Difference between CSR and traditional funding

Fund-raising. It’s difficult; it’s highly competitive; and it can be costly. Most of all, it is impossible to know how much you will raise through traditional methods. These include mailings, media advertising,fund-raising events, meetings, face-to-face begging, and a host of other activities that take time, planning, and money.

And with traditional funding, you can never stop. It is an everyday, all day pursuit, competing against other organizations that want as much of the “pie” as they can get too. And all of those events – auctions, $-plate dinners, and balls – are bringing in fewer and fewer individuals each year. Even the single-event phenomena (e.g., ice-water challenge, Movember Grow-a-Beard) are not the type of long-term sustained type of fund-raising that organizations need.

The Paradigm Shift
Technology has disrupted the fund-raising sector just as it has every other industry. Companies that promote their products and services online, and large financial enterprises, such as credit card companies, are all vying for a new consumer – a consumer who not only wants a relationship with the businesses from which s/he chooses to make purchases, but who also demands that those businesses demonstrate corporate social responsibility (CSR). And herein lies the opportunity for organizations that must fund-raise.

When fund-raising can be tied to consumer purchases, then an organization has a steady stream of revenue, not based upon events and begging, but upon continued consumer purchases over the long-term.

Consider an early initiative in the area of CSR. Toms Shoes, an American corporation that sells shoes and other products, has a one-for-one giving program. For every pair of shoes it sells to a consumer, it donates one to a needy child somewhere in the world. This social responsibility has spread to other areas of third-world country needs as well.

Other companies have followed the lead of Toms and are now either using a one-for-one model on products or are donating a percentage of each consumer purchase to a major charity.

Credit Card Companies Get On Board
Even credit card companies are getting into the act, as they compete for consumers. They are pairing up with merchants and lowering the transaction fees by donating a small percentage of them to a charity. Both the merchant and the credit card company come off as socially responsible and can use that activity in their marketing, thus generating lots of goodwill.
For example, Century Payments, a Texas-based credit card company donates to the Susan B. Komen Foundation and has a marketing strategy titled “Every Swipe Counts.”

The Philanthropitch
Non-profit organizations have a bit of work to do to get in on the CSR radar of enterprises that have significant amounts to give.
1. It begins with research on current corporate giving and the large areas of focus of businesses. Many of them have established foundations for their giving. In general, those large areas include the following:

  • Healthcare in areas of poverty/great need (e.g., Gates Foundation)
  • Education
  • Eradication of Poverty
  • Infrastructure in Undeveloped Areas
  • Healthcare Based Upon Specific Diseases (e.g., cancer research)

These tend to be areas of focus because the giving relates to sustainable improvements. For example, if a large multinational corporation commits to funding entrepreneurs and small businesses in poverty areas, that funding will result in sustained economic improvement for the long-term
2. Identify those enterprises whose giving focus(es) relates to the work that your organization does. These are your targets.

3. Identify those enterprises who have not yet become engaged in CSR – they can be prime targets once they understand the goodwill they can muster up by publicizing their giving program(s). Often, these businesses are smaller and perhaps more local than huge corporations. They are also easier to get to, in order to make a pitch. Local charitable organizations should begin locally, in fact.

4. The Pitch. Now comes the hard work. Here are five strategies that an organization can utilize to tap the increasingly deeper well of business giving.

  • Choose targets wisely. Just as you want to choose businesses with focuses that relate to yours, you also want to be certain that the product/service of that company is not at odds with your mission. One example of a partnership gone a bit wrong was that between UNICEF and Cadbury Candy. Both took some “flack” because, while UNICEF promotes health of children, candy is not a healthy product.
  • Start locally. Smaller businesses often have not considered the positive publicity they can get by partnering with a non-profit that serves their community. While access is easier and the pitch simpler, however, the amount of funding will be smaller. There may also be “branches” of larger corporations situated locally. While local PR people may have to get corporate approval, but they are easier to get to.
  •  The pitch must include value to the giver. This is really a marketing endeavor, and should be developed by a creative expert. Organizations that do not have large staff often employ college students who are communications or marketing majors on a contract basis. Value includes not just the good publicity. There is greater value in improvement of lives and of community. For example, an organization that provides after-school programs for inner-city youth or scholarships has a long-term community improvement potential.
  • Offering non-monetary options. This can be a good beginning for a longer-term partnership that can lead to monetary funding. Many corporations “give” by providing expertise from their staff; by giving employees paid time to engage in volunteer work, etc.
  • Ease the giver’s publicity efforts by developing those assets in advance. Smart non-profits know that if they plan the publicity efforts for businesses ahead of time and show this plan during the pitch, it serves two purposes: the target sees the organization as serious and helpful, and the target is relieved of the tasks of developing a publicity campaign on its own.

What’s Ahead
CSR is not going away. As consumers continue to demand that businesses doe more than just rake in profits and provide jobs, businesses will have to respond accordingly, if only out of their own self-interest. And for non-profits, the prospect of long-range partnerships with businesses means relief. Of course, those partnerships must be nurtured on a regular basis, but they are far easier than the constant scramble of traditional fund-raising.

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Ashley Kornee

Ashley Kornee is a blogger and freelance writer. She always tries to write about ordinary things in a creative way. You can find her on Facebook and Twitter.