Despite comprising a mere 2% of any company’s annual budget, CSR funding exerts an inordinate amount of influence on NGOs. Every effort is made by them to develop partnerships with big corporations in the hope of catching tiny morsels from meagre donation pots which are meant to spread around as widely as possible for marketing reach.
Among others, nonprofits woo CSR funding by hiring ex-corporates, offering good ROI and touting AI adoption to boost their chances. And yet few (if any) of them can boast of getting CSR funds in excess of 10% of their total annual income.
It’s not only because most NGOs live hand-to-mouth and tend to be underfunded even in the best of times, but also because CSR is seen as a good source of unrestricted income. Along with multiyear grants, having funds to put aside as savings or for reallocation has become a gold standard in fundraising. While the amounts they give may be small, few corporate donors bother to ask for stringent reports after releasing the funds, much less validate their actual impact on the intended beneficiaries.
Initiating and nurturing relations with corporates is a painstaking process that takes up much of a nonprofit’s time and effort. CEOs and fundraisers have to attend company events to fish for the right connection, and then set up an initial meeting with their “catch” (usually the head of CSR) to convince her/him to pick their nonprofit as one of the main partners for their sustainability/global citizenship programs. CSR heads tend to be cautious at first and would try out the lowest tier of engagement, which is encouraging their staff to volunteer their time or pro bono expertise to a prospective NGO partner.
If mutual trust is built, the expectant nonprofit may ask for CSR funds the following year, or request for a referral to their new partner’s corporate foundation where the real goodies are stored. Depending on the mission match, ROI and the crafting of concept note or grant proposal, the corporate partner may agree to give an NGO some of their CSR funds for that year. That’s two years of partnership effort for an underwhelming amount that hardly pays for one month of a staff-member’s salary. To compensate, many nonprofits do this on a rolling basis and at scale, but only after building a fundraising team of three people composed of a grant writer, a partnership officer and a development manager, which carries the twin risks of a swollen annual budget and the rapid depletion of reserves if they fail to meet their KPIs.
This may sound like a Catch-22, but the whole point is to not to prioritize CSR funding over more substantial sources of income like foundations, HNWIs, government, and community organizations (churches, schools, civic clubs, etc.). CSR funding is not genuine charity – it would be funny to expect that from big business; rather it is a cynical conduit for marketing and tax reduction that does not care less about “people and planet” as long as they reap super-profits. If you want your NGO to be used in that manner by corporates, at least make sure you get substantial donations, just to even the score.