Businesses who want to engage in corporate philanthropy have a few big questions.
- Who should I be giving to?
- How much should I give?
- Once I'm "on the list" will the floodgates open?
And, yes – the floodgates will open. Nonprofits regularly use the annual reports of other nonprofits to source new prospects. By making a donation, you're signalling that you're a philanthropic company, and philanthropic companies are likely to make donations to other charities. In other words, the number of charitable solicitations you receive will increase – sometimes dramatically. Some generous small businesses report that they regularly receive three requests every day.
You can run...
The obvious solution is to give anonymously, but that doesn't make any sense for a business. The tax benefits of corporate donations are fairly limited, so the primary reasons for businesses to make charitable gifts is for the recognition; whether that's brand-building, influencing stakeholders (including employees), or firm differentiation. But these benefits are impossible to get if the company doesn't take credit for its philanthropy.
Most larger firms solve this by using a human shield, typically referred to as a community relations person. Coupled with a separate corporate foundation, this strategy can work well by providing a way to politely and positively deflect requests. Corporate foundations institute giving strategies and grant applications that give the company the ability to say, "no."
For smaller companies, this is an expensive solution. A corporate foundation can cost upwards of $150k in management fees each year, not including the cost of the human shield.
...but you can't hide
One way to reduce costs is to implement the processes of a corporate foundation without actually starting one. While you don't get the reputation and perception benefits of the having your own corporate foundation, nothing prevents you from developing giving guidelines and even collecting grant applications.
But while that makes it easier to decline requests, it actually increases the workload: now you have grant applications to design, collect and review. Software is available to help manage and automate this process, like Cybergrants, Benevity, or Givily but these products are targeting large companies, or companies with lots of in-kind giving.
One inexpensive solution is to add a contact form on your website that collects charity information and informs potential grantees that you respond to requests quarterly. While this won't stop the phone calls entirely, it may reduce them a bit.
If you want an even more hands-off process, Valor CSR has an entirely new offering that gives you all the benefits of a corporate foundation at a fraction of the cost.
It's all (for the) good
Ultimately, the business benefits of a strategic CSR program outweigh the costs. Being known throughout the community as a philanthropic company strengthens customer relationships and employee engagement. With a clear process in place, or a partner to help, too many charity requests is a good problem to have.
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Explore this topic in more detail in our whitepaper: CSR best practices for small business. At Valor CSR, we love helping companies set up effective, affordable CSR programs, especially now that customers and employees require it. Please contact us for more information and a free consultation.