Operational Parameter: Giving Vehicle
Selecting your giving vehicle is the philanthropic equivalent to entering a ‘make/buy’ analysis or outsourcing decision in business. Understanding the staff-time you can devote to philanthropy is integral to selecting your giving vehicle pathway because managing corporate gifts can be a significant draw on employee resources. If your available staff time for engagement is low relative to the size of your giving budget, you should consider partner-driven vehicles that rely heavily on external organisations. If you have the resources for high levels of engagement relative to your budget, you are well placed to drive the process internally if you choose to do so.
Pathway A: Partner-Driven Giving
Inviting partners to heavily support your giving is common and is how many organisations gain their footing in corporate philanthropy. In this low-engagement pathway, success relies on effective communication and healthy relationships with your partners.
Options for partner-led giving vehicles include:
Intermediaries: Intermediaries supply expert advice on issue areas or identify organisations that can deploy your financial gifts. They can conduct due diligence on your behalf, and in some cases, they can pool your funds with other donors for larger contributions. Increasingly, intermediaries design turnkey corporate giving programmes to meet your aims; tailoring everything from grantee selection to employee engagement. To engage intermediaries, you simply extend a grant to the intermediary, who then redistributes it to selected organisations. Intermediaries are particularly helpful if you are looking to make gifts internationally or in markets where you may have limited understanding of the landscape.
Advised Funding: Advised funding is a helpful mechanism if you pre-determined the organisation or issue area you would like to make a gift to but want to retain some control over when or how those funds are used. This vehicle allows you to make a gift to a host organisation, usually a large charity or community organisation, which then holds the funds until you make a recommendation on how and when to distribute it. Those funds can be used by the host organisation or be granted to other organisations. This vehicle allows you to make the gift when funds are available and actually employ them when you are comfortable with the plan of action.
Sponsorship: Sponsorship is a direct gift generally made at the request of the recipient. It is one of the most basic giving vehicles. Financial and goods-in-kind sponsorships require limited engagement, however, sponsorships that include the transfer of skills, professional services, intellectual property, etc, can be more involved.
Mission Related Investments: Mission related investments (“MRIs”), while not traditionally recognised as corporate philanthropy, are a low-engagement mechanism that allow your organisation to invest in areas that are socially important to it. With MRIs, you can divert funds from traditional investments towards those that are working on the issues you care about. Examples include investing in firms fighting climate change, technology developers that are improving education in rural schools, health innovators that are designing new technology to combat neglected diseases, etc.
Pathway B: Organisation Driven giving Vehicles
With more staff time for engagement, it may be possible to adopt giving vehicles that allow your organisation to drive the philanthropic process. While labour intensive, organisation-driven vehicles offer more control over the giving process and greater contact with beneficiaries as compared to partner-driven models. In this high engagement pathway, organisation-wide commitment and clarity around future cash flow is critical to success.
Options for high engagement giving vehicles include:
Programme Management: Managing your own programming, while labour and resource intensive, offers the greatest amount of control over your corporate giving. Programme management provides broad interaction with the community, but also increased responsibility for quality execution and exposure to risk should issues arise.
Grant-Making: Grant-making can provide excellent control over where and how your funds are utilised, without the burden of designing or delivering programmes. However, make no mistake, executing a successful grant programme is a labour-intensive process that relies heavily on extensive due diligence, grantee support, and a good understanding of community organisations, and working with partners.
Giving Circles: Giving circles allow multiple organisations or individuals to come together and pool resources towards a common goal. Like grant-making, giving circles are highly engaged to carefully select and support their recipients.
Venture Philanthropy: Venture philanthropy allows you to invest in and support an idea or an organisation working for a social purpose. Venture philanthropy invests for impact and not necessarily for profit, but like traditional investing, it requires a tailored financial approach, significant non-financial support, and close monitoring.