We’ve reached an era in which the purpose of Corporate Social Responsibility (CSR) programs extends far beyond the warm & fuzzy feelings of decades past.
Now more than ever, your organization’s CSR practices have the potential to:
- Boost employee engagement
- Enhance problem solving and creativity
- Improve employee retention
- Attract top prospects
- Deliver financial returns
But – and this is a big but – your approach to corporate giving must be built on more than just convenience and casual alignment.
In our experience, many of our clients have developed giving strategies that are based more on history and relationships than genuine alignment with an organization’s core mission and values.
We find that having a strategic approach to developing a corporate giving strategy not only reaps benefits within the company, but also creates stronger partnerships with the selecting nonprofits.
The Four Elements of Evaluating Nonprofit Organizations
We have found that there are four key elements to a strong corporate giving strategy:
- Purpose Alignment
- Stakeholder Impact
- Nonprofit Evaluation
- Key Benefits
By evaluating each potential charitable partnership on all four elements, you will be able to understand the subjective measures of emotional resonance of the cause and impact on populations in need as well as more objective measures of how the organization is run and the impact it will have on your organization’s reputation.
Purpose Alignment
Purpose Alignment standardizes the complex emotional aspects of the potential partnership that are central to an effective giving strategy. This is also what motivates and inspires key internal stakeholders. To better understand this alignment, we broke this measurement into four component parts: mission, vision, values, and potential cultural impact. Potential cultural impact was defined as the extent to which a partnership with this organization would unify the organization and its employees through a shared cause.
Stakeholder Impact
Stakeholder Impact defines the extent to which the nonprofit organization is serving our client’s target audience or community an effective, meaningful way. The two primary stakeholder groups were assigned 10 points each, whereas the secondary stakeholder groups were assigned 5 points each.
One client was looking to partner with an organization that empowers those they serve, rather than enabling them. It was critical that the client could establish an active partnership with the nonprofit to provide not just financial support, but volunteer skills, time, and effort to achieve deeper impact.
If your organization does not have specific stakeholder groups that need additional support, spend some time to determine which causes have general alignment with your industry, your organization, or your community.
A quick test for this is to ask someone with limited familiarity with your organization if a particular partnership makes sense.
Organization Evaluation
Now that we have measured subjective and objective alignment, we need to better understand the effectiveness of the nonprofit. In other words, are they following traditional nonprofit best practices for governance, financial health and organizational/program development?
Governance and financial health are pre-determined using Charity Navigator’s rubric – the star system. Organizational/program development is a measure of the nonprofit’s ability to meaningfully impact key audiences by looking at the knowledge and research that drives the nonprofit’s mission, evaluation process and ability to innovate and adapt to changing needs.
Key Benefits
This section measures the potential positive impact the partnership would have on our client’s reputation, brand and pursuit of their mission. While this isn’t the warm and fuzzy side of CSR, it is important to think about how these partnerships benefit or hurt a client.
Key benefits can be broken down into two categories: strategic and tactical. The strategic impact measures longer-term benefits to First Command’s reputation: brand elevation, differentiation and organizational alliances. The tactical benefits are a shorter-term measure, which looks at the nonprofit’s national recognition and the presence of marketing opportunities.
Defining Relative Importance
Just as people define importance differently, so do organizations. It is important to figure out which of the four elements is most important when creating your own rubric. Each element should have a defined weight that helps determine how much influence that category will have on your evaluations.
Think of these weights as percentage points: out of 100 points, how many points would you assign this specific category. Then, within each category, what is the most important – and deserves the highest number of points. We highly recommend having 15 being the lowest number of points assigned to a category.
Let’s walk through a few quick examples.
The Process
To most effectively use this rubric, each organization should be evaluated by each of decision-makers for your corporate giving strategy and an average score should be calculated.
Once all organizations are evaluated, the total score is designed to be the percent alignment of the organization, which is the percentage to which the nonprofit meets our predetermined criteria. This will provide you with an ability to rank the potential nonprofits on overall fit and drill down into the specific elements.
If you have a lot of organizations, one way to effectively show how the alignment of each nonprofit is by creating a dashboard. Here is an example of one of our dashboards:
The Analysis
This is where the analysis becomes somewhat gray: scores aren’t everything. While some nonprofits may have near perfect alignment with our criteria, there may also be other factors that influence the final decision.
For example, one nonprofit had a 95% alignment score, which was much higher than the other organizations analyzed. This nonprofit, however, had a strong national presence and longstanding relationships with many of our client’s key competitors. For that reason, we felt a nonprofit with slightly weaker alignment would be a better fit. This was true for our client, but we also believe it would be true for the nonprofit, since our client would have the opportunity to contribute directly to the organization’s success.
The Results
At the end of the day, our corporate giving strategic rubric is designed to narrow down the possible partners from 30 to five, reduce subjectivity in the evaluation process, and help facilitate a productive discussion between a cross-functional team with different goals. Additionally, it provides a framework to more effectively and efficiently leverage our client’s partnerships by creating a common understanding of the weaknesses and opportunities inherent in each relationship.
For help developing your corporate giving strategy or partnership strategy, contact us below to set up a time to discuss your goals.