Is the Death of Corporate Philanthropy Exaggerated?

The end of corporate philanthropy was predicted in a post on the Forbes Leadership Forum. I reckon not and  the answer lies in stirring the alphabet soup.


Paul Klein, who heads business and civil sector consulting group Impakt, encourages any corporations who are giving away their hard-earned dollars to charity to stop.

Klein, admittedly, doesn’t go as far as Milton Friedman famously did, saying that the only responsibility of a business was to make a profit, or as Jamie Whyte implied even more stingingly in the Wall Street Journal, “Corporate philanthropy is theft.” However, Klein spares no punches when it comes to charities. He recommends they “can address the loss of 5% of their revenue by reducing costs, improving efficiency.” (Those who argue that charities should spend more on overheads will wince at that uppercut.) The five-percent figure quoted is the corporate contribution to nonprofit income.

The Giving USA statistics from which the number is drawn also show that corporations’ giving to charities declined during 2013. Yet there has been a steady flow of reports and articles pointing out that companies who do good in the world do well. A 2013 Cone Communications/Echo Global CSR Study says companies are “expected to be an active participant—if not a driving force—in solving the most pressing social and environmental issues.” Cause marketing—such as Toms’ “One for One,” (Product) Red, and Patagonia’s “Common Threads”—has been highly successful. Millennials, we are told, choose to join and stay with companies on the basis of their volunteer programs and social commitment.


However, it might just be a matter of semantics. Aren’t all the above types of doing good by companies forms of corporate philanthropy? Or are they corporate citizenship? Or corporate social responsibility? Impakt on their website extends this lexicon with yet another label: corporate shared value.

Might it be possible to take a contrary view that has corporate philanthropy is alive, well, and kicking—and adopting many different guises? I have always argued that the best thing for corporate fundraisers to do is to decode then rearrange the letters in the corporate alphabet soup. As well as CSR other acronyms in the soup are  CP (Corporate Philanthropy or Partnership), CSI (Corporate Social Investment), CSV (Corporate Shared Value) and more. The solution is to rearrange it as a spectrum. At one end of the spectrum is the hard edged advertising and marketing related type of corporate partnership at the other softer gentler fuzzier community, social and political objectives.

Your job as a fundraiser is to understand what opportunities your organisation can offer and where it fits in the spectrum. Once you know that, you are a better position to identify whom or what department to target. If you have opportunities that are going to drive sales, or enhance corporations product brands then you're at the hard edged and and you need to be talking to sales and marketing executives. If your organisation offers opportunities for corporate volunteering, then you probably want to be investigating the company's human resources Department.  If your organisation has good government connections then you might offer opportunities for companies government or public affairs relationship building. If you are doing good in a particular community, especially one that is linked geographically to companies activities then you will probably be wanting to talk to corporate affairs.

Of course, one of the advantages your nonprofit may have is that you may have benefits at several different places on the spectrum to offer  a company. Take for example a health charity that stages a public event, such as a marathon, that offers branding and product placement opportunities for a business partner.  As well your nonprofit may have strong links  with government health or welfare departments. Such links offer opportunities for business partners to be seen supporting a government backed initiative and may offer networking opportunities to develop  relationships with officials. A major arts festival by which I was once employed offered both these opportunities.  We worked alongside brand and product managers to achieve outcomes at the hard end of the spectrum and with corporate affairs directors and the CEO's office to facilitate networks and contacts at the other more subtle end.

The secrets to developing successful corporate partnerships is to understand your corporate partner. If you can get inside the company's skin, that is see and hear through the corporate executive's eyes and ears then you have a good chance of pitching an opportunity.

Note: Some paragraphs of this blog were first published as a NonProfit Quarterly Newswire on 21 July 2014

What is a culture of philanthropy?

What is a culture of philanthropy?  It’s a phrase that has gained a great deal of popularity over the last few years. 

Google the phrase.  I did, as I wrote this blog and what did I find?

An article by Simone Joyeaux, one of the best known US major gift fundraising pundits.  An article from NonProfit Quarterly Newswire, a leading US nonprofit sector journal. A webinar, by Compass Point (sponsored by NonProfit Quarterly).  Compass Point is a leading US consulting and training  organisation.  Two whitepapers from two more consultants showed up on my lap top screen, and, finally,on that first page of hits, an article in Fundraising Success Magazine by another leading fundraising pundit, Pamela Grow.

By the way, check out all these links and sign up to their newsletters because collectively they will provide a rich flow of knowledge and expertise for you as a fundraiser. I read all of them regularly. (Or, you can take the easy route by checking out Artful Training’s Facebook Page, where such articles are regularly posted)

But, what do I think a culture of philanthropy is. And, what would one look, feel and sound like?  Here’s my version of a fictitious organisation with an embedded culture of philanthropy.

Let's imagine it is an Art Gallery. And imagine that you are donor. Suppose you go in, perhaps to have a coffee and enjoy the latest exhibition. Of course, as you walk in the main entrance, prominent is an attractive 'roll of honour' displaying the names of all those individuals, foundations and companies whose philanthropy has contributed to the success of the gallery. You get a thrill of recognition, as you see your name amongst them.

As you walk past the welcome desk you exchange warm greetings with the staff member who sits behind it. You know each other by name. Likewise, the volunteer who is sitting at the information desk greets you by name. And you too, a volunteer yourself,  have spent some time sitting in this chair. In the café, the barista gives you a special smile. You know that he is a young artist and you ask how he is going?

While you're having your coffee, a young lady from the fundraising office pops down. She says, that the office had heard that you were in the building .She brings the Head of Philanthropy’s apology, that she can't come down and say hello - she’s in a meeting. However, they thought to take this opportunity of sharing with you their latest donor newsletter which is just about to be mailed out. When she is gone, and as you sip your coffee and enjoy your carrot cake , you browse through the newsletter. You are pleased to see notice of a special preview for friends and donors before the next exhibition and you check your PDA and discover that you are free to attend.

Fortified by coffee and cake, you decide it is time to enjoy some art. As a donor and the volunteer you have free access to all the galleries. Nonetheless, you think it is appropriate to put a $10 note into the donations box as you pass into the main gallery. Walking into the gallery feels like walking into a room of friends. There are pictures and objects there that you have long enjoyed and it is always refreshing to see them. In the next room, you are delighted to see a group of children engaged in learning. The galleries Education Officer smiles and waves at you. The education activities at the gallery, you know are sponsored by a local bank.

The main exhibition, too, has a sponsor acknowledgement displayed at the entrance way and discreetly on each of the exclamatory labels that accompany the artworks. Of course, you know that the quality of the exhibitions and the education program and the gallery generally is reliant on sponsorship and donations.

After an enjoyable hour or so soaking in the arts and the ambience you’re heading out again, much uplifted. As you walk out, the gallery director and one of the members of the board are coming in. They, too, greet you warmly. In fact, the board member is an old friend and it was she who first cultivated your interest in the gallery. And, it was the gallery director and she who visited you a couple of years ago and offered you the opportunity of becoming a donor. You remember her explaining how much she had enjoyed making a gift and how it had continued to reward her in many ways. After thinking it over you too made a significant gift. The investment you made has repaid you many, many times.

Misunderstanding corporate partnerships

The furore leading to the withdrawal of corporate partner, Transfield Holdings from the  Sydney Biennale was unfortunate to say the least. However a better understanding of the range and nature of corporate partnerships could have made a difference.

A big part of the misunderstanding related to the nature of the partnership. The second part related to the nature of the partner, Transfield Holdings. The two are interrelated and one can often be a predictor of the other. Fundraisers generally understand this. However non-fundraisers often don't.

Firstly, you should look at the nature of the partnership between a business and  a nonprofit.  To confuse matters there is a whole plethora of different descriptions of business partnerships with acronyms like CP, CSR, CSI, CI and CRM*. Most widely used of all and usually misused as a catchall phrase is "sponsorship". In my view this misuse seems to have also been perpetrated by the Australian Minister for the Arts.

When I'm training fundraisers, I usually talk of a spectrum of types of business partnership ranging from the soft and subtle to the hard and highly visible. At the soft and subtle end of the spectrum are partnerships that are purely philanthropic. This is where the partner is supporting the organisation without expectation of any tangible benefit. This is usually because of some type of shared value or belief. This is what I would argue was in fact the case in respect of Transfield Holdings and the Biennale.  The owners of Transfield Holdings, the Belgiorno-Nettis family,  have been closely associated with the art show since its inception.  Franco Belgiorno-Nettis was the Biennale's first major donor and he until his death, then his son  have been on the board of the organisation ever since.

In the middle of  the spectrum from soft to hard are partnerships with companies wanting to put something back into the community. Usually they want this for business reasons such as wanting good relations with government, a particular community, or the public generally. This is very often the reason why banks, mining companies and oil explorers form partnerships with nonprofits.

At the hard and highly visible end are  partnerships that are marketing driven. These usually involve businesses that have something to sell to the public.  They hope that their association with a non-profit will enhance their brand and  directly increase their sales. Often there are some direct promotional activities associated. For example, a competition or product sampling at the sponsored event. It is this hard and highly visible type of partnership that can accurately be described as a 'sponsorship'. The obvious sign that it is 'sponsorship' are highly visible company, brand or product logos.

This is where the nature of the partner can be a predictor. A FMCG (fast moving consumer goods) company such as a soft drink or an ice cream manufacturer is most likely to be interested in the type of partnership that will have a direct effect on sales and market share.

A company, that doesn't sell direct to the public but is dependent on public or government goodwill for its business is likely to want to be seen 'doing good'.  These companies will talk about 'putting something back into the community'. Sometimes these may be a parent company which owns a large number of brands and products.  For example, Unilever has a strategy quite separate from its brands, such as Dove Soap or Ben & Jerry's Icecream. Whilst the brands and products may be involved in marketing driven sponsorships, the parent company is likely to be involved in a less commercially driven, - a longer term partnership with a community activity. Often that activity is located in a community to which it is geographically linked in some way. For example, where its HQ or biggest factories are, or  its raw materials come from, or from where it hires its workers.

Would the stoush that affected the Biennale have happened if all those involved had a better grasp of corporate partnerships? There are many types and there are many reasons that a nonprofit might be attractive to a corporate partner. This is, of course, the beauty of corporate partnerships for nonprofit organisations.

* Corporate Philanthropy, Corporate Social Responsibility, Corporate Social Investment, Community Investment and Cause Related Marketing. I call the acronyms the 'alphabet soup'!

India's philanthropy long preceded America

Jamsetji Tata established his philanthropic foundation in India before even that of Carnegie.

This is a discovery made while exploring High Net Worth Philanthropy in India. In this blog interview first published in The Clockwork Muse, I explain how I got interested by philanthropy in India, its dimensions – social, cultural and religious and whether there are differences from Western notions of giving.

1. Please tell us a bit about how you got interested in High-net worth giving in India?

 Like many Protestants I knew very little about traditions of giving other than the one in which I grew up – church collections on Sundays, occasional street day appeals and organized charity appeals for the likes of Oxfam, Red Cross and Save the Children.  Somehow I formed the impression that it was the West alone that provided relief and succour to the developing world.  I never read or heard discussions about indigenous traditions of charity or philanthropy other than my own – even in my early days as a professional fundraiser.

Around 2005 I was working for a firm of international fundraising consultants and through them met Major General Surat Sandhu, who had recently retired from Help Age India to become a fundraising consultant. Sometime later, knowing that I was visiting India, he invited me to give a workshop to some Indian fundraisers. For the first time I began to understand a little bit about NGOs and philanthropy in India. As time went on I became more a more struck by the scale and prevalence of philanthropy in India.

More recently when I was considering the focus of my research for the Ph.D. I wanted to do.  I was reading the extensive press coverage generated by Bill Gates and Warren Buffett’s first visit to India to promote the Giving Pledge. There was a great deal of discussion by Indian HNWIs themselves about their practice of philanthropy. I had never seen that in the West!  It seemed to me here was a fruitful area for further research.  Especially, of course,  because Ph.D. research is supposed to cover topics that haven’t been researched before. The sad fact is there has been almost no academic research on any aspect of Indian philanthropy.

 2. What is your background and experience ?

 As I mentioned briefly above, I am a fundraising consultant. I also train fundraisers. I began my career as an actor, then an arts administrator, then I became a fundraiser first in the arts and then in higher education – universities.

3. What have you uncovered so far about giving behaviors in the subcontinent?

 It’s hard to give a simple answer. The subcontinent is a complex mix of religions, castes, ethnic traditions, geographies, histories, politics and social class. All of these are reflected in one way or another in giving behaviors. However once again I would like to reiterate that there is, or are, strong traditions of giving.

4. Any surprises?

 No surprises other than the initial surprise that philanthropy and giving are so much a part of Indian culture.

 5. What is unique about Indian philanthropy, as compared to western notions of giving?

 I wouldn’t necessary claim that there is anything unique about Indian philanthropy, in comparison to Western philanthropy. One thing to remember is that Western philanthropy grew from traditions that were introduced from the East. The first endowed universities and hospitals in Europe were the result of Medieval Knights returning from the Islamic territories of the Middle East where they had been introduced to the tradition of Islamic philanthropy and waqf.

US philanthropy is an infant in comparison to the traditions of the Middle East and Asia having been imported from Europe in the 19th century.

6. Noam Chomsky said recently in an interview that most Indians are indifferent to others’ suffering? Do you agree with this, purely from a philanthropic perspective

I have great respect for Noam Chomsky as an intellectual and a great liberal. I don’t think the reported comment was particularly profound. He made an interesting observation about the reaction of someone else – Aruna Roy. And he tried to generalize it through his own sensibilities. I think he missed the mark and I hope that it isn’t held against him.

 7. What is the role of philanthropy in a society such as India? How does this intersect with the state’s responsibility?

 There is much debate about the role of philanthropy in societies around the world. The philanthropic sector is sometimes called the third sector to distinguish it from the state sector and the business sector. There are some things that can be achieved by philanthropy which cannot be achieved either through the state or by business. There are also some things that can be done in partnerships of all three – the state, business and philanthropy. Of these, I suppose it would be fair to say, philanthropy has the most freedom to innovate and take risks. Certainly this appears to be a growing trend both in the West and in India.


8. How do you foresee the understanding of philanthropy growing in India, going beyond Corporate Social Responsibility? The field is pretty nascent in India, is that right?

 As I have said already philanthropy is far from nascent in India. In fact, in comparison, it is American philanthropy that is nascent! There is much confusion about corporate social responsibility not just in India but all over the world. Corporate social responsibility and corporate philanthropy are not synonymous. In India the debate about corporate social responsibility has been renewed as a result of the government making it mandatory for some companies. However the definition of corporate social responsibility is still far from determined.

You may be alluding to the fact that there is a strong tradition of philanthropy within the business classes and industrial dynasties of India. There is in the public mind some confusion between corporate philanthropy, family philanthropy and CSR because of this. Similar confusion may even exist amongst those business families themselves.


9. Any concluding thoughts.

 A strong motivation for my undertaking this research into philanthropy in India is a belief that the world should recognize that there is much more to philanthropy than there is contained in Western philanthropy. Until now, 90% if not more, of the research that has been published has been published either by American or British scholars about American, British and Western European philanthropy. I was lucky enough to spend some time in the Middle East and was introduced to Islamic philanthropy. That began my curiosity and interest into other traditions of philanthropy.

India is remarkable because within one country there are so many different traditions. I think the world has a lot to learn from India.

The bears and the bees

The bears were thinking.   Sunning themselves on a hillside clearing a pleasant breeze stirring the wildflowers that surrounded them they were grappling with a problem.   “To keep young bears fit and healthy we need to offer alternatives to sitting around eating and sleeping all day long.”  “We need activities that will challenge, educate and provide healthy exercise as well as being sociable and fun -  a picnic with a difference.”

Meantime, in the neighbouring woodlands, the honey bees were pondering another issue.  A bear related issue.  The woodlands were abundant and fruitful.  There were plenty of old trees and hollow logs in which to nest;  and many meadows and other clearings where flowers grew prolifically providing sweet nectar from which to  produce more than enough high quality honey to share with their neighbours.   The problem was that the neighbourhood bears were apt to take liberties, helping themselves to honey whenever and wherever they chose, often damaging bee colonies and the bee environment, despite the bees’ retaliatory stings (which as you know hurt the bee even more than the bear!) .  If only the bees could come to some kind of arrangement with the bears.

As the bees were thinking about the bears the bears started to think about the bees.  Or, more accurately, about honey.  Their plan involved competitions and prizes -  and prizes for bears mean honey in all its various shapes and forms.

And so it came about.  The bears went to the bees and made them a proposal.  If the bees would provide prizes for the games the bears would respond by promoting the honey’s goodness and the bees’ generosity.  As time went by the games became the highlight of the year and the young bears loved the opportunity to compete and win delicious prizes whilst benefiting from the healthy fun to be had.  The organisers were careful to publicize the importance of the bees to the success of the games.  The young bears learned to respect the bees and treat them and all aspects of their honey production with care.   Over time honey became even sweeter and richer, the bears stronger and healthier, the meadows and the woodlands vibrant and joyful; and bee stings came to be considered as some strange mysterious, vaguely remembered thing of the past.

The most obvious and for a long time the most common business partnership relationship is what is described as 'sponsorship'. The classic definition of 'sponsorship' is "an investment, in cash or in kind, in an activity, in return for access to the exploitable commercial potential associated with that activity”. The sports world remains, without doubt, the most obvious place to find examples of sponsorship.  Sports remain today where the bulk of sponsorship dollars are spent by business.  However, there are also many examples of businesses investing in and sharing in the benefits of linking themselves through sponsorship deals with other types of high profile activities, including cultural and educational events and other charitable endeavours.

More importantly, for many of you reading this blog, in the last decade or so there has been an increasing awareness that businesses benefit not only from traditional sponsorship arrangements but also from a wider and deeper choice of partnership mechanisms.  In addition to sponsorship, there is a whole spectrum of differing partnership relationships between organisations and businesses.  You may have come across these terms being used:

• corporate social responsibility (CSR)
• corporate philanthropy (CP)
• community engagement (CE)
• corporate community investment (CCI), and
• cause related marketing (CRM)
• corporate shared value (CSV)

However, you can forget the alphabet soup of CC, CCI, CP, CRM, CSR, CSV.  A better  way of thinking about types of corporate relationships with non profits is as a  scale -  from soft to hard, from philanthropy to advertising, and from long term and low profile relationships to high profile and short term relationships.

SOFT						HARD
PHILANTHROPY						ADVERTISING
<<<<<<<<<<<<<< >>>>>>>>>>>>>>>NON-COMMERCIAL ORIENTATION						COMMERCIAL ORIENTATION
CHARITABLE GIFTS						MARKETING INITIATIVES
LONG TERM OBJECTIVES						SHORT TERM OBJECTIVES
LOW PROFILE						HIGH PROFILE

At one end of this spectrum are very commercial, sales and marketing driven aims.  Mid way are subtler, longer-term economic goals such as communicating positive images to a range of audiences, including employees, potential employees, opinion formers and the communities in which they do business.  At the other end are even subtler goals, sometimes at first glance only tenuously connected with the business such as community and education projects.

Thinking of your organization, which of these goals is you most likely to successfully provide for a corporate partner?  The best way of answering this question is to step out of your shoes and into the business owner’s shoes.  What do you see from their perspective?   What might they hear that would make them interested in you?  What feelings might they have about your nonprofit or the area in which it works?

By being able to put yourself into the shoes of a business or business person and see, hear and feel the world from their perspective, you will find that you can identify what a business is most interested in and, more importantly, what benefits you can offer that will meet their objectives in exchange for their support.