Individual vs. Institutional Fundraising: the great divide – or not?
Individuals make funding decisions that correspond with deeply-held values, based on who asks them. Subject, of course, to their capacity to give and other pulls on their resources. Whether they base their decision more on linkage (to the asker) or interest (in the cause) is completely case-specific, although special events contributions tend to be more relationship-based and major donor gifts more cause-related, as a general rule of thumb.
While institutional funding sources weigh these three factors as well, the corporate sector is the closest to mimicking individual donors in terms of their “why.”
While government and foundations certainly take each of these factors into account, they usually weigh the match of a nonprofit’s programming with the foundation or government agency’s mission, such as ending childhood obesity, most heavily in making their decisions.
Corporations are another story. Jonathan Vazcones, Assistant Vice-President, Community Reinvestment at M & T Bank, speaking at a recent Cause Effective Corporate Funding Roundtable, put it very plainly: “Corporate funding is relationship-based.” Even special events, which are often transactional exchanges (I give you $1,000 and get 4 tickets to an event at which my employees will be able to make connections with potential customers), are dependent on personal connections to cut through the pile of invitations and barrage of emails received by corporate funders every day.
The good news is: in this age of social media, corporations have a tremendous incentive to pay attention and build relationships with potential customers (and those who can open a doorway to potential customers) – nothing about a turndown is private anymore. So if a nonprofit can establish any sort of human connection, corporations – especially those from highly-regulated industries, like banks, or with a consumer-facing business model, like retail establishments – are motivated to please.
The other big takeaway from the Roundtable? That those materials you spent hours painstakingly preparing, get an approximately 30-second scan from the potential funder on the other end. “I get so many of these things that I look for key words, the first page, the summary and the mission,” Vazcones explained. After that initial review, if there’s interest, they’ll look in more depth at the organization’s 990, board list, and ratings.
But above all, given the volume of materials that corporate funders receive, the credibility that comes from personal relationships is key. Corporations want to be responsive to their employees, and to those they’d like to do business with, so they’ll often take a deeper look depending on who put the request on their desk.
Corporations don’t make decisions. People at corporations do. More than government or institutional foundations, corporate funding is a people-driven decision – just like fundraising from individuals.