Giving Strategy: A Practical Approach to Setting Giving Objectives

Introducing a simple approach to determining basic corporate philanthropy objectives.

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Strategy

This Practical Giving Guide introduces a simple approach to determining basic corporate philanthropy objectives. Additional guides are available on related topics including establishing giving operations, defining a theory of change, classes of giving projects, and collaborative giving.

Key takeaways

  • An organisation can narrow down the vast options available to it by drawing inspiration amongst sources from inside and outside of the firm.
  • CSR and corporate philanthropy are not the same in concept nor execution.
  • Internal and external factors that can influence defining a firm’s giving objectives. Internal factors include the firm itself and the employees, and external factors include the customer base and the community.
  • External factors including customers and community, can bear heavily on identifying giving focus, but are not as influential in determining the form of gifts that can be offered.

Introduction

A simplified giving strategy typically has two key elements and defines the what, who, where, and how of your philanthropy. The first element:

(i) Your giving objectives, defines what you plan to give and to whom. This can then be supplemented by a theory of change if one is relevant to your giving.

The second element:

(ii) Your operations, defines where your giving will be conducted and the mode you use to make those gifts. This guide will focus on the former, your giving objectives.

Figure 1: Simplified Giving Strategy
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The possibilities are virtually unlimited with respect to defining giving objectives. Setting your focus on specific issue areas, geographies, institutions, or even populations presents a wide range of options. With respect to the form your gift will take, a holistic view of the firm’s assets reveals that expertise, time, and tangible assets may also be in abundance, and that your corporate philanthropy can include more than financial gifts.

While the final choice of what to give and to whom rests with your decisionmakers, your organisation can narrow down the vast options by drawing inspiration from amongst sources inside and around the firm. Factors that can influence defining a firm’s giving objectives include:

  • Internal factors: the firm itself and the employees
  • External factors: the customer base and the community

Fundamentals

A critical early step in setting a giving strategy is to determine the two parameters that define the giving objectives element:

  • The first parameter, the beneficiaries or the giving focus, establishes the ‘end user’ of philanthropy;
  • The second parameter, the form of gift offered, establishes the resource transferred through giving.

To set each parameter, a firm can seek guidance from a set of internal and external sources of influence. Internal factors such as a firm’s unique characteristics and its employees, can be influential in identifying both focus and the form of gifts. External factors including customers and community, can bear heavily on defining focus, but are not as helpful in determining the types of gifts that can be transferred.

Figure 2: Sources of Influence on Defining Giving Objectives
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While these features of business can be influential, it is not mandatory that giving and business be completely aligned.

Parameter: Focus/Beneficiaries

Defining the focus or end user of corporate giving is essential in helping a firm ration its resources and signal its areas of interest to grant seekers. Having a defined focus or beneficiary makes corporate philanthropy feel more ‘concrete’ which then builds internal momentum and commitment. Seeking direction from the firm’s unique characteristics or from amongst employees, customers, and community can help to narrow the immense field of possibilities.

Figure 3: Sources of Influence on Defining a Giving Focus/Beneficiaries
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Factor 1: The Firm

Looking internally at a firm’s operations and attributes (its mission, vision, and values) can supply clues about what is of interest and importance to a firm and by extension, its giving.

Influencer:  Operations

Causes that are related to business operations is a natural place to anchor giving focus. While offsetting the effects of commercial operations is a responsibility, supporting related causes can be considered to be philanthropic. For example, food manufacturers might offset deforestation caused by mass-farming via their CSR strategy, but they could direct their philanthropy to nutrition-related social causes like food security and food banks. Similarly, courier services might offset their transport emissions via a CSR strategy involving carbon credits, but could direct its giving to support the development of electric vehicles and drone technology.

Influencer:  Attributes

A firm’s mission, vision, and values can also help steer the focus of corporate philanthropy. These attributes clarify what an organisation holds dear and paints a picture of what it hopes the future will bring, both of which can be strengthened by a giving strategy. For example, a healthcare firm likely values all human life and could find utility in supporting causes that drive social equality.  An automobile manufacturer may espouse a corporate vision for a world that no longer relies on fossil fuels. It could then drive its giving towards developing sources of renewable energy.

Factor 2: Employees

Directing corporate giving towards areas that are of interest, importance, or relatable to employees is a powerful way to drive firm-wide engagement in philanthropy and an effective means of bolstering retention.

Influencer:  Employee values

Individual philanthropy is on the rise. Employees are likely already giving to, fundraising for, and volunteering with the causes and organisations that are important to them. Offering donation matching programs or automatic payroll donations to employee-identified organisations are two simple ways that corporate philanthropy can take inspiration from employee values.

Influencer:  Employee demographics

If an organisation has a somewhat uniform workforce, for example an employee base dominated by women, scientists, working mothers, etc. it can consider giving to causes and organisations that reflect that particular demographic.

Factor 3: Customers

Particularly for B2C organisations that engage directly with consumers, focusing corporate giving in areas that are of interest, importance, or are relatable to the customer base is an effective means of bolstering brand awareness and consumer loyalty.

Influencer:  Customer values

Niche businesses may have an easier time of identifying what customers value, but it is still possible for organisations with a wider customer base to identify areas of interest. For example, many clients of bookstores are interested in spreading knowledge. But clients of large retail hypermarkets may have much more varied values. Donating a portion of sales or profits to a charity of their choice or offering a choice amongst a small pre-determined selection of organisations could be effective in aligning with customer values. 

Influencer:  Customer Demographic

If an organisation has a uniform customer base, for example a toy company focused on youth or a cosmetics company selling primarily to female customers, a firm can consider giving to causes and organisations reflecting that particular demographic.

Factor 4: Community

The private sector is an important pillar of the communities in which they operate. However, communities are diverse and seeking direction from it can seem to pull a firm in multiple directions. Regardless, making an effort to zero-in on shared areas of interest or learning of and filling community needs is an effective means of strengthening the public-private bond.

Influencer:  Community values

Communities are diverse in terms of what they value, but firms can actively direct their giving based on broad surveys to understand areas of common interest. In the age of social media and crowd sourcing, firms can easily learn about the issues a community cares about and the organisations they support.

Influencer:  Community needs

Community organisations are a reliable source of information and will happily shed light on needs that exist locally. Encouraging them to be candid and open about shortages or to self-identify resource gaps can help direct funding to areas that will be immediately impactful.

Giving Parameter: Form of Gift

While financial gifts are common, and for good reason, corporate giving can take many forms. An organisation has access to tangible and intangible non-financial assets that can create impact. A firm need only look internally, at its own lines of business and employees, to find guidance on the types of gifts it can make. Internal factors are more relevant in this area because external factors do not always have a clear or reasonable understanding of corporate resources.

Figure 3: Sources of Influence on Defining a Giving Focus/Beneficiaries
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Factor 1: The Firm

Looking internally at a firm’s operations and attributes (its mission, vision, and values) can supply clues about what is of interest and importance to a firm and by extension, its giving.

Influencer:  Operations

Causes that are related to business operations is a natural place to anchor giving focus. While offsetting the effects of commercial operations is a responsibility, supporting related causes can be considered to be philanthropic. For example, food manufacturers might offset deforestation caused by mass-farming via their CSR strategy, but they could direct their philanthropy to nutrition-related social causes like food security and food banks. Similarly, courier services might offset their transport emissions via a CSR strategy involving carbon credits, but could direct its giving to support the development of electric vehicles and drone technology.

Influence:  Non-core assets:

Giving away products and services produced by a firm is not the only way to utilise its non-financial resources for philanthropy. For example, firms rotate IT equipment or renovate office space every few years. Through these refresh processes, used laptops can be refurbished and offered to underserved students and furniture can be installed in youth centres. Transferring functional, in-demand physical assets is a wonderful way to carry out philanthropy and spare landfills at the same time. 

Factor 2: Employees

In today’s knowledge economy, employee skills and man-hours are arguably the most valuable assets of a firm. Pairing skilled employees that have an interest in volunteering, together with non-profits that constantly struggle to afford professional services, training, and staff, makes for impactful philanthropy. Providing employees an opportunity to work with non-profits has also been cited to strengthen retention and overall pride in their workplace.

Influence:  Skills and competencies

Non-profit organisations rely heavily on pro-bono services to support their operations. Legal support, translation, consulting services, data collection and other similar services are vital to their work but often outside of their budgets. Firms that offer these services as a core commercial business can gift them pro bono to non-profits. In addition, basic competencies such as fiscal management, data analytics and other competencies are also of value and can be offered as training or volunteer hours. There are several intermediaries such as the Global Pro Bono Network that can help pair service providers with non-profit organisations in need.

Influence: Volunteerism

Volunteerism can take many forms, from manual labour to serving on a board.

Younger employees often cite the availability of volunteer opportunities as a key requirement when selecting an employer. Aside from a volunteerism policy, a firm could support further volunteerism by matching volunteer hours with cash grants to the organisations where employees already or wish to dedicate their time.