Navigating An Economic Downturn

The Northern California Grantmakers recently held a conference devoted to helping companies responsibly navigate their giving strategies during an economic downturn.  None of the companies in attendance anticipated a decrease in their philanthropic budget for 2008 or 2009, yet all recognized their staffing and resources to execute programs would decrease.

I joined impressive speakers from Levi’s, IBM, Starbucks, Target and Cisco, companies who despite past recessions, have all maintained their commitments as leaders in giving back.  Below are some key best practices that were shared collectively:

  1. Build the business case to your senior executives for maintaining your philanthropic budgets as it is a key strategy for building reputation and strengthening relationships with diverse stakeholders. Levi’s and Bank of America stressed that they sought and educated select senior level champions to advocate on their foundation’s behalf. They also built a “spiderweb” of networks and relationships within the organization at all levels and divisions. 
  2. Focus your giving and resources on 1-2 issues. It allows you to have a greater impact on the issue and say “no” to the many organizations knocking on your door. Pacific Gas and Electric moved from five diverse issues to focusing on empowering its employees and customers to take action on the environment through programs such as its Solar Schools and Solar Habitat Program
  3. Give more than the 5 percent of your endowment, if you have one. This is the rainy day that you have been waiting for. Years back, Levi’s gave over 15 percent of its endowment to maintain its giving levels!
  4. Rely more heavily on the assets you have beyond cash, especially your employee volunteerism, if your budgets are stagnating or decreasing.  Gap significantly increased its volunteerism in the early 2000’s, while IBM focused on lending technical expertise and software.
  5. Reduce or suspend matching gifts. Some companies only matched if it was consistent with their giving focus area.
  6. Create turn-key programs with nonprofits that require minimal corporate staff time to manage.
  7. Hold your nonprofit partners accountable for measuring the social impact of your contribution. Market results back to your internal and external stakeholders.

Exit Strategies

There was also a lot of discussion around responsible exit strategies for nonprofit relationships. Key best practices include:

  1. Communicate new focus/revised funding at least six months in advance to give programs that might not be eligible for renewed funding the opportunity to find alternate funding sources.
  2. Communicate end of funding via letter. Provide copies to senior
    leadership to ensure they're on message.  Nonprofits will likely call CEO and others.
  3. Meet with any long-term partners in person. Determine ahead of the meeting if there is an opportunity for the nonprofit to evolve its program to meet the new giving direction. If not, be clear.
  4. Consider a gradual phase out of funding.
  5. Create a FAQ section on your corporate website where current/future grant applicants can view a checklist of criteria for funding eligibility.  This will lessen calls to staff.
  6. Ensure your criteria for employee matching gifts are changed to align with the company’s new focus area(s).
  7. Create a sunset calendar highlighting key activities/dates the company and nonprofit need to conclude the relationship (i.e., remove logos from websites, send final payments, etc.)

I left the conference encouraged – companies recognize that strategic giving is an imperative today and are not decreasing their levels of funding...YET.  Overall, it was clear that success depends on quality and measureable results, not just quantity of giving!


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