Corporate Fund Raising in a Turbulent Economy

Tuesday, August 19, at 12 noon, U.S. Eastern time

Mark W. Shamley is president and chief executive officer for the Association of Corporate Contributions Professionals in Orlando, Fla. The association is a membership organization of some of the nation's largest corporate philanthropies.

Nancy Williams is the national program director for the Verizon Foundation, in Basking Ridge, N.J.

A transcript of the chat follows.

Peter Panepento (Moderator):
    Welcome to today's live discussion about the state of corporate giving. As many of you know, this is a challenging time for charities. The economic slowdown has hurt individual giving and sliced the amount of money available from state and federal government. The economy is also putting the squeeze on the amount of money available from companies. Of the 77 businesses in a recent Chronicle survey that offered predictions for how much they would donate in 2008, 50 said their giving would remain the same as last year, 21 expected an increase, and six said their donations would drop.

Peter Panepento (Moderator):
    How can your group succeed under these circumstances? That is the topic of today's discussion. For the next hour, we're pleased to have two experts on corporate giving -- Mark W. Shamley and Nancy Williams -- ready to answer your questions. They'll be available to talk about the current market -- and offer some tips on how your organization can navigate these tricky waters. To ask a question, please click on the "ask a question" link on this page.

Peter Panepento (Moderator):
    Without further ado, let's get started.

Question from Michael Seltzer:
    How will the corporate downturn affect in-kind contributions, cause-related marketing, and event sponsorships?

Mark W. Shamley:
    We expect in-kind contributions and CRM to remain flat, and event/dinner sponsorship to take a hit. In-kind and CRM tend to make up significant portions of a company's strategic giving portfolio, which is usually part of a multi-year commitment/campaign.

Event/dinner sponsorships typically fall into the category of non-core giving. As a result, these line items are affected during an economic downturn. CRM, because of the transactional nature of these promotions, allow consumers to particiate along side companies. In-kind donations can mean a number of things (product or services). In any case, we expect that these forms of giving will remain strong during these tough times.

Question from David Stocum, NM GLBTQ Centers:
    We are a start-up with our 501(c)(3) pending from the IRS. I have two questions. First, do we need to wait until the IRS responds to start approaching Corporations? What should we do to overcome the start-up issue?

Nancy Williams:
    Verizon Foundation requires approved documentation from the IRS before considering funding. The Foundation's online grant system is automatically updated quarterly when the IRS approves new non profit organizations. In the meantime, you can be reviewing corporate foundation websites to see what are their primary social issues.

Question from emmanuel agbovie ,small nonprofit:
    How does a small nonprofit organization outside of the United States benefit from grants or gifts-in-kind from companies or philanthropists in the States? We are interested in child-health and nutrition for kids of school-going age. Thank you.

Mark W. Shamley:
    US-based corporations are increasing their social investments internationally. First, you must understand that regulatory/compliance requirements may make a direct contribution to your organization challenging. However, companies do partner with larger NGOs to facilitate financial and product donations to local small international nonprofit groups.

You have to make a compelling case for support to companies that have an interest in the social area you address. They are not going to find your organization! You must reach out to the companies that fund child-health and nutrition. Share the history of your organization, be prepared to discuss your financial health, and highlight the impact your organization has in this area.

Question from Kim Hale, Columbia College Chicago:
    What is the best way for an academic library to be considered as a corporate partner, given that there are so many deserving charities all competing for the same limited resources? How can we stand out?

Nancy Williams:
    Be clear about why and what you want from a corporate partner. State the purpose. Tie to what is the core business of the corporation.

Question from Mike Lane, World Vision:
    Is corporate product giving increasing or is the emphasis on cash? Do corporations prefer to give in the US (for tax purposes) or to give regionally as close as possible to the need in the developing world?

Mark W. Shamley:
    Product donations have become the "new" currency of corporate giving. The emphasis on product giving is tax-related in-part, but also it is increasingly effective in addressing humanitarian issues. In addition, product donations have a positive consumer impression when the contribution is thoughtful and timely.

Companies prefer to give were they have a business presence by using a wide range of charitable assets across the global to drive their social and business agenda - including product.

Question from Adam, large private university:
    What are some basic things that a large private university located in a major city must keep in mind if they want to separate the institution and its funding need from others who they are competing with when making appeals for philanthropic support to support a university based initiative with an identified need?

Nancy Williams:
    Stress what differentiates you from other university-based initiatives around objectives, programs, results. If your program is similar, corporations like to see collaborations across entities like universities.

Question from Malcolm Furgol, American Association of State Colleges & Universities:
    Does the expected decline of corporate giving include corporate contributions to R&D that may have an economic development impact? Since private R&D spending has increased exponentially over the last few decades is it realistic to expect that trend to continue?

Mark W. Shamley:
    It's difficult to say what impact the economic downturn will have in private R&D support. These investments typically are results-based, non-philanthropic grants that are directly linked to business imperatives.

We are seeing a broad shift in curbing corporate expeditures to meet the demands of a softening economy, and I don't see any reason why investments in R&D are immune to these trends. Having said that, I don't have any evidence to show that continued growth in R&D spending will not continue.

Question from Carol Leone, tribal museum:
    Are corporations looking favorably on arts and culture when there are so many needs that seem more urgent?

Mark W. Shamley:
    Yes. A&C helps define the fabric of a community, and companies understand the importance of supporting the Arts from a quality of life and economic perspective. In these challenging times though, contributions that are considered non-strategic will not make the cut, so it's imperative that you focus on making a "business case" for funding your Arts programs.

Question from Katherine Wyatt, Warrick Dunn Foundation:
    What is the most effective way to build a case for support during this type of economy?

Nancy Williams:
    Be clear about objectives, past results, target audience and program outcomes.

Question from Penny Shubnell, Crest Forest Seniors Club:
    We live in a rural area in the Mountains where we do not have large businesses to seek corporate giving. What advice could you give to a Seniors Club who desparately is seeking funding for a Center replacement for ours which has been now deemed uninhabitable due to flood damage? We are currently working with the County who owns the building in question as well as the Department of Aging and Adult Services.

Mark W. Shamley:
    This will be an up hill battle (no pun intended). Companies tend to give by focus area in geographical regions of interest. Securing funding for capital projects will make it even more difficult, as these transactions often have naming rights linked into the agreement.

I suggest that you focus on individuals and small businesses (individuals make up the largest segment of giving) in the surrounding community - these are your most likely donors. You also could consider establishing a community foundation to raise funds for this effort.

Question from Nadia Miller, Wildlife Alliance, small nonprofit:
    We have approached two corporations this year and been turned down for sponsorship and general operating support. The reason they both gave was that their contributions budget has significantly decreased. How can my organization make themselves stand out in the crowd and make the cut for corporate support?

Nancy Williams:
    Similarly, the Verizon Foundation does not fund general operating support. Our focus is on programs with measurable outcomes. Visit our website at www.verizon.com/foundation to learn more about our funding criteria and program priorities.

Peter Panepento (Moderator):
    A quick note regarding operating support: We're playing host to a live discussion on this topic on Tuesday, Sept. 2. You can find out more here: http://philanthropy.com/live/2008/08/operating_support/

Question from Malcolm Furgol, American Association of State Colleges & Universities:
    As corporations cut back on their philanthropy will the cuts be from their programmatic side of giving (as in competitive grants overseen by their corporate foundation) or will it be more evident in direct donations? If an institution of higher education is hoping to begin a dialogue with a corporate foundation over one of their grant programs should they hold off until the economy improves if they have no prior relationship or are there steps they can take to increase their chances of initial funding?

Mark W. Shamley:
    We anticipate that companies will make adjustments to giving from both their foundation and corporate fund. Corporate Foundations that have large endownments are better equipped to maintain existing giving levels. The downsides are twofold. One, a small percentage of corporate foundations have large endownments and two, foundations in general are more restrictive in their grantmaking.

I suggest you take this time to identify and research prospect donors, as contribution managers are looking to maintain the relationships they currently have - not add new ones.

Question from Linda Caradine, CAP Foundation:
    My Foundation is the philanthropic arm of its professional association. What would suggest that a Foundation of a specialty group do to expand its current corporate support or entice new corporate giving?

Nancy Williams:
    Conduct research to determine private and corporate funding in your specialty area. Seek ideas, suggestions from your current funders. Focus on programs and projects that have a timeline and are results oriented.

Peter Panepento (Moderator):
    We've reached the halfway point in today's discussion. If you've asked a question and haven't received an answer, please stay tuned. We'll post a response as soon as Mark and Nancy are able to answer it. I also encourage you to submit your questions now before we get too close to the end of our hour. To do so, please click on the "ask a question" link and fire away.

Question from Dorcie Dvarishkis, Community Medical Center Foundation:
    As a nonprofit in Montana, where much of the business is small business and very few corporate headquarters exist, can you share any strategies for making greater inroads into corporate/family business support?

Mark W. Shamley:
    Making a business case to support your organization is critical with small to mid-size companies. As a medical center Foundation, you can make a compelling aurgument for affordable health care in your community.

Small businesses are impacted drastically during an economic downturn, having to make decisions about staffing and continued benefits for thier employees. If you can make case for how your organization can outset costs in this area, then you will get their attention/funding.

Question from IVW, BBBSPS:
    What is the best way to approach companies when you don't have a direct connection (volunteers or board member). Are companies interested in/willing to partner despite this?

Nancy Williams:
    A direct connection is not a criteria for the Verizon Foundation. Our grantmaking is a competitive process, open to any non profit seeking funding. However, please visit our website at www.verizon.com/foundation to become familiar with our funding criteria and priorities. We are most interested in what the purpose and goals of the program are, not who you know.

Question from Tim Torgerson, American Cancer Society:
    As a funder, would like to work with the local office of a nationwide charity or work with their nationwide staff person to insure that the funding gets directly to the purposes and geographic areas you want?

Mark W. Shamley:
    It depends on the scope of the charitable campaign. With national programs, companies prefer to work with a national NGO that can execute local elements of their agreement.

In cases were philanthropy is decentalized within the corporate giving area (allowing more autonomy locally), it is prefered that local markets partner with local chapters/charities.

Question from Kay Tuttle, public broadcast institution:
    Assuming outlook is somewhat bleak, what will corporate entities be looking to invest in? What will they be looking for in return?

Nancy Williams:
    I can only speak to the Verizon Foundation. Our philanthropic mission and objectives are long term and do not change based on economic conditions. Our grant making is results-based and we look for measurable, proven outcomes for grants in education and literacy and safety and health, which are our funding priorities.

Question from Judy Campisi, AHA:
    What trends are you seeing in employee giving through payroll deduction and corporate matching gift programs?

Mark W. Shamley:
    Employees want more say in how their contributions are invested into the commmunity. As a result, federated campaigns (employee deduction campaigns) and matching gift programs are allowing a wider range of choices.

However, with recent announcements in the unemployment rate, if employees feel insecure about their their employment status then participation rates and contributions are at risk.

Question from Jill Howell Dugas:
    We are a very small non-profit agency in Louisiana, and our focus is providing services for Sexual Abuse victims. How would you suggest approaching corporate donors with such a "taboo" subject?

Nancy Williams:
    Domestic Violence Prevention is a priority funding area for the Verizon Foundation. There are other corporations which focus on this issue as well. On September 25-27, the Verizon Foundation is hosting a national Domestic Violence Summmit in San Francisco, in partnership with national non profit organizations. As this time approaches, information will be posted on the Verizon Foundation website (www.verizon.com/foundation) before and after the event.

Question from Jill Leininger, Vermont Studio Center:
    Do you see a trend toward fewer gifts & bigger amounts among corporate giving programs?

Mark W. Shamley:
    No. We are seeing more emphasis on funding collaborative initiatives that bring like-minded charities togther to increase the impact of corporate grants.

However to clarify, the idea of strategic philanthropy warrants that companies assess their giving areas to ensure that grants align with their focus. This process sometimes results in narrowing the philanthropic donations to certain causes.

Question from Claudia Freed - Educational Assistance Ltd.:
    When soliciting in-kind donations, do you recommend to approach the corporate Community/Foundation or the Operations/Management contact?

Nancy Williams:
    This may vary among corporations. Also depends on what you mean by in-kind. Verizon Foundation provides in-kind giving through its employee volunteerism program, but does not provide in-kind products and services.

Question from Ali, Leadership based programs for youth/teens:
    We are a small (but impactful) org. that has been serving youth/teens for 29 years. We are attempting to transition from a founder model to an organizational model but realizing the reality that we will need large funding to do so... We have never really done traditional fundraising or even sought out big corporate sponsors. We have found though, that non-profits that tend to help people "when they're down/sick/at risk" seem to be very successful in acquiring funding, but how can we position ourselves to these corporations to "pull at heart strings" and achieve the same success when we are an org that focuses on "keeping good kids good" - we don't serve the at risk. I know that was a mouthful, but any suggestions or initial thoughts?

Nancy Williams:
    In transitioning to a new model, may be a good opportunity to be clear about your story, your past results and differentiate from other organizations. If you have not done so, I recommend developing a strategic plan for the future with specific goals and objectives.

Question from Mary Rennekamp, Seattle Biomedical Research Institute:
    When looking and corporate partner opportunities, it appears as though more and more dollars are coming out of marketing budgets which then want to see a large amount of impressions. If we are a research-based nonprofit which does not produce a lot of collateral with high visibility, where do we fit in?

Mark W. Shamley:
    You fit in with those companies that align with your mission, we call this a "mission match." Consumer-based or retail companies that utilize marketing dollars for brand recognition are not companies you should be soliciting.

Target companies with businesses or a philanthropic focus (i.e. Malaria eradication) that aligns with your research.

Question from S.Michnuk,small non-profit:
    Is it best to target only companies & foundations that have a foot print in the state you operate in or in these tough times to go after as many as you can? Recommendations...

Nancy Williams:
    Recommend you start with corporations and foundations that are in the communities and geographic area you serve. Best do to your homework and align your financial requests with what social issues local corporations are targeting.

Question from Nadia Miller, Wildlife Alliance, small nonprofit:
    In an initial approach to a corporation, i.e. a letter of inquiry, what are some of the key elements looked for? Obviously, a good "fit" in your granting criteria, but what else?

Nancy Williams:
    A good grant proposal stands out with clear objectives, intended outcomes, program timeline, target audience(s), differentiation from similar programs in your area, and collaborations with other organizations so you are not competing for the same dollars from the same funders.

Question from Bailey Mead, Area Agency on Aging 1-B:
    Is it much more difficult for organizations to aquire new corporate partnerships these days? Do you have any suggestions for building these new relationships where they did not previously exist?

Mark W. Shamley:
    Yes. It is increasingly more difficult to establish relationships with companies that have moved toward strategic philanthropy. As a result, companies elect relationships with proven NGOs that can excute their agreed upon activities. These relationships, however, are evaluated constantly.

I suggest that you research companies that currently donate funds to the cause our agency supports. Develop a clear business case and impact study on how your non-profit can support the company's social interests.

One additonal thought, utilize surrogates to help getting access to decision-makers within the corporate walls.

Question from Siobhain:
    What is the likelihood for corporate support for Higher Education Endowments?

Mark W. Shamley:
    With the increasing value of higher ed endowments, this is a difficult contribution to justify. In my opinion, unless their is a symbiotic relationship between the educational institution and corporation, support will be challenging.

Nancy Williams:
    I would like to thank everyone who took part in today's session for the thoughtful questions. I've noticed that many questions were from education-related organizations. The Verizon Foundation is proud of its commitment to education and literacy. I'd like to point you to a free, online educational resource (www.thinkfinity.org). There you will find thousands of free lesson plans, interactive and instructional materials and professional development opportunities. Please feel free to contact me directly at nancy.williams@verizon.com. Thank you for the opportunity to get acquainted with you through this webchat.

Question from Siobhain, Medium nonprofit:
    Nearly three quarters of America's largest corporations expect donations to charity to remain flat or decrease this year, according to The Chronicle's annual survey on corporate giving. Who are the 1/4 that plan to continue to give at current levels or higher? Are these organizations connected to oil or military contractors?

Mark W. Shamley:
    I think your question could be answered more effectively by The Chronicle. Though there are losers in this challenging economy, some industries are doing quite well, i.e. Walmart.

Peter Panepento (Moderator):
    Our time is up. Thanks to everyone who participated today, especially our guests, Mark W. Shamley and Nancy Williams.

Peter Panepento (Moderator):
    You are invited to join us next Tuesday at noon Eastern time, when we will discuss the state of celebrity giving. The following week, on Sept. 2, we'll be back again to discuss the issue of general operating support. We hope you'll join us.