“Arts & Culture organizations received the most lucrative sponsorships” *
NPO & CSR
Not for Profit Organizations (NPO) and Charities have a long and complicated history. Some NPOs have done great and irreplaceable work. Other forms of charity, such as foreign aid, have long lists of criticisms and failures.
There is no criticism here of individuals, shareholders and employees donating and conducting charity work. However a corporation donating or engaging in charity is complicated. In recent years Corporate Social Responsibility (CSR) has brought charity and corporations into closer contact. And as CSR has evolved, corporations are increasingly partnering with non-profits. This growing corporate and charity relationship raises questions concerning the independence and effectiveness of Non Profit Organizations.
NPO & CSR: Corporate Quid Quo Pro
Due to CSR and its related fantasies, corporations are now a large donor to NPOs. Managers will say they believe in the good causes. But in reality corporations expect something in return. Typically brand management, public relations, increased sales and attracting employees. Usually sugar coated as reputation management and talent recruitment.
NPO & CSR: Long Term Partner
A major trend in CSR is corporations partnering in the long term with charities. Firstly, this is actually the medium term, since corporate strategies will change as needed. A charity that fails to deliver will be dropped faster than a bad CEO. Again, managers will say this partnering is due to shared values and beliefs. In reality, it is a customer-supplier relationship between corporations and NPOs. A long term partner charity is easier to control. Corporations have more influence and get better outcomes (for the corporation) when they have a long term relationship with the NPO.
A one time donation gives one time bragging rights to the company. An ongoing relationship will deliver long term returns with reputation management and talent recruitment.
NPO & CSR: Supplier & Customer
Many NPOs have become suppliers to corporations. Akin to advertising agencies or consultants supplying branding. This means they revolve around the corporate donor, not the groups they help. Their services may be designed to impress the target market of the corporation. Corporations typically partner with ‘middle-class’ charities that match the interest of their customers. Charities that deal with unpleasant problems are avoided.
Examples of ‘middle-class’ charities include sending kids to camp, after school programs, the environment and Arts & Culture programs. As a Canadian business survey pointed out, Arts & Culture organizations received the most lucrative sponsorships*.
NPO & CSR: Professionalization of Charity
Corporations don’t just give away money. They expect their reputation management services delivered in a business-like manner. This has led to the professionalization of NPOs. Years ago, charities were staffed by volunteers. NPOs are increasingly staffed by professional university educated philanthropic employees. Many universities now offer programs to train this new caste of expensive professional NPO workers.
NPOs now manage their own brand and market their services to corporations. There is a host of advice for NPOs on how to attract corporate sponsors. From changing your ‘asking strategy’ to demonstrating that you’re a ‘good fit’. The ‘art of the corporate approach’.
Risks to NPOs & Corporations
By partnering with NPOs corporations increase their risks. One recent example is the LIVESTRONG controversy. Former popular-sports-celebrity-cyclist Lance Armstrong’s cancer support charity. Corporations lined up to be associated with LIVESTRONG and Lance Armstrong. When the doping scandal broke and Armstrong seemed guilty, corporations ran away. Nike, RadioShack, Anheuser-Busch, Trek Bicycle and Giro ended their sponsorship as soon as they could.
Note that LIVESTRONG did nothing wrong. But because its ‘brand’ was impaired, corporations dumped it. For all their shared values in the NPOs, corporations run at the first sign of trouble. NPOs should remember this in their ‘corporate approach’.
* from Canada Survey of Business Contributions to Community: The Who, How, What and Why of Corporate Community Investment in Canada.