The Days of the Giant Check are Numbered

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December 24, 2013; Harvard Business Review, “HBR Blog Network”

There are certain rituals and artifacts that we all grew up with as a part of corporate philanthropy, and one of those is the presentation of the giant check, anchored on either side by a company CEO and a nonprofit exec. But Michael Norton, an associate professor at Harvard Business School, suggests in an interview that some of these familiar visual touchpoints may be disappearing in favor of new and more sophisticated processes that engage workers and provide them with decision making over the beneficiaries of their giving. Among the “innovations” he cites are options for employees to set aside monthly amounts for giving, employers matching staff donations, and employers and customers being invited to nominate charities for companies to support.

He describes this as follows: “Imagine getting an email from your employer that says, ‘Here is some cash, feel free to give it wherever you want,’ then going to a website where you can give to one of several charities that the company is supporting. It’s a kind of ‘prosocial’ bonus in addition to the more traditional bonus many companies give their employees.”

Only the last appears particularly innovative, since United Way Campaigns have long provided ways for people to designate who the recipients of their gifts will be, and matching gifts are decades old. However, the point Norton is making is still largely valid in that there is clearly a different contract between employees and employers—one less long-term and secure—and this bleeds over into styles and reasons for workplace charity. Norton, however, links these trends to studies on the value of emotional connection when giving. He also comments on them as a response to surveys showing Millennials wanting to do good for others as much as they want to buy things for themselves.

Will nonprofits get excited about the concept? Norton comments that, “Charities aren’t always excited about these innovations, because if you had a relationship with a company for many years, you are accustomed to getting a regular lump sum. New approaches really open up the door for employees to give to many different causes, complicating matters…. Many companies try to balance these issues with a hybrid model. The CEO doesn’t just pick one cause, but allows the employees to select, say, five charities. Employees still feel empowered to give where they want, but those five charities still receive a significant lump sum that they can count on.”—John Godfrey and Ruth McCambridge

  • Brian Hill

    “new and more sophisticated processes that engage workers and provide them with decision making over the beneficiaries of their giving. ”

    The end result of this idea is that small lesser known charities will probably get left out of the five final choices. As someone who runs a small cancer charity with only two occasional corporate sponsors that support us with an annual gift, I think this trend will hurt. In the cancer world, the big four – breast, lung, prostate and colon will be on people’s minds or they will have had some brush with them through someone they know. But how many people have even heard of oral cancer? How many votes will the customers or employees give to a disease that isn’t even on their radar? Does that make it unworthy of the corporation’s support?

    While we receive most of our funding through private individuals, our corporate sponsors are vital to our annual mission accomplishments. Should they adopt a system like this that sees them going with a consensus choice of a group that has little knowledge of a particular cause, those charities that represent small incidence diseases, those that are geographically localized, or those that represent an underserved cause or population (and likely unnoticed by the general population)will undoubtably be hurt. The big charities that are already receiving millions of dollars annually in support will reap even greater rewards from a new policy that is this myopic in its approach.

    Having spoken with many in the corporate benevolent giving world, I believe they see the merit is supporting small but meaningful causes, serviced by non-profits that have good metrics for result oriented behavior. They understand that their gift can alter the life and impact of a small but worthy charity, and often it is more impactful when they can, instead of just being added dollars in a big issue, be the singular agent of change in a lesser known one. One that would go unserviced if only those with the largest, marketing supported visibility are on a corporate donor’s radar.

    Brian Hill, The Oral Cancer Foundation