Time for corporates to stop celebrating and start innovating
Looking at the amount of media coverage given to awards ceremonies dedicated to corporate and charity partnerships in the UK, you’d be forgiven for thinking that charities raise the majority of their day-to-day cash flow through corporate money. But the numbers show this is a long way from the truth.
According to IOF’s Corporate Fundraising Report in July 2015, corporate support to charities was worth just £470 million, accounting for a paltry 2% of total NGO income in the UK. The majority of this corporate money, around 44%, is through employee driven ‘Charity of the Year’ models. Is this sustainable? – The ‘Charity of the Year’ model assumes that every employee will line up with one cause or one organisation. These crowd sourced funds very rarely affect the company’s own bottom line and have minimal impact on the company’s core operations or processes in tackling the issue directly.
Does the corporate involved in the charity partnership really do anything different itself?
Does the corporate involved in the charity partnership really do anything different itself after the charity is gone with regards to the underlying social, economic or environmental issues front and centre at the time of the partnership?
There is also a big assumption by companies that one cause, one workforce is something that a company can control. If I ask my colleagues “what social, economic or environmental issue affecting your community or the planet did you think about on the train to work this morning”, I’m sure that I’ll get a really diverse set of answers!
On the charity side of things government cuts mean that the third sector has the unenviable task of not only tackling the issues they already had on their list, but are now are also expected to hold the social safety nets that government no longer provides for its constituents.
So where next? Chairing the ‘Corporate Charity Partnerships Conference’ provided some useful insights into the ways that corporates and charities are learning to play to their strengths. An audience poll showed two things. The first words that come out of a corporate fundraiser’s mouth when talking to a company were: “Can I have some time?” This is a great improvement from the past few years where: “Can I have some cash?” to pay for existing projects. Secondly, when corporate charity fundraisers were asked: “Who is the best person to know what’s going on in the company?” and the answer given was: “the receptionist”, then we know that something isn’t working properly.
The new opportunity is the common realisation that charities and corporates can both be problem solvers. Charities are the most efficient sector at spotting unmet economic, social and environmental needs in society.
Companies have the ability to scale things up. This should be a perfect marriage. Charities often want to solve things themselves. How often do they say: “Our job is done?” Or seek out a merger with organisations who are doing the same thing but few happen Companies rarely go to the market if they’ve any uncertainty about their future or have unanswered questions. The fear of getting devalued by their owners is too great.
The future has got to be where corporates and charities get together
The future has got to be where corporates and charities get together and use their combined scale to share risks and solve social problems that the UK needs fixing.
We’ve already seen innovative corporates and charities team up to provide the upfront capital for social impact bonds and social investments. This is where the company puts its balance sheet capital into social and environmental issues that need fixing, even if it does this to shore up its current and future markets.
For a company like Legal & General who worries about macro issues such as an ageing population, health trends and giving more people access to a house, we of course should be working with a wide range of experts big and small.
Our current partners include Alzheimer’s Research UK who we helped create a website for the increasing number of kids who see older relatives grapple with this disease; Healthtalk.org. which is one of the largest peer to peer health advice websites who now provide video support for our own life assurance customers and Step Change, who help our employees deal with pension customers who drawing down large amounts of their pensions merely to pay off existing debts. We also are partnered with Warrior, Royal Voluntary Service, Elderly Accommodation Counsel and Help Age International.
These kinds of relationships are hugely relevant to us in understanding our day to day markets. The knowledge these charities possess means we can better understand changing trends for how real people are living their lives.
Any corporate and charity relationship should very simply be able to pass the Ronseal paint test i.e. “It does exactly what it says on the tin”. If it’s not immediately clear why the business is working with the charity, then maybe the partnership is just ‘window dressing’ as it’s not deep rooted enough in the common social, economic or environmental inequalities that both organisations share.
With less government money around, future partnerships will need to be set up directly between corporates and charities, with minimal government involvement. My prediction is that 2016 will see a new breed of joint ventures between companies and charities. Sharing of IP can help solve common problems, resulting in new products and services where both organisations share the development risk and the surpluses.