Before Writing the Check
Before agreeing to support a nonprofit organization, Magnolia Hotels does its homework. The Denver-based company makes sure the partnership is a good fit – for both parties.
“When choosing to partner with an organization for philanthropic purposes, Magnolia Hotels considers the organization’s cause and need, as well as the mutual benefit that may be obtained,” said Dana Berry, public relations director for the Denver-based company.
Like Magnolia Hotels, America’s businesses and industry are giving organizations. Donations to America's largest charities grew by 4.3% in 2006, to $67.5-billion, according to The Chronicle of Philanthropy.
Money doesn’t change hands overnight. Think of it as a courtship. A dance, if you will.
Nonprofit organizations survive, partially because of support they receive from business and industry. While their needs typically are great, nonprofit organizations – before accepting support from potential donors – do their homework. They too want to make sure the match is a good fit and the donor eschews like values. No nonprofit organization wants to accept financial support – only to have it become front-page news.
Business and industry should do the same. They too must ensure that the match works. Before providing support:
• Ask about the nonprofit organization’s budget and spending. Well-run nonprofits won’t hesitate to discuss, for example, how much of their budget is spent on salaries and benefits. They also won’t hesitate to explain why. Look for nonprofits that are frugal and effective, but not overly conservative with their spending. Be careful not to jump to conclusions. An organization with a budget high in administrative costs might mean it must employ more people to provide its services.
• Ask about the company you would be keeping. It’s acceptable to ask about their more generous donors. You may not want to share space on a list of donors with a company with a philosophy that differs greatly from yours. You also may not want to share space with your biggest competitor. But then, again, you may want to share that space. You can’t expect exclusivity, but you may want to know where you stand.
• Ask how many people the organization touches each year. Find out who these people are and why they need help. Find out how they receive support. Go beyond the organization’s mission. Ask about its vision. Some nonprofit organizations touch many people, but with little depth. Others touch fewer people, but make a large impact in their lives. Neither approach is better than the other. Simply decide what approach is more important.
• Ask whether the nonprofit organization has an endowment. Most nonprofits look at endowments as safety nets should they have lean years in fund-raising or face unexpected expenses. Some will supplement their annual operating budgets with the revenue generated by their endowments. Don’t necessarily view a nonprofit organization with an endowment as an organization that doesn’t need your support. Instead, view it as an organization that has been successful with its development program. Success breeds more success, which means more people will be helped. However, a nonprofit with an overly large endowment may be hoarding its resources. One rule of thumb is a nonprofit organization is wise to have at least several times its annual budget in an endowment as a precaution.
• Don’t be afraid to ask a nonprofit organization that wants your support about how it recognizes its donors. More than likely you won’t have to ask, but don’t hesitate to inquire if the subject doesn’t come up. And don’t feel guilty about asking. Determine before asking whether you want recognition or would rather remain anonymous. If the latter, make sure your intentions are understood. Nonprofits likely will include your company’s name in its annual report with its other donors, and many have donor walls or other places where they recognize their most generous supporters. Companies and businesses have many reasons for providing support – and recognition is one of them.
Magnolia Hotels looks to leverage its support for the good of both organizations, Berry said. “We love to develop creative packages involving overnight stays at the hotels that may be of interest to the news media and for press coverage, as press coverage helps to increase awareness of both the organization and Magnolia Hotels.”
A visit to GuideStar.org on the Internet also can prove helpful for business and companies looking for a nonprofit match. GuideStar gathers and publicizes financial information about nonprofit organizations.
According to its website, GuideStar includes 1.7 million organizations in its database. Among the information available, some of which is accessed by paying a fee, are the 990 forms organizations must file with the IRS. These forms provide information about the organization’s mission, programs and finances.
This article was written by Kevin Warneke, executive director of Ronald McDonald House Charities in Omaha. It is currently featured PR News 2008 Guide to Best Practices in Corporate Social Responsibility. To order a copy, visit http://www.prnewsonline.com/store/9.html.
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