Can Not-For-Profit Organizations Compete Against Corporate Foundations?

By Jason Egbuna of CMA's NFP Council

The Not-for-Profit (NFP) landscape has changed so much over the past few years it has almost become a cliché to reference how much it is changing.  The continuing shift from print to digital and the evolution of integrated marketing are just two examples of topics that could easily fill a conference with a myriad of sessions, but what about the increasing significance of corporate foundations?  What kind of impact do NFPs that have a connection to a larger corporate entity have on the Canadian giving landscape?  Do they have significant advantages compared to other NFPs? 

Cathy Loblaw is the President & CEO of Ronald McDonald House Charities of Canada (RMHCC), a thirteen chapter organization that “provides a home away from home for the families of seriously ill children who are staying at a nearby hospital.”  With each chapter receiving financial and in-kind donations from McDonald’s Restaurants of Canada, I asked for her opinion on whether or not the playing field was level for the different types of NFPs.  Her view is that every charity has a certain point of advantage and in order to succeed, they need to leverage that advantage.  For RMHCC, she feels that their strengths are in strong leadership and the sustainability of their fundraising process, which allows chapters to know their base level funding and have 100% of their operating costs covered by the parent corporation. 

Landon French, President of Canadian Tire Jumpstart Charities, voiced the same idea of every charity having its own specific marketing advantage, but also stressed that one of the benefits of having a relationship with Canadian Tire is the extensive level of support from all banners across the country.  With Jumpstart being dedicated to “removing financial barriers so kids across Canada have the opportunity to get off the sidelines and get into the game,” national support helps their organization have 100% of funds raised remain in their designated neighbourhoods, helping to meet needs in every community. 

But while operating costs and targeting funds raised can be more aptly controlled in corporate foundations, there are some challenges.  While Jumpstart has been able to help over 200,000 kids a year engage in sports, Landon French says that it’s tough to keep up with the level of demand in various communities.  It’s the age-old question that NFP professionals face on a daily basis: how much effective work can you do in the community with the funding that is available?  After you have identified the need, started to have an impact in the community, and knowledge of your services grows, how far can you stretch funding before it has an impact on the quality of services you provide? 

Cathy Loblaw says that while being connected to McDonald’s Restaurants of Canada provides RMHCC with the ability to better cope with growth or economic upheaval (McDonald’s Restaurants of Canada accounts for 92% of RMHCC revenue), the key to providing sustainable and beneficial services is developing strong partnerships with donors.  Ronald McDonald House has doubled the number of bedrooms it has for families over the past five years, but even with that rapid growth, they still had to turn away 3,000 families last year.  With 70% of Canadians living outside of an area with a children’s hospital, there is a need for their services in communities across Canada; therefore, communicating its urgency is a challenge they face on a daily basis.

So does this mean that we are going to see a steady increase in corporate charities?  Will the public gravitate towards organizations where donor funds do not have to help with overhead costs? 

Cathy Loblaw says that everything in the philanthropic world is getting more sophisticated, including donors who will go where they feel their donations are able to make the most impact. She believes that donors want to view organizations as “social impact partners,” not just a place where their donations go to disappear. 

Landon French echoed this sentiment, but also connected it to employees feeling engaged with the organization and believing that their work is making a difference.  This strong sense of accomplishment has allowed Jumpstart to boast of high employee retention, stating that 92% of their workforce is happy to be a part of the organization. 

Could it be that while we have been spending time focusing on how these organizations will impact donor behaviour, the real change will come from NFP employees and internal culture changes?  It will definitely be interesting to watch.

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Tags: corporate foundation, nfp, not-for-profit, canadian tire jumpstart, donor, philanthropy, ronald mcdonald house