Fundraising
Fundraising: Corporate Funding

Updated: 6.1.06       Printable version

The primary goal of corporations and businesses is to generate profits. Increasingly, corporate executives and business owners are identifying ways in which their philanthropic contributions can help them meet financial goals. Businesses have long acted as "good citizens" by contributing to charities in communities in which their employees live or to organizations serving populations that overlap with their customer base. While most continue that tradition, they are increasingly spending their philanthropic monies, as well as additional funds from their operating budgets, on endeavors that benefit the community while simultaneously supporting their business goals.

The Independent Sector estimated that corporations donate 5 to 6 percent (or $10 billion) of the $200 billion given annually to charities from private sources. However, that number is misleading. Corporate philanthropy is difficult to measure because funds can come from a variety of places, including departmental budgets, which can be hard to track. Some estimates place corporate giving at $40 to $50 billion annually.

The Basics

There are three major avenues into corporate giving:

• Core Business Interests: The most sizeable corporate contributions often are driven by the company's core business interests and are paid for out of operating budgets rather than with philanthropic dollars. Accessing these funds requires extensive networking.
• Corporate Giving Programs: Many companies have established a grantmaking program. These programs do not have an endowment; grants are part of the company's annual budget and are not subject to the same reporting standards as a corporate foundation. The grants given through these programs are typically aligned with corporate interests, addressing the issues that affect their customers and employees. Many programs have established guidelines and have a designated "giving officer" who can answer specific questions regarding your request.
• Corporate (company-sponsored) Foundations: Some companies create foundations that they either endow or give annual gifts. While the company-sponsored foundation may maintain close ties with the donor company, it is a legally separate organization subject to the same rules and regulations as other private foundations.

The advantages of corporate fundraising are that companies:

• Have a relatively fast decision-making process once you have access to the right person
• Place few restrictions on the use of funds
• Require minimal reporting
• Desire much shorter and less detailed proposals
• Promote greater public awareness of a nonprofit's efforts through their extensive marketing campaigns

Download the entire Developing a Fundraising Plan: Corporate Funding for a detailed step-by-step process on how to tap into corporations to help you with your fundraising efforts.