elsewhere in the charity. With In-Kind support it is important to always assess how the company can help you, whilst ensuring you do not stray from your strategy, or unnecessarily generate extra work and expenses.?

When engaging with a new brand or building a new corporate deal, it’s important to always make sure you know exactly what kind of deal you're talking about; and always ask for clarification, of what they want to get out of the deal, what their ideal situation would be. Every encounter will be different, and it’s vital to make sure you fully understand the expectations, whilst also ensuring you are properly resourced; each type of engagement will require different resourcing, skills and attention.?

Our next blog in this series will be on building practical and efficient resources to enable you to undertake different partnerships.