By Andy Cummings
Your company is about to move into uncharted territory: It’s time to formalize a philanthropic program. You realize the importance of giving programs and the value they offer for your brand reputation. The question isn’t whether to invest in social change, but rather: Which route will have the most impact?
There’s a choice. You can set up a program focused on donations or make grants the focus. Both contribute to social change though each has its own unique benefits. Which path should you take, or should you have both grants and donations programs?
Grants are funds awarded to a nonprofit organization through an application process. In exchange for the grant, the nonprofit organization agrees to provide reports of progress toward the social goal. Your company is able to see and share the impact of your philanthropic contributions. There is also the opportunity for capacity building grants, designed to help nonprofit organizations carry out their missions more effectively. Many companies see grants programs as a way to demonstrate they are not just focused on making a profit.
The optimal approach is to decide which path aligns your goals with the social change you want to support, ideally working with a partner to help determine and implement your plan. At Versaic, a partnership approach is integral to our beliefs and system, sticking with you on your continuous journey to impact. Upfront we ask questions such as: How can we better understand and help meet your goals? What is the impact you’re looking to cause? What outcomes tell you you’re achieving that impact?
It is only by putting effort into this type of planning upfront that you can make an informed choice to do grants or donations.
Another important benefit of a grant to a nonprofit organization is validation. You’re lending the credibility of your company. It can be said that the support of a recognizable company has just as much value as the grant itself. Sequoia’s Caring Community Grants Program provides grants to non-profits that offer critical health services to District residents. This giving program aligns with their mission to improve the health of residents by providing access to care and promoting wellness.
Donations are also the tool many nonprofits use to ensure the future of programs launched by grants. Few grant-makers provide ongoing funds on an annual basis. Those funds come from donations.
The unrestricted nature of donations makes it possible for a nonprofit to use the funding wherever it’s necessary. Successful organizations can forecast a donation budget. They aren’t hampered by a lengthy application process, and there are no reporting or progress requirements.
The benefits of donating goods and services are plenty. Wyndham Hotels, for instance, donates hotel rewards points. This allows them to not only do good in the community but get the word out about their hotels. They are able to tie their donation program to their product and build their overall brand reputation.
People notice how much effort you are putting into your philanthropy programs. According to a study by Deloitte, 70 percent of millennials strongly favor companies committed to the community. Wegman’s has been finding ways to give back to the neighborhoods in which it operates for over 90 years, and its commitment to philanthropy makes it one of the most loved grocery chains in the country.
If you choose to make grants, you’re laying the foundation for an ongoing relationship. While the grant may be a one-time award, both you and the grantees must invest a significant amount of time in the process. Your reward is the ability to share the impact of your philanthropic efforts.
If you choose to make donations, your benefit can be much more dramatic. The funding has less stipulations. Nonprofits can use it where it will make the most sense. There’s far less interaction and involvement on your part.
Grantmaking provides you with more to leverage to promote your philanthropic efforts. Donations allow you to do less work. Both paths benefit nonprofit organizations equally. Both also contribute equally to social change.
Image credit: Flickr/Asenat29
Andy Cummings has been with Versaic since 2003 and has been instrumental in building Versaic’s leadership position in the sponsorship and philanthropy markets. Over the years, through his extensive knowledge of Versaic’s product architecture and thousands of conversations with clients, Andy has built a solid understanding of how the Versaic platform can be adapted to create the most relevant applications and client solutions.You can reach out to Versaic via Twitter (@Versaic) and Instagram.