ong before the large individual and family
gifts that now dominate so much of
Canada’s giving culture became commonplace, corporations were taking the lead to
support some of our country’s most important and significant projects. Without that
partnership, many of our health care, cultural
and educational institutions would not be
in the positions they are today. And for that
tremendous support, our sector owes the corporate community a strong debt of gratitude.
L
In order to better understand the current reality
of corporate Canada and to assist in developing
an appreciation of what both corporations and
charities are facing, this edition of Philanthropic
Trends Quarterly explores corporate giving.
With input from representatives of corporate
Canada as well as a selection of our Trends
Advisory Board members, we review what
the sector is currently facing. Our investigation
revealed details of the present situation
facing corporations, uncovered how charities
are responding and also disclosed how both
sides are utilizing creativity to find ways to
maximize support for important charitable
work in Canada.
We also sat down with Jan Belanger, Assistant
Vice-President, Community Affairs for Great
West Life,London Life and Canada Life as well as
a member of our Philanthropic Trends Advisory
Board for an in-depth interview. In our conversation, we asked Jan to provide her thoughts
on the situation facing corporate philanthropists
in the current economy as well as her advice to
charities as they approach corporations over the
next few months. We will share that interview,
which will be available on our website, shortly.
Finally, we take a long term view of the
direction in which corporate philanthropy
and sponsorship is headed by discussing
emerging trends such as cause marketing
and the facilitation of collaborations within
the charitable sector.
As always, we hope you find the information
helpful and informative. Happy reading and
have a wonderful summer!
Marnie Spears
President and CEO
Corporate Giving: Past, Present & Future
he magnitude of Canadian corporate support
is undeniable.
T
Based on Statistics Canada data, the total value of
gifts made by corporations in Canada between
1988 and 2000 was over $8.5 billion. In addition,
KCI has tracked all major gifts (defined as gifts
greater than $500,000) made by corporations since
2003, which totals more than $1.1 billion. By combining the two figures, we can estimate that corporations have contributed more than $10 billion
to the charitable sector over the past 20 years.
S TAT I S T I C S
Year
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
O N
C O R P O R AT E
Corporate Pre-tax Profits
$64.89 billion
$59.66 billion
$44.94 billion
$32.92 billion
$32.65 billion
$41.10 billion
$65.46 billion
$76.27 billion
$80.34 billion
$87.93 billion
$86.13 billion
$108.75 billion
$129.82 billion
G I V I N G
Corporate Charitable
Donations*
$414.20 million
$502.93 million
$412.99 million
$431.37 million
$453.98 million
$464.74 million
$597.72 million
$629.87 million
$775.98 million
$800.88 million
$1,135.90 million
$1,135.90 million
$1,337.60 million
I N
C A N A D A
Donations as a percent of
Corporate Pre-tax Profits*
0.64%
0.84%
0.92%
1.31%
1.39%
1.13%
0.91%
0.83%
0.97%
0.91%
1.33%
1.04%
1.03%
* All figures have been adjusted for inflation. Source: Statistics Canada: Canadian Corporate Profits Before Tax and Canada
Customs & Revenue Agency: Allowed Charitable Donations by Corporations (all except exempt) CORPAC/CORTAX
2
SUMMER 2009
F R O M
1 9 8 8
-
2 0 0 8
Corporate Gifts over $500,000: 2003-2008
$ in millions
100
80
$172
Not surprisingly, our research and interviews
revealed that the economic downturn has
Based on our interviews, one area that seems
most heavily hit is event sponsorship, which is of
special concern to arts and culture organizations
as well as the health care sector. Our interviews
revealed that there appears to be a smaller
appetite for sponsorship support than has been
enjoyed in previous years. During these times,
corporations feel a heightened sense of responsibility to both their employees and shareholders.
$164
Tough Time for Corporate Donors
A new report from the Conference Board of
Canada, which is expected for release this summer, reveals that issues related to the economic
downturn are a significant concern among corporate giving officers. The report entitled The 2009
Corporate Philanthropy Agenda: How the Economic
Downturn is Affecting Corporate Giving is based
on a February 2009 survey of 158 companies. The
survey revealed that limits to budgetary resources
(56% of respondents) and the current economic
downturn in general (50% of respondents) will
have an impact on their grantmaking abilities.
When asked what they anticipated would be
their biggest challenge in 2009,respondents most
frequently indicated an increase in grant requests
coupled with a decline in financial resources.
$186
Although these numbers are impressive and provide an illustration of the tremendous support
that corporations have shown to Canadian charities, the current preoccupation of most in the
sector is the immediate reality of the economic
situation and the impact that it will have on corporate giving. KCI’s investigation has revealed
both good and not-so-good news as well as some
examples of innovation and creative solutions.
impacted the ability of corporations to support
the not-for-profit sector and these challenges
are expected to continue throughout 2009.
# of gifts
The following table and chart provide more detail
on these figures. The table containing data from
1988-2000 demonstrates that even in difficult
economic times like the mid 1990’s, Canada’s
corporations continued to step up to the plate.
In addition, the chart on major giving (defined in
this case as gifts in excess of $500,000) illustrates
that the number of major gifts from the corporate community is also growing.
60
40
20
0
2003 2004 2005 2006 2007 2008
Based on data collected by KCI’s Research Department
Charities are responding to the changing landscape of sponsorships in a number of ways,
including retooling their special event programs.
Toronto General & Western Foundation has
chosen to continue with their events, even if they
are on a smaller scale and raise fewer funds. “We
want to maintain our presence in the community
and these events are one way for us to do that,”
says Tennys Hanson, President & CEO, Toronto
General & Western Foundation.“So we are going
ahead with most of our events, but may change
their formats as well as our revenue expectations
depending on the situation.” Anticipating that
there will probably be less revenue the Foundation is developing a third party event strategy as
a means to meet revenue goals.
Other charities are responding by providing better benefits to sponsors, recognizing donors at
the level of their previous gifts regardless of their
gift this year, as well as entering into longer term
sponsorship arrangements with organizations that
will last 3-5 years.
Although corporate donations appear to be faring slightly better, there has been impact in this
area as well. Many charities are noting delays in
pledge payments, requests for longer pledge
periods as well as outright cancellation in some
instances. As a result, it is important to approach
corporations with an understanding that there
may be a longer time horizon in terms of decision
“
making and payment. The most significant challenge appears to be in securing new gifts. For
example, some corporations are finding that the
multi-year pledges they have made to capital
campaigns are affecting their ability to make significant new gifts, as in some cases, these pledge
commitments are consuming two-thirds or more
of current year budgets. Vicki Reid, team head,
Community Affairs at EnCana, confirms these
“
According to a community investment professional based in Calgary, sponsorships are being
thoughtfully assessed, particularly through the
lens of how they will be perceived by employees,
shareholders and the community in general.
...the corporate community
is still very engaged and
showing no intention of
walking away from
Canada’s charitable sector.
budgetary challenges.“We are still very committed to our Community Investment program and
our community partners, but are being cautious
about entering into multi-year pledges that will
eat up our future budgets”.
But the Commitment Remains
At the same time,however,the corporate community is still very engaged and showing no intention
of walking away from Canada’s charitable sector.
Our interviews revealed a definite intention on
the part of Corporate Canada to “stay the course”
as much as possible. For instance, many corporations are choosing to keep their philanthropic
budgets flat or only slightly lower for 2009 rather
than dramatically slashing budgets in response
to the current economic challenges. In addition,
corporations are generally looking to maintain the
status quo with respect to their philanthropic
priorities and policies for decision making.
The experience of a number of charities confirms
that commitment as they report an ongoing willingness on the part of corporations to meet and
discuss previous gifts as well as future support.
“We have had good success in securing meetings
with corporate prospects to discuss our current
projects and priorities,” says Ted Garrard, VicePresident (External) University of Western Ontario
and incoming CEO,Sick Kids Foundation. “Although
the timing may not be right for an immediate gift,
we are still finding an interest in talking about
what they could do and are being provided with
a sense of when to come back.” Garrard also sees
this time as a perfect opportunity for charities to
undertake cultivation and alignment work with
current and prospective corporate partners.
Guy Mallabone, Vice President, External Relations
at SAIT (Southern Alberta Institute of Technology),
further advocates that, while being respectful of
the current economic situation, it is important for
charities to not only meet with corporations but to
continue to make asks. And he has found a willingness to entertain those asks.“Making an ask does
not necessarily mean that you will get a gift at this
point in time,”states Mallabone.“But I believe it is a
worthwhile endeavour to get your value proposition on the table in order to be on the radar screen
and in the queue for when things turn around.”
Mallabone cautions that because of the budgetary
constraints of most corporate giving programs,
charities should expect more questions. Scott
Mullin, TD Bank’s Vice President of Government
and Community Relations confirms that because
What’s Next?
Although a significant factor already, the alignment with corporate goals and objectives will
become even more prevalent and important in
guiding the investment decisions of corporations.
The desire to see how a project fits and can help
advance not only the philanthropic interests of a
corporation but also its business interests and
brand will be key to decision-making. In addition,
accountability back to the corporation demonstrating the impact of the gift will become even
more critical, a comment we heard repeatedly
during our interviews with corporations.
Charitable organizations are already looking at
ways to partner with corporations beyond simply
soliciting donations and sponsorships. For instance,
many universities and colleges already consider
the larger picture when strategizing relationships
with their corporate partners and include all
parts of the university and its units in a cohesive
strategy. This approach not only strengthens the
relationship by creating various points of contact,
this integrated strategy is the epitome of donorcentredness. As a result, this type of relationship
may well become the norm for corporations in
dealing with their charitable partners.
Collaboration between not-for-profits is becoming more commonplace and is a trend that is
expected to continue. Corporations, particularly
those with large and sophisticated community
investment departments, often have a knowledge
of the charitable work occurring in particular
sectors and also possess the know-how to bring
different groups together. “More and more,
we are looking to work with organizations to
address complex issues, such as literacy, poverty,
and mental health, to name a few”, says
Jan Belanger, Assistant Vice-President of Community Affairs, for Great-West Life, London Life
and Canada Life. “That means we are seeking
opportunities to help optimize the power of
people, organizations and collective resources by
facilitating partnerships, rather than funding
projects in isolation.” She notes that in her organization, she and her team are particularly sensitive to funding solutions where new approaches
and knowledge will be shared and adapted
beyond the organizations involved, thereby
enabling greater impact.
Cause marketing is another area of growing interest
for many corporations, particularly for those that are
consumer based. Already prevalent in the United
States, this practice is becoming more common in
Canada. For more information on cause marketing
and its expected role in the Canadian philanthropic
marketplace, visit www.kciphilanthropy.com/docs/
causemark-e.pdf
SUMMER 2009
3
of budget challenges as well as the sheer volume
of asks currently being put forward, many corporations are being more rigorous in their review of
proposals. “The questions we are now asking are
not dissimilar to what we used to ask”, he says.
“But now we are expecting more robust answers.”
Specifically he says, corporations are looking for
charities to provide information on the value
proposition for investment, the definition of
project success and tangible metrics on how
they will measure impact.
Relationships are Key
It also appears that the adage that fundraising
success is primarily about relationships holds
true. “I believe that the strength of existing relationships will be a key to holding organizations
in good stead,” says Ron Dumouchelle, President
and CEO of VGH & UBC Hospital Foundation. “As
a result, we are making stewardship a key focus
of our activities in an effort to further strengthen
the relationships we share with our current
friends and partners.”
The experience of United Way Toronto as it commences its 2009 corporate campaign substantiates
the value of relationships.“Although we have just
begun having conversations with our corporate supporters, we have heard a strong commitment that
they will do what they can to support us at a level
as close to previous years as possible,”says Susan
McIsaac, United Way’s Chief Development Officer.
KCI’s corporate interviews corroborated this sentiment. Although corporations will certainly be
looking to fund new programs and initiatives,
interviewees indicated that they felt a strong
responsibility to the organizations with which
Marnie A. Spears
President and CEO
Nicole Nakoneshny
Senior Consultant & Editor,
Philanthropic Trends Quarterly
Tips for Corporate Approaches During Tough Times
Granted this is a challenging time for corporate
fundraising in Canada, but there are still opportunities that can be realized by following some best
practices. We asked interviewees from both charities and corporations to share their best advice
for approaching corporations during times like
these. Here is a summary of their responses.
1. Align with business strategy. As already
mentioned, demonstrable alignment to business
goals and objectives is a key part of the decision
making process for corporate philanthropic investments and is one that is growing in importance.
As a result, be sure that all projects put forward
align with the corporation’s brand and marketing
and also make certain to demonstrate that fit in
your proposals.
2. Align with philanthropic strategy. Although
corporations are often looking to fund projects
that align with their business interests, they have
philanthropic objectives as well. Take the time to
understand what projects they are currently supporting and look for ways to enhance and build
on those investments. Charitable organizations
have a tendency to look at recent gifts made by
corporate entities and if there are contributions
to organizations with similar mandates, they don’t
bother to submit a proposal. A better strategy is
to understand their philanthropic goals and look
for ways that your organization can enhance
their current investments.
3. Define success and demonstrate outcomes.
We heard loud and clear from both corporations
and leading charities that defining project success and demonstrating the ability to measure
that success are crucial when approaching corporate donors. As a result, it is critical to determine
they already had relationships and which consequently have a strong dependence on them for
support. As a result, charitable organizations that
have taken the time to build and cement relationships with corporate partners may find the
upcoming months somewhat less challenging.
what success will look like for every project that
is submitted for consideration and also to be able
to illustrate the metrics that will be used to measure the impact of their investment.
4. Solidify relationships. Steward, steward,
steward. In these tough times, we heard from
both corporations and charities alike that their
current relationships would be of primary importance. From the point of view of charitable
organizations, they are looking to retain their
existing donors, while corporations are conscious of taking care of the organizations that
currently rely on them for support. As a result,
charities should be investing a great deal of
time and energy in keeping corporate partners
informed about the impact of past investments
as well as about current projects.
5. Continue to ask. While being mindful of their
current situation, keep making asks of corporate
prospects. At best, the response will be positive
and at worst, you can begin a conversation and
put yourself in the queue for when the economy
improves.
6. Refresh your case. Now is the time to review
and refresh the case for support that you take to
corporate prospects.It should be looked at through
the lens of impact, success, alignment with corporate strategy and measurable outcomes.
7. Don’t forget the basics. The principles that
hold true about corporate philanthropy during
good economic times are still valid in this economy and should not be forgotten. Fundraising is
about relationships, so be sure to utilize the right
people in your network and work hard to create
interest in what you have to offer.
desire to help,” he says. “As always, the first step
is to get them excited about making a difference.” Regardless of the economic situation, this
principle always applies.
On a final note, some excellent advice from Dean
Brinton, President & CEO, The Rooms in Newfoundland to remind us of the philosophy that
should guide our behaviours in both good times
and bad. “We can’t forget that we are dealing
with high-minded individuals who have a strong
Next issue:
• Our next issue will focus on cost
per dollar raised.
• Watch for it in September 2009!
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is prohibited. Philanthropic Trends Quarterly© is intended to
provide an anecdotal ‘snapshot’ of philanthropy in Canada.
We hope it will serve as a useful overview for observers of the
charitable and nonprofit scene.
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Interview with Jan Belanger
Jan Belanger, Assistant Vice-President, Community Affairs for Great-West Life, London Life and
Canada Life and member of our Philanthropic Trends Advisory Board, recently sat down with us to
discuss a number of issues related to corporate philanthropy. During our discussion, we explored the
impact of the current economy on corporate giving in Canada and also took the opportunity to get Jan’s
thoughts on emerging trends in corporate philanthropy. Here is a summary of our conversation.
Q. What is the current practice at Great-West Life, London Life and Canada Life
regarding corporate philanthropy and sponsorship?
A. As an Imagine Caring Company, we donate a minimum of one per cent of average pre-tax profits to
non-profit, charitable and community organizations each year. Our corporate citizenship program, The
Key to Giving™, remains a framework for building collaborative and long-term relationships with
organizations working on issues of concern to Canadians. This combination has given us a stable
foundation for our ongoing community efforts, one that helps us effectively meet the challenges associated
with corporate giving in an economic downturn.
What’s changing is the landscape of Canadian needs and the types of challenges emerging. We are
experiencing an escalation in both the number and complexity of issues. Thankfully, our program is
structured to allow us to make well-considered and informed responses without straying from our overall
framework.
Q. What might charities expect from corporations over the next couple of years with
respect to gifts and sponsorships? Is there one area (i.e. donations or sponsorship) that
will be more impacted than others?
A. Many charities have remarked that there has been a general retrenching, reduction or postponement of
corporate giving. Some corporations are pulling back on funding or accelerating their shift toward
community initiatives that deliver greater measurability or are more closely aligned with business and
brand objectives. How to recognize these community efforts now also may be different, requiring
sensitivity and discussion.
Other companies are focusing more on basic human needs as the impact of job loss and the uncertain
economy takes hold with increased poverty, hunger, and homelessness. With that focus comes a broader
understanding of the need for operational funding to underpin the delivery of services by charitable
organizations. Project funding alone cannot create sustained results if a charity’s infrastructure is
compromised.
It’s difficult to predict whether charitable donations or sponsorships will be most affected, or which
method of funding will prove a better fit for addressing new challenges. As always, that will vary from one
corporation and community organization to another. Perhaps more than ever, there’s greater need to
detail the purpose and application of requested funding. For example, how would the funding address
overall goals, and contribute to the charity’s total revenue stream and operations?
Q. What might corporations be looking for from charities, both generally and in the
context of the current economy? What changes (if any) has the downturn produced in
terms of what corporations may be looking for from charities?
A. Corporations and charities are now connecting in a state of “business as unusual”. While this
encourages creative new approaches, it’s important to first take the time to get back to basics. At a time of
change, clarity and transparency are key. Corporate funders and charities must communicate clearly with
one another to understand mutual expectations and to concentrate their combined efforts on the issues
affecting society.
What is our understanding of each other’s organizations, current realities and future directions? What are
our respective goals in responding to community issues? How do we each define and value results and
impact? Who are our mutual stakeholders? For charities, what distinguishes you and the services you
provide? With whom do you partner to achieve your success? What are your revenue sources and how
are they evolving?
While the current economy has created added pressures, real opportunity lies in developing a deeper
mutual understanding, building trust, and strengthening relationships. With that as a foundation, the
emerging leaders from the voluntary sector will be those who approach existing and prospective corporate
donors with a demonstrated focus on accountability, relevancy, collaboration and stewardship.
Q. What advice, if any, might be given to charities in their approach to corporate
Canada?
A. This is a time of increased need and expectations, but within greater constraints. With funding and
other resources tightened, companies are more likely to support organizations that are well informed, and
are looking ahead and around them. Once the basics are addressed, be prepared and open to exploring
both short and longer term issues. That means realizing and focusing on your core strengths and abilities
and demonstrating a willingness to address solutions in new ways. Having a worthy cause on its own may
no longer be enough.
The charities and non-profits that demonstrate organizational flexibility to achieve their goals and who
are able to work in partnership with other like-minded organizations are more apt to weather today’s
environment. The ability to reach outside to share and leverage expertise, services and networks will
demonstrate leadership, innovation and efficacy.
And, if a corporation must reduce or curtail its previous levels of funding, it will be important to honour
the relationship that’s occurred to that point. The company should be assured that their past efforts and
generosity remain valued by the charity, its staff, board members, volunteers and stakeholders. Genuine
acknowledgement through both words and actions will help pave the way for future contact – whether or
not involving financial assistance – when economic circumstances improve.
Q. Looking beyond the current economic situation, what other trends can be seen with
respect to corporate support once the downturn subsides?
Stewardship will be considered a core value and performance outcome. Charities and non-profits are
expected to have expertise and experience in their fields. But they must also be adept at managing the
corporate relationships that help them make progress, and adept at managing the investments donors
make. It’s no longer a simple matter of recognition and regular communication with corporate donors.
Greater financial, organizational and program accountability will play a key role, as will developing a clear
understanding of mutual expectations from the outset. This requires proactive stewardship programs with
internal operational structures to support them, and the ability to tailor to reflect the donor relationship.
Watch for more focus on supporting issues, rather than specific organizations. With many charities
performing similar or complementary services, there may be greater likelihood for support if there’s a
willingness among these organizations to partner to achieve common objectives. It’s a trend that involves
bridging opportunities, expertise and resources to create integrated services and solutions, wherever
appropriate.
There’s also a growing interest in knowledge transfer — the development, sharing and application of best
practices and competencies with a broader community. With finite resources and capacity, this approach
holds the potential to extend impact beyond organizational boundaries. Companies can extend their reach
beyond a direct funding relationship, and charities can further develop their influence and capacity. This
can be a direct outcome of effective collaboration or a natural extension of an effective charity’s
leadership.
Lastly, there’s a shift toward finding new models for long-term funding. Until recently, endowments have
been considered a pre-eminent vehicle, but investment cycles are creating barriers for results and
participation. There’s the additional challenge of specific Chairs and other naming opportunities
established to exist in perpetuity. As needs evolve and institutions respond, will these goals and programs
still be relevant in ten or fifteen years? The economic downturn may be the catalyst for creating new longterm funding methodologies that are more flexible and less restrictive.
There’s no question that the current economic situation and the trends going forward demand greater
time, energy and creativity, within a context of limited resources. Even within this new reality, however,
there are many opportunities. By working together, focusing on the fundamentals, and achieving a better
understanding of key stakeholders, there's potential to build stronger, more vibrant and inclusive
communities.
Cause marketing: Short-Term Fad or the Future of Corporate
Philanthropy?
Cause marketing pairs the support of a charitable cause with the purchase or promotion of a
product. One of the best known examples of cause marketing is the (PRODUCT) RED Campaign,
which is supported around the world by companies like Gap Inc., Apple Inc. and Starbucks Corp.
By purchasing products that carry the (RED) brand, consumers are also supporting non profit
organizations doing charitable works across the globe.
The concept of cause marketing, which is also known as “consumption philanthropy”, has become
much more prevalent over the last several years, particularly in the United States. One way to
measure its pervasiveness is by the amount of money that corporations spend on this activity. A
recent study that tracked cause related marketing activities in the US revealed that these
expenditures have grown to approximately $1.3 billion in 2006.
Why has it gained such popularity? Probably because of its impact, which is seen as a win-win for
both the corporation and the organization it supports. Not only do these activities generate
millions of dollars for the recipient charities and create for them instant legitimacy by being
associated with a well known corporate entity, they also have a positive effect on corporate sales
and image. For instance, a 2004 report from Cone/Rope in the US found that 86% of
respondents were “very or somewhat likely to switch from one brand to another that is about the
same price and quality, if the other brand is associated with a cause.”
Cause marketing is not without its detractors, however. Concern has been expressed about the
impact that these activities will have on individual philanthropy. Will consumers who have made
contributions through purchase be more reluctant to make outright gifts to charity? Will they feel
by supporting cause related marketing activities that they have done their philanthropic share?
Answers to these questions are as yet unclear, and more research will have to be done to
understand how “making a gift at the checkout” will impact overall donor behaviour.
Cause marketing is becoming more common in Canada, but is still secondary to the more
traditional sponsorship activities of corporations. Imagine Canada’s Corporate Community
Investment Practices, Motivations and Challenges Report reveals that overall, only 8%
of businesses in Canada participated in cause marketing activities. The Report also revealed that
cause marketing, not surprisingly, is also far more prevalent among large companies, defined in
this case as those with revenues exceeding $25 million. In this category, cause marketing
participation jumped to 26%.