February 27, 2015 | Read Time: 2 minutes
David Hessekiel, president of the Cause Marketing Forum, helped us put together this list of the major ways companies support nonprofits.
Corporate foundations: Corporate foundations, like their noncorporate counterparts, award grants to nonprofits working in targeted giving areas, often corresponding to a company’s larger goals. Technology companies may support STEM education in order to improve their future job pool, while beauty companies may support breast-cancer research to establish goodwill with their consumer base. Some corporate foundations rely primarily on an endowment, while others serve as pass-throughs for year-to-year company support.
Direct giving: Unlike money from corporate foundations, these funds come directly from the company coffers. A 2013 survey of more than 250 leading companies by the Committee Encouraging Corporate Philanthropy found that direct cash support accounted for 47 percent of all corporate giving, making it the single-largest method by which these companies gave money to nonprofits. By giving directly, corporations reduce overhead. Direct giving also affords more flexibility, particularly when it comes to the return a company receives on its gift. Gifts from a corporate foundation cannot benefit the corresponding company in a way that is deemed “more than incidental or tenuous,” according to a legal breakdown by lawyer David Shelvin.
Cause marketing: This kind of partnership provides direct benefits to both a corporation and a nonprofit. Those benefits can be financial, such as when a company and nonprofit split the revenue generated by a particular product. In another common arrangement, known as cause promotion, companies align their brands in a way that promotes both—for example, when cashiers at a store ask consumers if they’d like to donate money to a preselected charity. Entering into a cause-marketing relationship requires careful consideration from both parties and a business-oriented approach by the nonprofit.
Matching-gift programs: Many companies will match employees’ own charitable contributions. These programs vary in generosity and flexibility. Some run during a certain time of year, and some apply only to certain types of nonprofits (often educational institutions).
Corporate volunteering: Employers often encourage their workers to volunteer, and some offer paid time off as part of their corporate-volunteering programs. Many companies and academics believe these programs increase worker productivity, boost job satisfaction, and even help attract new workers.
In-kind donations: In-kind donations are nonmonetary gifts of products or services. In the corporate-philanthropy world, one of the most prominent examples is pro bono service. The American Bar Association, for example, recommends lawyers do at least 50 hours of pro bono work a year. But in-kind donations can also take the form of products, such as software, pharmaceuticals, or bottled water.
