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Is Corporate Money a Tool?

March 18, 2022

Last week, I wrote about money being a tool (a means to an end) here and that there may not be such a thing as good money or bad money. Everyone has baggage. This week, I’d like to examine the same issue concerning corporate money.

There are two sides to accepting the “bad money” debate, and both have genuine merit. On the one hand, the nonprofit likely needs financial support to accomplish its goals, and the other side is where the corporation’s values are incongruent with the values of the nonprofit.

I think this possible disconnect is a huge issue that should likely be headed off at the pass by creating a Gift Acceptance Policy. If you delineate your organization’s values and list examples of “good money” versus “bad money”, it will help you when these topics invariably come up.

I remember an organization that worked with gambling addiction. A very noble cause indeed. Yet, they asked me to look into getting funding from the Trillium Foundation in Ontario. (This is a government-based charitable foundation that gives away millions of dollars annually. Many people don’t appreciate that it is totally funded by the proceeds from the Ontario Gaming Assosictaion — lotteries, races, casinos, etc.) There may be a disconnect with that nonprofit. Or, perhaps, there may not.

A Real Life Example

Sometimes corporations are looking to cleanse their reputation by making a philanthropic gift to a charity. As a matter of fact, I remember a horrible accident some twenty-plus years ago at a local movie theatre. A young man was on the second floor, and he fell down the open gallery to the first floor. He wound up in the ICU. The family sued the movie theatre owners, and part of the mediated settlement was a $25,000 donation to the charity of choice of the plaintiff. That happened to be the hospital where I was working. Was this a case of the corporation attempting to clean its image? I honestly don’t believe so — I think that it was just part of a mediated settlement.

I think that there is a vast difference between philanthropic support and sponsorship. These two different concepts come from two distinct areas of a corporation’s budget (executive decision versus marketing dollars). Sponsorship has some intrinsic benefit to it (it could be a naming opportunity, co-branding exercise, etc.) Philanthropic support has no real measurable added value to the corporation other than being a good corporate citizen.

As I had mentioned in last week’s post, I am unsure of all of the answers in this arena. But, I am sure that the nonprofits had better start thinking about this and reexamining (or creating) their gift acceptance policies if they are to have a standard course of action in the future.

Until next week.

L’chaim,

jack

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