Proactive Giving: A First Step Toward Shaping Your Impact

The guide describes the difference between two basic strategic approaches to corporate gifts: reactive and proactive giving.

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Strategy Stakeholder Management

This Practical Giving Guide offers an introduction to corporate giving. The guide describes the difference between two basic strategic approaches to corporate gifts: reactive; and proactive giving. It also outlines two tactical approaches for committing these gifts: grantmaking and programme management.

Key takeaways

  • Reactive giving is driven by the supply of proposals for funding.
  • Proactive giving is driven by a corporate giver’s demand for proposals. In effect, it allows the corporate giver to shape the impact it would like to have.
  • Two critical factors for successfully executing a proactive giving approach include: 1) having access to a robust network of community-based organisations and 2) allowing community organisations to contribute towards shaping proposed solutions.
  • Reactive giving lends itself to the grant-making tactical approach, while proactive giving offers a wider array of tactical approaches including programme management.

Introduction

Steady growth in the non-profit sector[i] coupled with progressively collaborative approaches to global development[ii] characterise corporate philanthropy today. Now more than ever, firms field a barrage of sponsorship requests from the expanding population of community organisations, schools, sports clubs, and even professional fundraisers. These requests may be for financial resources, or perhaps volunteer time or even in-kind donations, all of which can underwrite any number of worthwhile events, programmes, or causes. 

When managing corporate giving for your organisation, you receive each request and initially reference your firm’s predetermined giving objectives for a quick eligibility test (a Practical Giving Guide for identifying your focus in giving is also available). You then carefully consider the merits of the request, sometimes within the context of defined parameters, and sometimes, there are no parameters or requirements to meet, before deciding to cut a check against your annual budget. This cycle repeats itself at varying pace throughout the year, generally peaking around the end of the calendar year. 

Likely, your year-end budget does not draw down neatly to zero and you find yourself in one of two troubling scenarios. You either spend the last few weeks of the fiscal year struggling to find worthy outlets for the remaining funds or run out of budget early and must decline the inevitable end-of-year requests.

Regardless of how the fiscal year ends, this timeless approach is known as reactive giving.  Its key characteristic is the reliance on unsolicited or generic proposals for corporate gifts.  Reactive giving is driven by the supply of proposals from community organisations to your firm, rather than your demand for them

It is not to say that the reactive giving approach is inherently flawed. In fact, this approach is a testament to the generosity of the region and suits the needs of many firms, including the community organisations it supports. This kind of giving can be impactful, particularly in emergency situations, and it certainly is not going anywhere soon.

Since the reactive giving approach in the region is well practiced and needs no additional tactical strategies to operate, we will turn our focus to the other end of the spectrum, proactive giving. 

Fundamentals

Opposite on the spectrum of strategic approaches resides proactive giving.  While both the reactive and proactive approaches begin with establishing a set of objectives corporate giving is meant to achieve, that is where the similarities endUnlike the reactive approach that passively relies on unsolicited proposals to meet those objectives, proactive giving establishes a means of soliciting proposals to do so. Proactive giving is demand driven, meaning funding organisations initiate outreach for proposals that will help meet their objectives. It allows the corporate giver to shape the impact it would like to have.  Quite simply, proactive givers do not wait for the fundraisers to call. 

When communicating your giving objectives and soliciting proposals from community organisations, it is advantageous to consider that community-based organisations (CBOs) often do have a deeper understanding of the issues that corporate givers may be working to impact.  It is helpful to keep requests for proposals (RFPs) flexible enough to allow responding organisations the freedom to help shape the solutions being sourced. This provides an opportunity for firms to benefit from the deep knowledge and experience often harboured by CBOs.

Figure 1: A simplified spectrum of strategic approaches for corporate giving
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The key difference between the Reactive and Proactive strategic approaches to corporate giving is the nature through which each receives proposals.

The primary critical success factor in executing this giving approach is having access to a network of qualified CBOs who will understand your giving objectives and respond to the call for proposals.  Strong outreach is key to generating a robust pipeline of relevant, eligible recipients for corporate gifts. 

Figure 2: Illustrative Proactive Giving Cycle
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Proactive Giving is driven by a clear understanding of giving objectives that enables an organisation to actively seek proposals from prospective recipients instead of being solicited by them.

Once the decision is made to follow the proactive approach, a host of opportunities become available with respect to ‘how’ an organisation can give (a more detailed Practical Giving Guide is also available on the topic of giving vehicles).  A simplified roadmap includes two major tactical approaches to giving, including 1) grant making and 2) programme management.

Figure 3: Simplified roadmap of tactical approaches to giving
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Proactive Giving avails of a wider array of tactical approaches through which to commit corporate gifts.

Grant making as a tool is available to both reactive and proactive givers and can be a powerful method of delivering significant gifts into the stewardship of capable CBOs.  It is a flexible approach that allows donors to give towards several causes or organisations without significant increases to internal capacities or headcount.  Grant making is most effective when an organisation has access to a high-quality network of organisations to receive the grants. 

Programme management is more readily available to proactive givers as it requires the organisation to define and deliver programmes in line with its giving objectives. These can include basic programmes, such as food drives and scholarship programmes to more complex long-term endeavours. Due to capacity constraints or comparative advantages held by CBOs, often times corporate givers must identify and work closely with a set of delivery partners to successfully undertake the programme management tactical approach.