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How to Succeed In Business, What Leaders Need to Know About Corporate Funding

The musical, How to Succeed in Business Without Really Trying, traces the adventures of a window washer who climbs the corporate ladder in several days. Your nonprofit can succeed in obtaining business funding. However, it will take time and effort. This article provides a board primer to help you understand and earn this vital source of nonprofit income.

1. Why do corporations and businesses fund nonprofit organizations?

2. What are some examples of business support of nonprofits?

3. What types of support do corporations and businesses offer?

Four types are typical:

a. Grants or Gifts. These are competitive opportunities that reflect corporate responsibility and citizenship values. For the most part, corporate giving is like icing, a thin layer spread wide.

b. Sponsorships. Cash or in-kind resources paid to a nonprofit. For the business, these represent marketing opportunities and are paid for from this budget rather than the philanthropic one. Sponsorships include many variations like event-naming rights and annual awards.

c. Cause Marketing also relates to a firm’s marketing. The term is used in several different ways. In some cases, it involves a donation with purchase. In others, cause marketing is about “the cause.” A pet food company engages in cause marketing that supports proper pet nutrition with your group and other nonprofits that deal with animal welfare. Besides income, cause marketing helps nonprofits to reach sizeable new audiences. Businesses benefit by increased sales.

d. In-kind. These include goods and staff hours that a business gives to a nonprofit. Often they involve merchandise a business sells or staff loans in the case of employees. In-kind gifts from all sources will be discussed in a fall issue of Added Value.

4. Is this a common source of nonprofit income?

Yes, it represents one of seven sources of nonprofit income. (Read about the others here [1].)  Historically, corporations represent just one to two percent of all nonprofit income. For many, it is a budget enhancement, not a major income source. For others, it is a lifeline. City Year, for example, receives 24 percent of its funding from this source.

5. Besides the money, what are the benefits of business support to a nonprofit?

6. What are the risks?

7. What is your organization’s experience with corporate support?

Learn about the different business and corporate support your agency receives or might receive. Explore the benefits for both sides of the partnership. Ask questions like: What businesses fund us? What return do they receive for their investment? What assets do we have that we might offer? How can we create wins for the business, for us, and for our customers? Do we have the infrastructure in place to do a stellar job with these funds, especially after we get the money?

8. What is the role of the board?

Here are three useful actions for board members to take to support funding from this source.

9. What is exciting about this income source?

The best ways to partner with businesses to earn funds are still ahead of us. While fundraising in the nonprofit field is young (less than fifty years as a profession), business and corporate philanthropy is even newer. Models and ideas continue to be explored, accepted, rejected, and modified. Great potential exists to further corporate and nonprofit goals. The Chronicle of Philanthropy recently reported on a new $10 million dollar alliance between Dow Chemical and the Nature Conservancy that, “exemplifies the type of in-depth collaboration between business and charity that is needed to protect habitats.”

10. What is the general process of developing corporate support?

Grant: Nonprofits find these opportunities by exploring websites and by invitation. Usually the opportunities are well advertized, since announcing the opportunity supports the corporate brand. Expect intense competition. Apply early, because funds often run out. While labeled a grant or gift, assume that these are funds with strings e.g., a recent application asked, “Through a true partnership, where both parties benefit, how will you increase foot traffic at our stores?”

Sponsorship and Cause Marketing: First, many nonprofit need to recognize that they have multiple assets with value. Brent Barootes, with Sponsorship Group, suggests, “Know what you have to sell, conduct discovery sessions, and custom build proposals.” Sponsorship, he explains, is not about large audiences, but the right audiences. For most nonprofits, this represents a new approach. To start, consult texts like Patricia Martin’s, Made Possible By (good summary) and The Sponsorship Seeker’s Toolkit by Kim Skildum-Reid and Anne-Marie Grey (more detailed).

How to Succeed in Business

Corporate and business funding is possible for almost all nonprofit organizations. These include opportunities from large corporations, local businesses in your neighborhood, and those who serve your customers or volunteers. Corporate funding is in its infancy. Discover ways to work with businesses that benefit them, your nonprofit, your customers, and your mission. Don’t wash windows; succeed in earning business income.

Resources

Corporate and business support is only one of seven nonprofit income sources. This article on corporate funding is #4 in a series about each of the sources. For the earlier issues, click here. [2]

For more on nonprofits and funding opportunities, listen to our collection of audio downloads, especially Money-tastic #2: Nonprofit Income Opportunities [3]and Money-tastic #3: Creative Revenue Streams for Your Nonprofit. [3]