Corporate Donors Want Their Gifts to Help the Bottom Line Says Article in Stanford Social Innovation Review.

STANFORD, Calif. -- It is part of a broad, historic shift in the nature of corporate philanthropy. It goes by a variety of names -- strategic philanthropy, cause marketing, values-led marketing, or just plain corporate citizenship -- but what is happening here is clear: In an attempt to become more strategic in their philanthropy, corporate donors are tying their gifts more closely to their company's business objectives, according to a special investigative article in the Summer 2005 issue of the Stanford Social Innovation Review (www.ssireview.com).

"Where ten years ago, a corporation might fund just about anything the office felt was a good cause, now they tie the giving directly to the bottom line," observes John Harvey, executive director of Grantmakers Without Borders in the article.

Not surprisingly, this broad change in corporate giving patterns is starting to ring alarm bells throughout the nonprofit world according to the article. Cause marketing, one variation of corporate philanthropy, has been growing at the cost of traditional philanthropy, where corporations give based upon community need. "Companies are giving money for sexy cause marketing on the issues of the day, and to that end are very savvy about publicity," says Steven A. Rochlin, director of research and policy development at Boston College's Center for Corporate Citizenship. "Meanwhile, they are leaving out groups that are doing critical work but are not grabbing the headlines."

For decades, the first stop for anyone in southern Arizona who wanted to raise funds for almost any good cause was the Hughes missile factory in Tucson. Since its founding by billionaire Howard Hughes, the place had always been associated with big money -- both profits and a sweeping civic generosity. The company funded everything from the local symphony to the children's museum, from the preservation of tribal lands to disaster relief. Today, the weapons complex is part of Raytheon, the defense contractor, and is focused only on math and science education. Its reasoning was simple: Most people who work for Raytheon in the future will need math and science skills.

"Even people in corporations whom we know well and are devoted to the orchestra are telling us quite honestly, 'I have to listen to my marketing director,'" laments Susan Franano, executive director of the Tucson Symphony Orchestra, which formerly benefited from Raytheon's largesse. "Nowadays if you don't -- or can't -- offer concrete ways for businesses to connect with your audience or your cause, your chances of funding from corporations are probably not really very good anymore."

"It's like it's got to be Mom or apple pie -- cancer research, the homeless, or food for the hungry," complains David A. Nuttle, president of Needful Provision Inc., a small nonprofit in northeastern Oklahoma engaged in a variety of local projects such as supporting Laotian refugees. "We're trying to do niche areas, but it's tough. Smaller causes like ours just can't get that corporate support. I sometimes worry the steamroller will just run over us."

Blending philanthropy with core business strategies reinforces business relationships, enhances sales, draws new customers, and engages employees, according to research cited in the article. What's a nonprofit to do? They must become more strategic. "You can't just be a worthy cause anymore," observes Howard Byck, Share Our Strength's chief director of creative enterprise and marketing. "You've got to be a really worthwhile cause -- and there have got to be some marketable assets."

More information on this and other articles is available online: www.ssireview.com.

The Stanford Social Innovation Review is published by the Center for Social Innovation at the Stanford Graduate School of Business. Building on the Business School's 34-year commitment to public and nonprofit management, the Center promotes solutions to social problems through a unique combination of interdisciplinary research and teaching that extends beyond the classroom. The Center dissolves traditional sector boundaries, bringing together nonprofit leaders, corporate executives, government officials, and philanthropists to discuss, debate, analyze, and take action to strengthen our communities.