"But … we had a plan."
In the world of corporate giving, even the most experienced can find themselves stuck uttering these famous last words when a philanthropy initiative fizzles unexpectedly.
What’s the biggest reason?
Success in the nonprofit world requires agility, which could mean being flexible enough to revise — or ditch — a plan to meet the needs of the community.
Corporate philanthropy typically follows a strategic roadmap built upon high-level, neatly aligned-to-business objectives that often show little variance year in and year out. Favor is given to those who can best color inside the lines. Leaders are leery of loosening the reins, afraid to let those operating on the ground take some measure of control and make decisions as they see fit. There is a built-in risk-averse inflexibility.
An example of corporate philanthropy’s limits
The limitations inherent to most corporate philanthropy programs took center stage during the COVID-19 pandemic. One prime example is the regrettable development that took place when schools shuttered, and students began studying remotely. While supporting virtual learning was an obvious priority, many corporate programs dedicated to improving educational outcomes had difficulties making the pivot. Students, particularly those in underserved neighborhoods, fell behind, with many lacking laptops and even internet service. This failure to quickly respond to an immediate need exacerbated the achievement gap.
Nonprofits, on the other hand, are well known for their agility; in fact, they must be flexible to survive. Their success lies in maintaining a deep understanding of the changing needs of the communities they serve and reacting dynamically to produce the most ideal outcomes. And when they are staffed and managed by people from the communities they serve, the connections to their clients are even stronger.
And herein lies an important dynamic: Corporate philanthropy, nonprofits and the communities they support should have a symbiotic relationship to keep the flow of information moving and a similar ethos in their respond-to-need speed. At the core of this relationship is a bond of trust as well as a willingness to accept some risk in order to truly achieve the impacts we profess to want to support.
Strengthen bonds and actively listen
The strongest bonds are formed from a place of empathy, where listening and learning take priority over solving and fixing. To achieve meaningful change, it is important to engage people who have expertise in philanthropic priorities, and strong connections and lived experiences, in the communities served.
Granting managers need to build relationships and show up; by being visible and interacting with organizations, leaders and neighbors, they can authentically serve as eyes and ears in the community. They should be trusted equally by their nonprofit partners and corporate business partners who ultimately rely on their expertise. As such, they will be perfectly positioned to identify organizations with actionable ideas for the kind of program development, improvement and resource management that is most responsive to the needs of a community.
Eliminate red tape and rethink stringent rules
Another way corporate philanthropy might rethink flexibility and the symbiotic relationship with nonprofits and communities is in reassessing the stringent requirements around data reporting and other administrative tasks. While it is true that support is difficult to measure without metrics, there needs to be a balance.
For decades, rule-makers in corporate philanthropy have demanded to see reams of data to prove a return on investment; it’s not rare to see impact reports with 25 pages of data points. Of course, this can prove burdensome for nonprofits; crunching the numbers at a granular level requires funding and personnel, and this is exacerbated by every funder needing unique data to meet their particular needs.
Organizations spend significant time and money to meet the needs of funders to better understand the impacts of the dollars they invest rather than directing those resources into actually achieving those impacts. This drain on resources effectively reduces the impact of money donated to critical programs, which amounted to almost half a trillion dollars in 2020 alone. Those who implement such requirements often find their money didn’t go as far as it could have to help the community.
Another instance where corporate philanthropists need to be flexible is in the funding cycle. An organization might give out money at specific times of the year, but when those periods don’t coincide with nonprofits’ needs, it can represent another lost opportunity.
I'm hoping we see a trend where more in corporate philanthropy become willing to drop the status quo of exclusively funding mega-charities with large administrative operations that can easily meet their requirements. Instead, more time and effort should be put into building relationships with diverse-led, smaller and newer nonprofits, lowering their barriers to entry and supporting innovations to help them boost capacity.
Implementing ideas, such as standardizing and streamlining data collection and reporting among organizations working in a specific sector, could be adopted as a means to both reduce reporting burdens and encourage resource-sharing.
We're committed to serving our communities, so let's do everything we can to engage the ones best positioned to understand their needs. And let's continually ask ourselves the question: How can we do it better?
- Philanthropy Needs Innovation to Help With Social Problems
- How to Maximize Your Impact With Strategic Philanthropy Tools
- Six Charitable Giving Strategies: Feel Good and Cut Your Taxes
- How to Find Room for Philanthropy Despite Challenging Times
- Five Ways Companies Can Boost Charitable Giving by Employees
Shelley R. Sylva is the Head of Corporate Citizenship at TD Bank, where she also led the "TD Ready Commitment," a billion-dollar philanthropic initiative focused on social and environmental issues. Shelley is a 2021 Philadelphia Business Journal "Women of Distinction" honoree.
Capital Gains Tax Exclusion for Homeowners: What to Know
Tax Breaks The IRS capital gains home sale exclusion can be a valuable tax-saving tool if you’re eligible.
By Kelley R. Taylor Last updated
Kiplinger's Mutual Fund Guide For 2024
Giant U.S. tech stocks dominate many of the top-performing names in Kiplinger's mutual fund guide, but small and foreign companies are well represented too.
By Nellie S. Huang Published
The Three Basic Components of a Good Estate Plan
Getting your estate in order so everyone knows what you want when the time comes can save your loved ones confusion and stress.
By Jason “JB” Beckett Published
Is Your Financial Adviser Listening to You?
Survey finds financial advisers and their clients might need to break out the talking stick. Repetition and summarizing are key to ensure your points are heard.
By Suzanne Norman, CIMA®, CPCC Published
Did You Get a Cash Windfall? The Case for Doing Nothing
An inheritance or lottery win can be a stroke of good fortune, but if you mismanage your funds, you could end up worse off than before your windfall.
By Samuel V. Gaeta, CFP® Published
How to Use Your Estate Plan to Save Tax Now: A Timely Update
Consider an upstream basis trust and a general power of appointment for an older family member to reduce capital gains taxes on highly appreciated assets.
By John M. Goralka Published
Three Common Mutual Fund Misconceptions Debunked
Mutual funds let investors access a basket of securities rather than buying individual ones on their own, but there are some misconceptions about them.
By Brian Spinelli, CFP®, AIF® Published
529s: No Longer the Ho-Hum Investing Device for College
Changes to the plans allow for the savings to be rolled into a Roth IRA, as long as certain rules are met, if a child decides not to pursue their education.
By Neale Godfrey, Financial Literacy Expert Published
To Make the Case for Equities in the Long Term, Look to the Past
While cash yields are attractive now, if we look at the performance of equities in the past, we can expect that, going forward, they could be a better bet.
By David Blanchett, PhD, CFA, CFP® Published
Workplace Financial Coaching Has Become Ever More Important
Employees face growing challenges to their financial wellness today, so it’s more critical than ever that employers provide the help they need to navigate them.
By Greg Ward, CFP® Published