July 31, 2013
Businesses of all sizes enjoy giving back to the community. Some even include charitable activity as a key piece of their socially responsible corporate orientation.
While corporations provide only 5 percent of all direct contributions, they give many more dollars in sponsorships and other cause-related marketing activities, according to Giving USA.
The possibility of creating a multi-year relationship is a major advantage of targeting corporations, as is the fact that one business donation can equal multiple individual gifts.
Although it would be ideal for a company to approach you – and sometimes they do – it is often up to the nonprofit organization to cultivate the relationship.
Create a list of potential prospects
The first step is to create and qualify a list of prospects. Considering the wise use of resources, you may want to look at national and large companies first. Some of these might even operate charitable foundations.
Walmart, Bank of America and Coca-Cola all operate national foundations that award grants on the community level. Regionally based enterprises like manufacturers, certain banks and power companies make awards in their service areas or plant locations.
The advantage to approaching foundations is that it is easier to determine funding interests and the size of the awards. The downside is that foundation staff may not be as directly involved in the community.
That said, some national corporations are taking an ongoing interest in certain types of charities. For example, Walmart has recently offered significant support to food banks through a partnership with Feeding America, a national association.
Research the companies
Regarding local and regional businesses, some additional homework is in order. Which causes or events have they supported in your area? Do any of their employees donate to or volunteer at your organization?
Identify any whose products or services are a good fit for your nonprofit’s mission. For example, you repair houses and they distribute building supplies.
Also think about the companies who sell to your constituent groups. For instance, accounting software companies and banks often support nonprofit small business assistance programs.
Are any of your board members, volunteers or staff acquainted with officers or owners of the company? Businesses of a certain size may also have a giving officer. Contact that person to see if there are guidelines for requests. This is also an opportunity to open up a dialog.
Once you create your target list, find out as much as you can about each company. That means checking out their website, reading their annual reports and learning about their operations, mission and position in the community. Can you make a case for how supporting your organization will benefit or dovetail with the interests of certain companies? Those will be your strongest prospects.
Plan your approach
The next and most important step is cultivating a relationship with the decision makers in the company. If you can arrange an introduction, that is ideal. Or if your prospect is involved with the Chamber of Commerce or other business group, show up and meet them.
Otherwise you will need to make a cold approach. This is best achieved by arranging a scheduled phone call or coffee or meal date. During your meeting, show interest in the contact and their company, allowing them to lead the conversation rather than barrage them with a sales pitch.
Your familiarity with the business will enable you to contribute intelligently to the conversation. Delivering succinct and hard-hitting information about your organization’s impact and successes will intrigue rather than bore. If you’re inquiring about a sponsorship, presenting associated marketing and visibility benefits tangibly is key.
Offering tours and volunteer opportunities is another way to engage a company in your organization. Once they see and understand what you are doing to improve the community they also serve, they will be more inclined to give. Don’t underestimate the value of in-kind donations. Gifts of supplies, equipment, fixtures and vehicles can be as effective in helping your bottom line as cash. Just be sure that you can use the donations or sell them if they aren’t right for you.
The same goes for donations of services. Discounted or gifted professional services can help your organization tremendously, but be wary of appearing to “expect” freebies. Businesses need to generate revenue and profits so they can continue to support charitable activity.
With the right match and careful cultivation, a corporate relationship may last many years and supply multiple benefits. In addition to donations and sponsorships, a company might provide volunteers, board service and in-kind donations. Those, along with an intangible link to a wider network of community contacts, make corporate donors an important asset for your organization.
This article was originally posted on July 31, 2013 and the information may no longer be current. For questions, please contact GRF CPAs & Advisors at email@example.com.