Increasingly, Companies Seek to Tie Giving to Their Efforts to Achieve Business Goals

Winning corporate grants is getting more difficult—and the bad economy isn’t the only reason.

More and more, charities seeking support from America’s largest corporations must sell companies on the argument that working with them makes good business sense. Corporations today often want more control over events, cause-marketing deals, and other kinds of support, as well as the understanding that working with a charity can bring business benefits such as greater visibility, nonprofit officials say.

“This isn’t the two-step anymore; it’s a complex minuet,” says Susan Raymond, executive vice president of Changing Our World, a company that advises charities on fund raising and management.

Ana Gloria Rivas-Vázquez says corporate donors want to learn how supporting her charity, Hispanics in Philanthropy, might educate them about Hispanic communities and help them attract more Hispanic customers.

“They really want to know how this is going to help with market share, what clients do you serve, and who your programs attract,” says Ms. Rivas-Vázquez, vice president and chief philanthropy officer of the San Francisco organization, which advises donors on how to best aid Hispanic people. “To the extent that can be measured, they want to know.”

Marketing Budgets

As companies focus on expanding their market, more of their grants are coming from the marketing budget. Many nonprofit officials say that is a good thing because such arrangements are less likely to be cut during a recession.

For the past three years, Staples, the office-goods giant with headquarters in Framingham, Mass., has worked with Do Something, a New York nonprofit group that seeks to boost youth involvement in social causes, on a campaign to encourage donations of school supplies for needy children. Do Something gets a grant of $150,000 and this year is getting its own line of school supplies that will be sold in Staples stores. The charity receives a cut from each sale.

“It’s easy to lose a donor,” says Nancy Lublin, the charity’s chief executive. “It’s hard to lose a sponsor.”

Crass or Philanthropic?

Staples says it is interested in forging more such partnerships, which come in addition to more-traditional gifts to education charities and other types of groups.

Yet corporate executives and philanthropy experts warn that marketing and philanthropy can get too cozy. It makes sense for companies to support causes that align with what they do as a business, says Bob Corcoran, president of the GE Foundation, in Fairfield, Conn., but companies go too far when they make foundation grants based on what’s in it for them.

“That’s crass,” he says, “that’s not philanthropy.”