Companies that don't have formal grant systems

Even if the company does not have a specific grants program, don't give up. You still may be able to get a contribution. Here are indicators to look for:

• Does the company have an affirmative action program, or special programs to hire the disabled, or promote employment equity?
• Have they sponsored events in the community that relate to your issues?
• Have they received awards for being a responsible company?

Charities and business have different views of what motivates giving

Nonprofit groups often have a jaundiced view of business givers. Grassroots organizations can be suspicious of companies, even hostile. One study of arts groups provides interesting data on this phenomenon. Arts groups may not be typical of all nonprofits, but their attitude probably is.

“Arts groups believe businesses support the arts largely to benefit their own companies, though most business executives say this is not so they support the arts mainly to benefit society.” These conflicting views were revealed in a study by the Council for Business and the Arts in Canada by the Angus Reid Group Inc, September 1992.

Arts Organizations' Perceptions of Business Reasons for Supporting the Arts

Companies' Reasons for Supporting the Arts

The true nature of many companies' attitudes to nonprofit giving is perhaps summed up in this extract from an interview with a key executive at Xerox:

Corporate gifts to charity
make cents, executives say

Corporate philanthropy doesn't just make you feel good, it's good business… Harry Cogill, director of public affairs for Xerox Canada Ltd, said businesses should establish themselves as good corporate citizens to avoid possible negative reaction from interested parties.

“Successful businesses today know that they don't report just to shareholders”, Cogill said. “They realize that they're accountable to a range of stakeholders — including employees, suppliers, customers and the public at large.”

But Cogill said firms that establish a good reputation also reap tangible financial rewards.

“In the short term, you earn the respect and loyalty of the community — many of whom are customers or potential customers.” Cogill said. “And when you consider today, more than ever before, people base their business decisions on ethical concerns, your identity as a caring, involved, moral entity is no small advantage.”

— Bob Papoe
The Toronto Star, 23 May 1991

Who Knows Whom: Discovering Your Contacts

Do you have any personal links to the company? Trying to use influence to get a grant is not always essential, and can even backfire. More often it helps. If no official grant program exists, it may become essential to know people at the top.

Remember, people give to people. Companies don't give money, people in the company do. You may have to mine your contacts.

Many groups assume that they have no contacts in the major leagues, and give up too soon. Don't underestimate the importance of `minor league' contacts. Don't be surprised if people in your group have contacts (perhaps a little distant) that you never suspected.

Feeling unconnected is especially common among people in small communities far from the corporate headquarters, and in groups of disabled or institutionalized people, and self-help organizations. They are too often cut off from circles of power by societal barriers.

Years of experience have shown that most groups do have (or can develop) wider networks than they at first believe. A technique has been developed and used many times to help people discover connections people have forgotten they had. Careful probing among the board, membership, friends and family may reveal surprising webs of contacts.

This process works best if each individual is asked privately at first, since people may not want to reveal connections publicly. Afterwards, a group brainstorming session may help people think of forgotten links.

Reassure everyone that they need not necessarily make the approach personally (although that might be better). Their name need not even be mentioned to the prospective donor, if they prefer.

Ask if they have any contacts in specific companies you name, no matter how remote, or how high or low on the corporate ladder.

It is best to focus attention on a few areas by asking your team who they know in a specific category, such as banking (almost everyone has a bank account), petroleum products (most Canadians own cars), lawyers, teachers, the fast food industry, etc. Jog minds by asking people to think back through places they have met people: in school; at conferences or on vacation; other parents in the same day-care centre, and so on. Don't forget relatives and neighbours.

For more information on running a Webbing Session, see the resource directory for details. Ask for a free copy of Face to Face from the Voluntary Action Program.

Are any of the company's employees involved as volunteers with your group? Do you serve any as clients? Companies are more likely to support organizations in which employees have shown interest. Many companies have specific policies that they will provide support on this basis. To name just a few, this includes:

• Amoco Canada Petroleum Company Ltd
• Canadian Oxygen Ltd
• Canadian Pacific Ltd
• Gulf Canada Resources Limited
• Hewlett-Packard (Canada) Ltd
• National Bank of Canada
• Nestlé Canada Inc
• Suncor Inc

Like many companies, The Investors Group Inc, based in Winnipeg, has a matching gift program. In their case, it is open to “all full-time and permanent part-time employees, sales representative and retirees… The Corporation will match gifts made by employees and directors on a dollar-for-dollar basis up to a maximum of $500 per year per employee/director. The minimum amount applicable, $50… Where an employee's involvement in the organization in question is in a leadership role, the Corporation may consider increasing the maximum amount to $1,000.” They will also provide grants of up to $2,000 to any organization where the employee or a member of their immediate family has volunteered for at least six months. If three or more employees volunteer with the group, the amount of the grant can increase to $3,500.

Health and social service agencies must be careful not to violate any rules of confidentiality by revealing to the company the names of their employees who the group helped — but it is acceptable to say that you have done so in a general way.

Does anyone in a company have personal reasons to be concerned with your issues? These facts may not be widely known, but may reveal potential supporters.

A member of the Eaton family, for example, had a hearing loss, and as a result John Craig Eaton has been an active volunteer and chair of the board of the Canadian Hearing Society.

The Four Seasons Hotel chain has a well established giving program. But in addition, the founding president of Four Seasons, Issy Sharp, lost a son to cancer, and has made many personal donations to organizations fighting cancer (see Toronto Life, May 1986, p 25, for an interesting profile).

Do you have contacts with any of a company's major suppliers or customers? They might exercise influence on your behalf. This can be particularly effective if the company does not have a well organized giving policy. A senior executive at a world-famous company once pointed out that, since McDonald's was his company's largest customer, he made donations to any charity promoted by McDonald's management before he considered other applications.

If you currently have supporters in the private sector (whether business, foundation or prominent individual), ask if they will take an active role in helping you find more donations. They may well have contacts with other funders. They may share information with you, or actually make calls on your behalf.

People willing to take on this role will be most helpful if they act as a `broker' for you. Sending a request on their letterhead is good. It is better still if they will phone or visit their contact.

If after all this you still feel totally without existing workable contacts, you may still be able to develop connections. Call on people sympathetic to your cause who might make connections for you, such as a journalist, a local politician, a doctor or a lawyer. Also contact faculty at the local college, and fundraisers (staff or volunteers) for a local charity or service club. Call and ask for an opportunity to explain your case, and ask for their help in brainstorming potential supporters.

Could outsiders take over the power in your group?

Consumer-controlled self-help groups are often cautious about giving outside supporters too much power. You must develop a careful balance between self-reliance and appropriate affiliation with people who can wield influence on your behalf.

You can have the best of both worlds. One effective technique is establishing a special task force such as an Honourary Board, a Committee of Friends or even a legally separate foundation.

This allows people to assist in fundraising and other important tasks. The actual power to control the organization can remain completely separate. The special group reports to the board of directors and is responsible to them.

Will this take too long? It may take several years to fully build an effective Honorary Board that includes the people you want most. Each year, new appointees can introduce you into more influential circles, climbing the ladder one rung at a time. In the interim, it can still be a very effective tool.

The social problems faced by grassroots groups and disabled persons today are likely to remain an issue into the distant future. Current members, staff and boards may all move on to other concerns while the organization survives to serve new generations. Beginning now to develop circles of contacts will have an immediate impact on income. At the same time, you will build the foundations for the future.

Making the approach
Know your mission

Summarize your mission in two sentences. If you can't, spend a day with your board trying to refine it. You may need outside help on this, whether a professional fundraiser who has helped others develop mission statements, a talented writer, or just a good facilitator who can listen with fresh attention and provide feed-back.

A mission is not how you do what you do, but why. What is your purpose? What will the outcome be?

A corporation evaluating a proposal looks at three things:

1)What is the organization trying to do?

2)How is the organization structured? Who is on the board, or acting as an advisor?

3)What is the specific request?

The introductory letter

An introductory letter should be on the top of any proposal. It should be clear and concise in one page. This is difficult, but important. A good business writing course may help you pare out the non-essentials.

Summarize your key points here and make it exciting. Busy grants officers seldom have time to read the whole application before deciding to reject it or keep it for further consideration.

In one page, the letter should show:

[] purpose
[] need
[] successes
[] results expected from the project
[] what you are requesting
[] how you will follow up

It is a little like writing a poem. You get the important things said, indicate that there is more to say, and make people eager to read more.

Jim Rennie of Gulf Canada Resources Limited put it this way: “Donation requests don't need to be glossy packages, but they do need to be complete and professional. Any size group can put together a good request — cover letter, info on group, why money is requested, others sources of funding, financial statements or budgets, etc. This material is essential if a group wants to be seriously considered for funding.”

There has been a trend lately to using one individual's personal story as an example to get attention and sympathy. That has been so overworked in corporate fundraising that it often turns off donation officers (although it still works well in mass market appeals like direct mail).

An example of a particularly awful request letter appears on the next page. The name and home town of the organization have been obliterated to protect the guilty. The marginal comments show the reaction of the corporate donation officer who received it. Needless to say, their application was turned down.

Actual example from a corporate donation officer's file:

October, 1985.

Public Relations/Charitable Donations Committee

Dear Sir/Madam:

Re: Foundation Donation

This letter is being sent to you because you get money out of XXXXXXXX. We a now asking you to give some back.

The XXXXXXXX, (a registered charity - - all donations are fully tax deductible) was set up about a year ago to raise money, invest it, and pay the income to the XXXXXXXX Public Library. The Library presently gets most of its money from provincial and Municipal grants, which are inadequate for the Library s expansion and development.

Local support of the Foundation has been good - over $5,000 since our Inaugral Meeting in March 1985. However, since our goal is $670,000 in ten years, we know we must broaden our support-base by calling on the Corporate community. Our contacts include not only suppliers such as yourself, but also Corporations such as Bell Canada, which do business with our community every day.

We intend to publish the names of all Corporate donors (unless, of course, you wish to remain anonymous). Our apologies for the "form-letter" nature of this communication. We are trying to keep costs down. Except for postage and paper, all other expenses (of office space, office equipment, secretarial time, etc.) have been donated. We will happily provide you with more information if you wish.

Please repay to XXXXXXXX some of the money which you have received. It is a worthwhile cause, and will be much appreciated.

Yours truly,

XXXXXXX
Trustee

The Meeting

Try to arrange a meeting with the donations officer to present your proposal. This is not always possible, of course, either because it is too far for you to travel, or because the donations officer doesn't see anyone.

If you can arrange a meeting, make sure a board member of your organization is there, and takes a lead role. A staff member alone, even an executive director, is not sufficient. A few donation officers refuse to give to organizations that don't bring a board member, because they believe the board should take an active interest in fundraising. If a board member can't be mobilized for 15 minutes to meet a potential funder, they believe the organization is in deep trouble.

Bring an information package that provides further details about your project and the organization. This can be left behind if the donations officer wants to give your proposal more serious consideration.

Try to sell your specific request, not the concept of giving money away in general. Don't spend all your time talking; listen actively, too. Discuss the project with the donations officer. Ask for feedback and suggestions. If the donor becomes involved, you are more likely to get a larger gift.

Make specific plans to follow up on your visit. Don't just say “We hope to hear from you.” Say: “We'll call you the week of such and such, if that fits with your schedule.”

The Proposal

What goes into a good written proposal?

A clear problem statement. What is the societal problem this grant will help solve? Provide statistics and human interest stories that document the value of your project. Provide a needs assessment. Quantify, justify and prove.

A workable solution. Show that you can fix the problem.

• What are your objectives?
• What population group will benefit?
• What methods will you use?
• Will the project have impact beyond the immediate results? If the method you are testing is of interest to groups in other areas, it increases the importance.
• How will the outcome be measured and evaluated? Evaluation procedures are increasingly important to potential funders.

Proof that you have an able team. Show that you have the right people to implement this expensive undertaking.

• What are the qualifications of the team members? List relevant degrees, jobs and life experience.
• Will the reputation of the board members impress the donor? Give their names and short biographical notes.
• Do you have endorsements? These should come from the people you are helping, first and foremost. Professionals with impressive credentials who can attest to the value of your work are next. Support from other organizations that refer people to you are good. Endorsement by a respect ed business leader, especially one who has given your group money, helps a lot. Letters from politicians are probably the least useful; they seem to send them to anybody. Extract the best quotes onto a single page instead of copying a stack of separate letters.
• Press clippings on your group, or on the issue are also useful in an info kit. They give a certain third-party credibility.

An affordable budget.

• How much is required overall?
• How much do you expect this funder to give?
• What exactly will this donation do?
• What is your overall financial situation, including revenue sources and expenses. Include an audited statement.
• Who else are you approaching for donations?
• Is this a one-time request, or will you require additional funding in future?
• How will the project be funded in future?

A connection to the funder. Show that you understand this funder's unique interests.

Rejection letters

Follow up on rejection. When companies reply, “Our funds are committed for this year”, they are often open to an application next year. Check it out and follow up.

Most companies are so flooded with requests they do not respond at all to those whom they will not help. Many have a policy of automatically discarding (without reply) any form letters that are addressed “Dear Friend”.

If the company writes back to tell you that available funds are allocated for this year, please check back with them. Ask when to re-apply. Their letter may be a polite way of saying `no'. It might also be a genuine expression of regret that the funds are committed. If the latter is the case, it would be a shame not to re-apply at the right time.

If you receive a rejection that is worded in a friendly manner, you may wish to contact the donations officer and ask for any suggestions he or she might be able to offer. Ask if there is a better way to approach that company. Ask if there are other companies that might be more appropriate.

Drop a short note to any company that has rejected you, thanking them for the time it took to consider your proposal. In the future you may want to re-apply. Begin cultivating a good relationship with them early.

Keep a record of all those who turn you down and those who give. Note what you asked for and how you asked. Careful analysis may reveal patterns that can help you improve your batting average.

Sponsorships and cause-related marketing

Sponsorships are hotly debated in both the corporate sector and the nonprofit sector.

`Sponsorship' has a precise meaning: it is a commercial relationship in which both the company and the nonprofit benefit. McDonald's, gas stations, American Express, McCain Foods, and many other companies have tried these.

There are various other techniques that do not provide a direct return to the company, but enhance its image by publicly supporting a charity. That is called cause-related marketing. Here are examples of cause-related marketing:

• A corporation acts as host of a particular special event for you, paying part or all costs.
• A company adapts the idea of being “Official Sponsor of The Olympic Games” to being “Official Sponsor of _________ ”. One internationally known courier agreed to provide thousands of dollars worth of free deliveries for a charity's Rolls Royce raffle and earned the title “Official Courier of the Juvenile Diabetes Foundation”.
• Sketchley's Cleaners offered to clean and repair any used coats customers would donate to charity, and collected thousands of “Coats for Kids.” They also got good publicity and new customers. Other cleaners felt left out.
• On a simpler level, an airline will give free tickets to be raffled off, if it feels they will get enough publicity among potential travellers.

Nonprofit groups benefit from the substantial amount of money available, and increased public awareness thanks to the corporation's capability for marketing. This can also give you leverage with other funding bodies. Finally, it means a more involved relationship with the funder than a routine exchange of proposal and cheque. It opens the door to better relations.

For the corporation, the best thing is that the publicity provides an extra reason to give to the community. Many corporations have to grapple with the question of why they spend any of their profits on donations at all. Levi Strauss & Co (Canada) has given to charities since it was founded in the 1800s, and many people still ask why. There may be sound philosophical arguments about good corporate citizenship, but in hard economic times, sponsorship is more methodical and measurable.

Against sponsorship are concerns about the effect on traditional corporate giving. First, it may leave out the small nonprofits, those that are low-profile, and groups involved in controversial causes. Many of these groups are on the cutting edge of new social issues. If they are left out, society could suffer. Arts and sports groups are doing very well, but most nonprofits aren't as well positioned.

Caution also has to be exercised to ensure the group supports the corporation. Do you use their products? Would public disclosure of a link between your group and the corporation cause embarrassment for either side?

• An international courier company about to provide thousands of dollars to a charity changed its mind at the last minute. The charity sent urgently needed documents — via the courier's chief rival.
• A coffee company was planning to support an arts group, until an executive touring the facility noticed the receptionist drinking from a mug with a competitor's logo on it.
• One centre for teenage mothers, was desperate for start-up money in its early years. Nestlé offered them full funding for five years. At the time Nestlé was being boycotted by groups for the way it promoted infant feeding formulas in Third World markets. The charity had a tough choice, and ultimately decided to turn down the funding.

Sponsorship can also cause confusion: Is the money coming out of a contributions budget or a marketing budget? If it is coming out of marketing that may change how the success of a donations program will be measured in the long term.

It can also lead to questions from the public over the purpose of the relationship. People have wondered if Ronald McDonald House is part of McDonald's Restaurants or a separate charity. In fact, it is separate, and most of the money has come from other sources. The House has had difficulties lining up other sponsors.

Ultimately, a company that has its identity wrapped up in a specific nonprofit group may even want to assume more control to protect its good name and its investment if the group becomes involved in a controversy.

There may even be a public backlash if they feel that a charity is being exploited, or that a corporation is spending more publicizing its gift than on the gift itself.

If you decide to go ahead despite the problems, be very clear about your expectations of what you will receive. You are selling an opportunity to the corporations to provide visibility and enhance their image. A different corporate department may make the decision, and a different approach may be needed.

Be sure you know all the strings that are attached. Are there restrictions on what other nonprofit groups and corporations can be brought in as partners? Do you have a signed contract? What are the provisions for your right to approve how your organization's name is used by the company? How will problems be resolved?

Know what your price is. What do other groups charge for similar marketing opportunities? How little will you accept? What are the opportunity costs (if any) of associating yourself with this particular company, in terms of lost chances to work with other companies and lost donations from angry consumers?

Biggest sponsors

Source: Idpar

Where sponsorship dollars were spent

Source: Idpar