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Initial research into corporate fundraising

Charity Science is exploring all possible ways of fundraising for GiveWell-recommended charities that seem as though they might be promising. It’s valuable to conduct at least a quick exploration of these to see if they merit further investigation. As part of our commitment to transparency, we publish detailed notes on what we find so that the whole effective altruist community can learn from it. I’ve done some initial research into corporate fundraising, and here is a write-up of this.

Avenues pursued

I aimed to spend relatively little time on this unless it proved promising. I did only a couple of hours of initial research, followed by a few hours Skyping and corresponding with the most promising opportunity that I identified. So there is scope for more research, and this appears worth doing once we’ve exhausting more promising avenues; we plan to do this if we receive sufficient funding to keep Charity Science running or to expand it.

I searched for general writings on corporate fundraising, focusing on those which spoke to how promising it was overall. I used Google and particularly good websites on fundraising that we’d previously identified; I did not look at books in this brief research. My colleagues Joey and Xio and I have Skyped with several fundraising professionals and asked them about corporate fundraising among other things. Joey and Xio put considerable effort into identifying the best fundraising experts - they received paid consultancy from the best they could find, and have read his book, which covers corporate sponsorship of events. This is not covered in these notes as we class it under events fundraising, which we plan to scale up this year after a successful experiment with it.

I Skyped with Luchang Wang about a project that some members of Yale Effective Altruists have done in which they spoke to people at specific companies, for instance those involved in corporate social responsibility at major US pharmacy CVS, which notably removed tobacco products from its stores. They initially hoped to influence where companies donated, but their conversations cast some doubt on the prospects for this.

I conducted a very shallow search for websites offering help with corporate fundraising. I identified one which appeared worth pursuing: Global Impact/charity.org. I had an email exchange with them, then decided it was worth Skyping, and then had a further email exchange. I describe this below.

There are a few avenues that I found that I plan to investigate further, though as a relatively low priority. I identified Ashoka (a network of social entrepreneurs) as worth investigating further given that we have a contact there, and will describe what we find later. We also have someone who writes and edits books on corporate fundraising in our network, and I am waiting to talk to them.

General findings

I found consistent advice that the typical forms of corporate fundraising require the charity to have something worth offering to the company, such as an ability to reach a valuable audience through (for example) prominently sponsoring a charity event. This was echoed in what the Yale group heard in their conversations. I do not yet have solid evidence for it however.

Some of what I read indirectly suggested that corporate fundraising was best suited charities serving people in the developed world (where many corporations major customer bases are). But in my call with Global Impact I asked them whether international development charities could expect success, and they said that they could. They gave the example of extractive corporations (such as Exxon Mobil) which focus on malaria, which affects their workforces.

I talked to an EA who works as a management consultant and got GiveWell recommendations included in the list of charities donated to at his company. He suggested that it would be helpful to have glossy, persuasive materials on the charities from Charity Science, and we plan to create those. It seems possible that EAs working within companies could influence corporate or workforce giving, and we plan to gather more evidence on this, likely including encouraging people to try it out and helping them.

The most promising opportunity that we found

Global Impact provides paid services to both charities and companies interested in corporate social responsibility. For companies, these include (but are not limited to) running a workplace giving scheme and advising on choosing charities in a favoured area. For charities, these include (but are not limited to) offering participating in their workplace giving scheme, helping with corporate fundraising (including identifying promising corporations to approach), designing and implementing fundraising strategies (including foundation identification and research), and secretarial services.

We identified several of these services as worth investigating. The most promising was the workplace giving scheme, as this moves a great deal of money and reaches an enormous number of employees at major state and federal agencies and corporations (such as American Express, Amazon, Intel JP Morgan, McDonalds, Microsoft and Shell). It is worth looking at these lists to get a sense of its scale. As is normal, it was difficult to pin Global Impact down on how much we could expect to raise. However, after some discussion they said: “Just to give you an estimate, charities in our federation that have gross revenues of between $3-5 million and are with us for both public and private sector campaigns, average approximately $20,000 in pledges per year.” This was in response to my asking them to give an estimate for AMF, given that spends around £2,000,000 ($3.1m) a year. They were very familiar with AMF, knowing the people involved.

This appears promising, and it is possible that it could raise significant amounts of money for some of the world’s most effective charities. However participation costs $2,500 a year (as well as a 5% commission on donations). We feel that we do not have sufficient evidence to justify this expenditure. Among other things, Charity Science is not in a financial position to take punts which have a good chance of not paying off, even if in expectation they will have a large positive impact.

The other services that we identified as worth exploring were identification of promising corporate donors to approach, and designing and implementing a fundraising diversification strategy. The most promising element of the latter was foundation identification and research; however we identified and applied to promising corporate foundations during our unsuccessful early (six month) experiment with grant-writing, and this has lead to our seeing them as not particularly promising. We were quoted $10,000 to $15,000 for the first service and $5,000 to $25,000 for the second. We do not regard this as worth paying; I am more confident of this than I am for the workplace giving scheme opportunity.

An important caveat to the above is that it is quite hard to judge how promising these opportunities are. We tend towards an unusually pessimistic view, and I am not at all confident that this is correct. I would welcome others’ comments and suggestions, as well as promising avenues to explore or contacts we could get in touch with.

Comments (14)

Comment author: Peter_Hurford  (EA Profile) 26 January 2015 01:59:32AM 5 points [-]

average approximately $20,000 in pledges per year

However participation costs $2,500 a year (as well as a 5% commission on donations)

You'd only have to be 15% confident ($20K * 0.95 - $2.5K = $16.5K. $16.5K / $2.5K = 6.6. 1 / 6.6 = ~15%) you would achieve the average or more for it to be worth worth trying out, not accounting for the existence of better investment opportunities.

And you'd only have to raise $2.7K to more than break even, not accounting for time costs or better investment opportunities (X * 0.95 = $2.5K. $2.5K / 0.95 = $2632).

Seems worth exploring a little bit more to me.

Comment author: Owen_Cotton-Barratt 26 January 2015 12:28:04PM 3 points [-]

I agree with this. You might try raising money for this directly. I'd think if you put together a 1-2 page document outlining the giving opportunity with the potential benefits (including value of information!), there's a fair chance that you could get money for it from people in this community.

Comment author: Tom_Ash  (EA Profile) 13 February 2015 07:57:29PM 0 points [-]

As an update we're going to do this, so thanks for the suggestion! It'd be great if anyone interested could comment or message me in the meantime.

Comment author: Tom_Ash  (EA Profile) 26 January 2015 04:30:38PM 0 points [-]

That's an interesting suggestion, thanks for that - we'll consider it.

Comment author: tomstocker 29 January 2015 04:47:11PM *  0 points [-]

"However participation costs $2,500 a year (as well as a 5% commission on donations). We feel that we do not have sufficient evidence to justify this expenditure. Among other things, Charity Science is not in a financial position to take punts which have a good chance of not paying off, even if in expectation they will have a large positive impact."

feels like a shame to let a small financial barrier get in the way of a large positive impact...

If you did feel like there was a 7% or greater chance, I'd put in £100-£400 on this gamble if you were raising for amf and £100-£400 loss coverage if this was raising for charity science (I'd want a claim on the first £x equivalent to what I put in after recouperating costs) - but need to agree with my giving partner first.

Comment author: Tom_Ash  (EA Profile) 13 February 2015 07:58:13PM 1 point [-]

Hi Tom, we'd love to take you up on that as we've decided that there is sufficient chance!

Comment author: MarkusAnderljung 26 January 2015 01:35:14PM 3 points [-]

Interesting to read! Good to see you're considering such a wide variety of ways to fundraise.

My thought in reading this was that it seems difficult for outsiders to companies to sway them to give to more effective charities. But could there be a bigger chance of success if it was driven by EA employees at companies e.g. talking to their CSR department? Charity Science's role could then be in supporting these EAs.

Comment author: Tom_Ash  (EA Profile) 26 January 2015 03:18:46PM 0 points [-]

That's a very good point, I agree and should have mentioned that - I've added it in. I've talked to an EA who works as a management consultant and got GiveWell recommendations included in the list of charities donated to at his company. He suggested that it would be helpful to have glossy, persuasive materials on the charities from Charity Science, and we plan to create those.

Comment author: ChrisSmith 27 January 2015 08:59:07PM 0 points [-]

These materials should be useful for peer-to-peer fundraising as well.

To pick an example from a mainstream charitable context, Macmillan Cancer Support produce materials which explain what cancer is, why it is a problem and how they (Macmillan) tackle it (something close to their theory of change). These materials are mostly designed for peer-to-peer fundraising, but would also be useful for me if I wanted to promote Macmillan in a corporate fundraising case as well.

http://be.macmillan.org.uk/be/default.aspx

(Disclosure - I'm the management consultant Tom is referring to in the opening post)

Comment author: Telofy  (EA Profile) 26 January 2015 06:30:38AM *  1 point [-]

I’ve just written a business plan for a payroll giving and matching gifts SaaS provider that specializes in highly effective giving. I can send you a copy if you like, but I attached my full CV to it, so I don’t want to publish it in its current form.

The idea is to replicate the established model of such a SaaS provider but to convince companies to only match employee donations to highly effective charities to incentivize effective giving. Additionally, the management of the clients of such a provider will be in a perfect position to convey the idea of EA to their employees, so my idea was to add an EA outreach consulting service to the portfolio of the hypothetical SaaS provider.

CSR can take the form of shared value, risk management, corporate philanthropy, and possibly some mixed forms. Such a SaaS provider could add little benefit for the company if it already runs a shared value scheme, but in the other cases, especially in the last, an EA matching gifts scheme would add value to CSR that focuses on such goals as attracting talent or improving public perception. Especially since a common criticism leveled against CSR is that it is often self-serving and hence unfocused and nontransparent about its impact, such a program would enable a company to distinguish itself from other companies that engage in CSR.

My current plan is not to start such a SaaS provider, or not as a first option, but rather to first reach out to the existing providers of such software worldwide and ask whether they would be ready to use their position and leverage to approach their existing corporate clients and promote the same scheme themselves. With the help of AMF, I’ve compiled a list of ten more or less large providers. If this is close to what Charity Science would be interested in pursuing, then I’d be delighted to collaborate with you!

Comment author: tyleralterman 28 January 2015 11:42:05PM 0 points [-]

Also, I plan to strategize soon on shifting corporate philanthropy in a top-down way with Google's global corporate social responsibility lead (she self-identifies as EA). (Example: sell corporate decision-makers on EA.) So let me know if you dig up anything in this arena.

Comment author: tyleralterman 28 January 2015 11:38:14PM 0 points [-]

GOOD/Corps (www.goodcorps.com) is another nice resource. I've been in contact with them in case anyone wants an intro.

Comment author: John_Maxwell_IV 26 January 2015 05:26:06AM *  0 points [-]

I found consistent advice that the typical forms of corporate fundraising require the charity to have something worth offering to the company, such as an ability to reach a valuable audience through (for example) prominently sponsoring a charity event.

This is pretty interesting. Givewell spends a lot of time thinking about effective giving; I wonder what an effective charity event looks like?

Comment author: Tom_Ash  (EA Profile) 26 January 2015 04:31:57PM 0 points [-]

The idea in this advice is that the company would sponsor a charity event like a big walk or dinner that the charity does, likely for fundraising.