Corporate philanthopy moves towards sponsorship
Delegates included both “properties” with sponsorships to sell (nonprofits, venues, sports teams, etc.) and sponsors. This was one of my favourite aspects of the event — different than most philanthropy or fundraising conferences where almost everyone is from the same side of the transaction. Sponsors were there to network, share information and improve their own practices in building successful sponsorship programs.
I think that those of you working in corporate fundraising will already know this instinctively but everything I heard confirmed that there is a clear trend away from corporate philanthropy towards sponsorship.
Last year, an IEG report documented that a large percentage of North American corporations are switching money away from philanthropy to sponsorship. There is a feeling that the return is better with sponsorships and that companies (especially public ones) have an obligation to shareholders to see tangible ROI for every dollar spent.
In June Charity Village reported on a COMPAS Inc. survey finding that only 27% of Canadian corporate executives felt that for-profit organizations have an obligation to contribute to “the less fortunate.” When asked why Canadian companies don’t give more to charity, 42% said firms are already heavily taxed and don’t have the ability to give more; 36% agreed that it was improper for companies to give away money that belongs to shareholders; and 20% said charities don’t undergo enough scrutiny and oversight to justify giving more.
However you might feel about these sentiments the reality is that we can’t rely on compassion or a sense of obligation for corporate dollars.
In one of the sessions I attended RBC Foundation described the recognition associated with their largest “donation” made in Alberta to date ($2 million to the Reach! health care campaign, to be paid over 10 years). What was striking to the audience was the amount of recognition given — including naming the program and a physical space and logos on everything — for this donation. It wasn’t technically a sponsorship but extensive recognition was clearly key to getting the donation.
There was quite a bit of push back from the audience, asking the RBC representative how this can be considered a philanthropic donation when RBC gets so much recognition? The frustration was clear — nonprofits feel pushed by corporate partners to give benefits plus tax receipts and confused about whether to take the sponsorship or philanthropic approach. The response from RBC: you have to do both. It has to fit with their community-oriented objectives and it also has to give them lots of ways to trumpet their involvement. From a tax-receipting perspective, she said that the recognition had no clear business value (that could be defined) and so it qualifies as a donation. I think most people would agree that there is a real business value to this kind of association with a nonprofit cause. But it is a challenge to put a dollar figure on it.
I have lots more to share from the Congress… a few of the coming topics: sponsorship vs advertising, investing in activation and identifying your assets.
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