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KEY LESSONS
For Grantmakers in Private and Community Foundations:
- Be prepared to think differently about how business can advance your philanthropic purposes. The dividing line between nonprofit and for-profit work has blurred as the role of government in society has diminished, the role of business has become more pervasive, and a small but significant part of the business community has begun to accept greater responsibility for the wellbeing of society as a whole. In this environment, there are ways to harness market forces to advance your grantmaking objectives that did not exist – or did not seem proper – just a few years ago. You may greatly increase your chances for success by challenging yourself to explore opportunities in this unfamiliar terrain.
- Consider various ways in which companies and business organizations can become involved. On the simplest level, some businesses and corporate foundations may be willing to make grants (or enlarge their current grants) in cooperation with other funders. There may also be times when they would like to work on something directly in partnership with a foundation or a nonprofit grantee. They may even want to be part of a social-change effort that seeks to reform the way business is done in their industry. "Businesses consist of people who are also citizens, with human interests and social concerns like everyone else," says a grantmaker in an independent foundation. "You never know what level of interest you may find among business people until you start poking around."
- You may need to persuade colleagues in your own organization that working with business is a good idea. Linking for-profit and nonprofit interests may strike some foundation employees as improper, or legally risky, or even just pointless. Not all these concerns are unreasonable, but some of them may be exaggerated or based on poor information. It probably won’t be enough simply to explain how a partnership with business would advance your program goals. You may also need to explore less explicit forms of resistance - like political anxieties, philosophical misgivings, or distrust of corporate motives.
For Grantmakers and others in the Corporate Sector:
- Look for opportunities to link philanthropy with your company's goals in ways that benefit both. There need not be a stone wall between your charitable aims and your company's business. Philanthropy should not be subservient to the profit-making interests of the company, but it can make use of the company’s skills, its relationships with industry and the community, and the particular interests of its personnel. Philanthropy can benefit the company by building a stronger community, improving relationships between the business and its neighbors, and offering employees a chance to take a role in civic affairs.
- Try to involve executives and employees in issues that are meaningful to them. To make corporate philanthropy better understood and more widely supported in the company, it helps to start with a few managers who are personally interested in a philanthropic issue and who might gradually bring others along. Then work with them to design and execute a project that will show how your grantmaking can serve both charitable and business goals.
- Assessing results should include both sets of goals. Even with imperfect tools, assessing the outcomes of grants - both their social benefits and their economic usefulness to the company - may be important for maintaining continued support. Still, grantmakers caution that colleagues should not expect to see measures of "return on investment" in philanthropy that are as clear-cut as in business. Among other things, philanthropy's achievements can't always be measured in dollars earned or units of input and output.
For People Working in Either Sector:
- The first challenge is to make connections and create opportunities for discussion. It can take time, grantmakers advise, for trust and frankness to develop between nonprofit and for-profit organizations, even when they are interested in similar goals. Sometimes, the most useful first step is just to bring the two sides together and explore common work and interests.
- Anticipate and work with the cultural differences between the for-profit and nonprofit sectors. Businesses and philanthropic organizations have different cultures, different vocabularies and backgrounds, and different ways of analyzing problems and organizing solutions. Those differences can sometimes give the impression that the two sides have unbridgeable philosophical disagreements, but many observers counsel against leaping to that conclusion. Pragmatism and open-mindedness work best in dealing with the differences. Grantmakers from both sectors recommend being aware of your own cultural biases, acknowledging the legitimacy of the other side, and focusing on common objectives.
- Be patient, and take notes. Projects that involve working across the for-profit / nonprofit divide can take a long time to achieve success. For many nonprofit grantees, learning to work with business involves developing new skills, changing established ways of doing things, and even learning a new language. Because this is still new terrain, and the process of working together is not well understood, it can be helpful to keep a running diary while joint efforts are unfolding, both to help the participants reflect on what they've done together and to help others learn from their experience.
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