Linda Lysakowski, ACFRE
Identifying Giving Opportunities from the Business Sector
Businesses give in many ways, not just cash. Of course, cash is good! We can all use cold, hard cash. But many businesses support nonprofits in other ways as well—gifts-in-kind, multiyear pledges, grants, employee volunteer programs, sponsorships, cause-related marketing, and matching gifts.
So let’s talk about the opportunities that you can develop or that you might already have within your organization.
Simply put, a matching gift program is a program through which a company will match gifts made by its employees to nonprofits. Sometimes the match is one to one. Other times, it could be one to two (the company gives one dollar for every two dollars donated by the employee), two to one (the company gives two dollars for every dollar contributed by the employee), or even higher.
The Council for the Advancement and Support of Education (CASE) provides lots of information on matching gift programs. You can download publications—or call to request them—geared to specialty interests, such as companies that match gifts to higher education, companies that match gifts to the arts, etc. Most of the big businesses in your community are likely to be found in here; however, some smaller or local companies might not have made it into the publications, so you might need to do a bit of research. But this is “easy money” for you. Employees generally know if their companies match gifts, so you should always remind your donors to see if their employers have matching gift program. You can get information on matching gift companies at this site case.hepdata.com.
Once you have this information, make a list of all the companies in your community that have matching gifts programs. Next, determine if you have any of these employees already in your database (you could have a member of your staff with a spouse who works for one of these companies, donors, members, clients, or volunteers). If you aren’t sure if you have any connections to this company, start asking for this information in your client intake forms, staff files, board profiles, volunteer information sheets, membership applications, etc. Not everyone will be willing to share this information, but if you ask for it, you might be surprised at how many will!
In my book, Raise More Money from Your Business Community—the Workbook there is a tool to help you start a matching gift program and an example of what a completed form might look like.
Cause-related marketing is a program through which a company agrees to contribute part of its profits to a nonprofit, usually in exchange for advertising benefits. For example, putting a heart-healthy endorsement from a reputable heart-disease fighting nonprofit on a box of cereal in exchange for donating a given amount from the sale of each box of cereal.
You might not qualify for a major national program such as this, but you might have your local hair salon donate a percentage of every haircut it does on a certain day in exchange for the promotional benefits the salon gets in your newsletter, social media, etc.
Or you could promote an accountant’s services in your newsletter in exchange for that accountant providing you with a donation for every tax return done in the month of April.
Or a local restaurant could give you 10 percent of the proceeds they take in on National Save the Whales Day if you agree to get your board members or local celebrities to host a table in the restaurant that day (if your mission is saving whales and the restaurant doesn’t have whale meat on the menu). You get the idea.
This type of program might be a lot of work and might also have tax consequences, so carefully investigate the pros and cons before embarking on such a venture. But there might be some easy-to-implement programs that will benefit your cause.
Answering the following questions can help in your investigation:
1. What do we have to “sell” a company?
- Large membership base
- Large employee base
- Social media expertise
- Cause that relates to the company’s product
2. What do we have to “lose” by running this program?
- Labor intensive
- Tax status
- Reputation of company hurts our reputation
- Donor fatigue (our donors might not give if they think getting a haircut/having their taxes done, etc., was a contribution to us)
- Activity hurts our reputation
3. What do we have to gain through this activity?
- Public Awareness
- Ability to add prospective donors to our database
- Ability to recruit volunteers from among participants
- Getting our staff/clients out in the community
Now weigh up the costs/benefits before deciding if this is a venture worth embarking on. And always be certain to have a written agreement between all partners for any cause-related marketing activity.
Often organizations think of events only when it comes to sponsorships. Yes, many businesses love having their banners hanging at events—and they love the publicity the event might receive. It gives the CEO an opportunity to speak from the stage when a company is a major sponsor of an event. However, many businesses are just plain sick of events. They don't want to have to fill another table at a gala, send four employees off to play golf on a workday, or sit through a bunch of boring speeches. So what other things might be they sponsor? Programs!
You might think you don’t have anything worth sponsoring. For example, let’s say you’re a drug and alcohol counseling center. No one wants to sponsor a drunk getting sober, do they? But they might want to sponsor a teen alcohol prevention program in the local high schools. So let’s start using our imagination and think of some programs your organization might ask a business to sponsor. Remember that it will be easily attractive to a fast-food restaurant, a skateboard manufacturer, or a local electronic store to sponsor that teen alcohol prevention program. After all, it’s their market. And sober teens eat, skateboard, and play electronic games!
So let’s think of some programs you might ask businesses to sponsor. A good way to start this process is at a staff meeting with program staff. There is a tool to get you started in my book.
Employee Volunteer Program
You might not think of employee volunteer programs as way to raise money for your organization, but it can help indirectly in several ways. First, if volunteers can do some jobs that paid staff does not have time for, it could reduce your labor costs because you won’t have to hire additional staff. Second, many companies financially support only those nonprofits in which their employees volunteer—either by serving on the board or in some other way. So you might want to reconsider getting companies to invite their employees to volunteer for your organization. In addition to these reasons, businesspeople can often bring valuable skills to your organization that can help it grow. So let’s start by making a list of volunteer tasks your organization could benefit from. Next we will make a list of companies that might be able to provide volunteers for you.
Gifts-in-kind can be a real boon to reducing your budget, or they can be a nightmare. It all depends on how you handle them. If you don’t have a policy for gifts-in-kind, you are opening yourself up to the nightmare side of the equation. Following are some examples you could end up with:
- A gift of land that needs oil remediation, to the tune of a half a million dollars
- A building filled with asbestos
- A warehouse full of lead-based paint
- A thousand pairs of purple pantyhose
- A horse that requires feeding and boarding
- A painting of Elvis Presley on black velvet
- Two dozen ancient computers
Yes. These are all actual gifts that have been offered to, and sometimes accepted by, nonprofits.
On the other hand, I’ve had clients that have saved as much as a third of the cost of a capital campaign because they had gifts-in-kind of everything from the excavation of the land to artwork for the walls of the new building.
First, you need to know whether you want gifts-in-kind, where you will store them if necessary, what you will do with them, and how you will recognize the donors who gave them.
You can easily start this process by making a “wish list” of items you can use that directly reduce your budget.
Now that you have a list of items you need, who can you get to donate them? Expand your previous list to include a column for potential donors.
Some businesses prefer to do their budgeting for charitable donations in multiyear cycles, although this is typically more common when they are making capital campaign pledges.
A word of caution: Too many multiyear pledges might result in the ability to go back and ask for an increased gift, but if you don’t ask for more than a three-year pledge, you can go back after the third year and ask for another, increased gift.
In order to plan your strategy, make a list of companies that are currently giving to you on a regular basis annually. Then develop a plan to contact these businesses and ask if they prefer to be contacted every year or if they would rather make a three-year commitment.
Some companies have corporate foundations, so gifts from these companies are usually considered grants. However, even if they are grants, you should count these gifts under your corporate giving program. These grants will, however, require much of the same research that you would do for foundation grants. The application, however, might be considerably shorter and easier to complete than foundation grant proposals. In order to determine the right ask amount, it will be critical to follow the guidelines of these corporate foundations, which can usually be found on the company website.
Prepare a grid of corporate foundations in your region, and then you can plan your grant calendar for these applications.
Cash gifts, of course, are the preferred gift for most nonprofits. Especially if they’re unrestricted. However, most companies want as much exposure as possible for their donations, so they might be interested in sponsoring a program or event where they will receive public recognition. However, smaller gifts might be made as unrestricted gifts of cash.
Make a list of companies in your community that might give gifts of unrestricted cash. Often you will have to do more research before approaching these companies. Now you have some lists of possible donors and lists of the ways you will ask these companies to give. In the next blog, we will talk about how to approach these companies.