Business owners 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 pretty much non-existent, so the only reason for businesses to make charitable gifts is for the recognition. Anonymous gifts are difficult to get credit for, and ultimately self-defeating.
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 guidelines 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 costs 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 or Benevity, but both are targeting large companies who can already afford the corporate foundation.
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, it is possible to outsource the process completely. Your local Community Foundation or United Way may have a grant-making program that you can participate in (for a fee), and there are several companies that will set up and operate your corporate foundation for you. Finally, Valor CSR has an entirely new offering that gives you 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.
