Competition and Collaboration in Business Fundraising

You’ve probably always thought you had some degree competition for your services and lots of competition for funding from other nonprofits in your community. But have you thought about whether or not you are competing with for-profit companies? If you are, how can you turn these competitive relationships into collaborative ones? And why should you think about this?

There are several reasons to think more collaboratively. First, businesses, as well as foundations, often like to fund programs rather than individual organizations that might be providing these programs. Second, if the business community sees you as competition, why would they want to support you financially?

If you think you couldn’t possibly be considered competition for a for-profit, consider these examples:

  • Nonprofit universities that have for-profit competition (i.e., Phoenix University, the largest university in the United States)

  • A performing arts organization, such as the ballet, in a community like Las Vegas, Nevada, or Branson, Missouri, where for-profit sources of entertainment abound (or even in a small community with one for-profit movie theater)

  • A nonprofit hospital that competes with a large for-profit hospital in its community, such as Kaiser

  • A museum restaurant that competes with locally owned specialty restaurants nearby

  • A hospital gift shop that happens to be right across the street from the Hallmark store

  • A YMCA that competes with the local gym

  • A local senior center that provides meals-on-wheels that competes with a for-profit eldercare company that provides services to cook for seniors in their homes

While most nonprofits are not competing with the local Walmart or Target, some of them might be operating thrift stores that could be conceived as competition for low-end department stores.

Think about your organization and how it might be competing with some local for-profits as well as who your nonprofit competition might be. (This will be much easier than thinking about your organization competing with for-profits.)

Let’s list the nonprofits and for-profits that might compete with your organization. Remember to think about the specific programs you offer. While the senior center provides things no one else does, those meal-on-wheels programs, for example, might be considered competition to the for-profit eldercare company.

Now that you are aware of these programs and who your competition might be, there are two things that will help you raise money form the business community. You should (1) determine how you might collaborate with the other nonprofits listed in order to seek funding from a company—remember that businesses want to get the most bang for their buck, and (2) determine if there are ways you can partner with the for-profits that might consider you competition.

This will take some creativity on your part. Bring the program people in your organization—your volunteers, your board members, and your executive staff—together with your CFO and development director to help answer these questions. It might take several days of brainstorming. Perhaps set aside an afternoon for each program your organizations runs. You might also add to you lists any contact people you have good relationships with at both the nonprofits and the for-profits.

These are just a few examples. I am sure your brainstorming will uncover many ideas you might not have thought of. And don’t forget to develop your case for support and list of contacts at these nonprofits and for-profit companies so you’re ready to make your approach once your brainstorming is completed.

To learn more about this, buy my books, Raise More Money from Your Business Community and Raise More Money from Your Business Community—The Workbook. Get them here: book http://bit.ly/215wu9L  Workbook: http://bit.ly/1PE9C0d .

Developing a Plan to Approach Companies

If you followed my last blog, you have a list of companies that could donate to your organization. Now you have to determine who the real decision makers are in each company and how you can get in front of them to present your case.

Remember that the decision maker might not be the person who has the most visibility in the company. It could be the CEO, or it could be a community relations director, or head of a corporate foundation. It could be an employee committee. So do your research first. In most cases, it will benefit you to build a relationship with the CEO. Even when there is a foundation, an employee charitable giving committee, or a community relations department, the CEO most likely will have a great deal of influence over these other “decision makers.”

Let’s focus on determining the decision makers for the top ten prospects on your list. You can use a worksheet in my workbook to help.

Once you’ve determine if there is a corporate foundation, you can focus your research efforts on the foundation. You can make up a grid using the following questions:

  • Does this foundation support our type of organization?

  • Does this foundation give the type of funding we seek (i.e., operating, capital, endowment, program)?

  • What are the minimum, maximum, and average grants?

  • When do we apply?

  • When is a decision made?

  • Who are the trustees?

  • Is the CEO among the trustees?

You will want to know if the CEO is a trustee. Also try to determine through informal research how much influence the CEO has over decisions of the foundation. This will help you prepare your cultivation efforts.

For companies that have a single decision maker, your job might be a bit easier. At least you only have one person to research and one major relationship to develop. You can develop a worksheet or use the one in my book to help you determine the information you need to know:

  • Who is the decision maker

  • How accessible is this person?

  • Who is the gatekeeper

  • Do we have an existing relationship with the decision maker?

  • What do we know about the decision maker’s interests and habits?

Determining the Company’s Areas of Interest

The information you’ve filled in on you grid for those companies that have a corporate foundation will help make it easier to determine whether the company’s interests match your organization’s needs. For those companies without a foundation, this research might be but harder, but not impossible, to gain.

Following are some ideas you can use to research the company’s interest:

  • Check the company’s website to see if it has a community relations or corporate philanthropy section and see what kind of projects it has funded in the past.

  • Obtain the annual reports for organizations with missions similar to yours and see if the company is listed as a donor.

  • See if any of your staff members or board members work for or have relatives working for the company who might be able to get the “inside scoop” on the company’s interests.

  • Schedule a meeting with the decision maker(s) to talk about the company’s interests and see if there is a good fit.

This last item, of course, assumes that you can get to the decision maker, which brings up the subject of gatekeepers—often the bane of a development officer’s existence. But it doesn’t have to be that way.

Getting Past the Gatekeeper

There are several ways of getting past the gatekeeper. You can (1) contact the decision maker personally, or (2) making friends with the gatekeeper so you can get to the decision maker. Some hints on getting directly to the decision makers:

  • Find out what service clubs, professional organizations, community activities the decision maker is involved in. Then join and get active in those groups yourself.

  • Get a colleague (board member, volunteer, staff member) who knows this decision maker to make an introduction for you.

  • Try calling early in the morning or late in the day. Sometimes the decision makers answer their own phones before the gatekeepers arrive or after the gatekeepers have left for the day.

Making friends with the gatekeeper is always a good idea, because there will certainly be times, even if you have already established a relationship with the decision maker, when the gatekeeper gets “in the way.”

First, treat the gatekeepers with respect. Don’t treat them like second-class citizens, lowly employees, or people who just make your life miserable. If you are in the office in person, pay as close attention to the gatekeeper’s office or work space as you would the decision maker’s. Are there family photos, mementoes, hints about the interests and activities of the gatekeeper? Does she like to golf? Does he have a large family that is involved in sports? (Family photos often give these clues.) Did she graduate from the same university you did? All of these cues are good conversation starters. When calling on the phone, be cordial and ask about how the gatekeeper’s day is going, but don’t waste time with too much chitchat before getting to the reason for your call.

Make sure the gatekeeper knows who you are and the purpose of your visit or call. Don’t try to fudge a solicitation call by saying you are there to get advice. But, if you are really are there to get advice, make that known.

Acquaint the gatekeeper with your nonprofit and its mission and programs. The gatekeeper might have a family member who receives services, works at your nonprofit, or sits on the board. The more the gatekeeper knows about your organization, the more likely it is you will get past this person to the decision maker.

Okay, so now that you have a good idea what the interests of this company are, you can enter them onto a grid through which you will track the best “matches” for your organization so you can focus your energy on those companies that are the most likely to provide support.

Please note that you might have several programs that meet the interest of this funder. So leave plenty of room on your grid for multiple programs.

Buy the workbook here: http://bit.ly/1PE9C0d

 

Identifying Giving Opportunities from the Business Sector for Your Nonprofit

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.

Matching Gifts

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

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 presence

  • Brand

  • 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?

  • Money

  • 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.

Sponsorships

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

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.

Multiyear Pledges

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.

The best way to accomplish these multiyear pledges is to ask businesses how they prefer making their gifts.

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.

Grants

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

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.