An Insider CEO's Guide to Finding the Right Philanthropic Match
It's pitch season for nonprofits. Here's what to listen for.
You might be invited to one of these lunches in the coming weeks, as charities are making their year-end fund-raising push. The CEOs will have his (or her) spiel down pat. He’s polished. He even has a dollar figure in mind that he’d like to see you contribute. But eventually he’ll stop talking, and then it’s your turn to ask the questions. What you ask can help you determine the best use of your philanthropic dollar.
Here are the first three questions every courted donor should ask during The Lunch:
1. How are you financed?
Where does the money come from, and where does it go? Listen carefully to the answer. If the CEO tells you that they get most of their money from government contracts but they want to expand their private funding, don’t let the topic end there. Ask these follow-up questions: How does government rate them as a vendor? Has the government continuously expanded its contracts with you? Have they offered you new ones? Have they asked you to take on failed contractors’ contracts, or not? If the government is hesitant to invest more in the nonprofit, this will be a red flag to you as well.
If the money comes mostly from private donors, ask who those donors are. Are they names you're comfortable with being associated with on promotional literature? If you're looking to make a large donation, is there room for you to gain prominence as a donor, or is the organization specifically beholden to certain corporations or foundations?
2. What's your nonprofit ranking?
CharityNavigator.com provides independent ratings of thousands of charities based on analysis of financial documents. Ask also about similar reports from Guide Star and the Better Business Bureau. If they’re not registered with these organizations, ask why. If the ratings are poor, ask for an explanation. If they’re very good, ask what the organization is doing to maintain that level of quality.
3. What do you want to use my money for?
If the charity provides social services and has government contracts, what you want to hear is, “We need private money in order to be innovative, to try new and different things, and to experiment.” If he wants to use your money for workforce development, that's a good thing. Employees in the nonprofit sector are notoriously unpaid and overworked, and there are too few staff to handle the volume.
These first three questions cover the nitty gritty of finances and corporate integrity.
Next, we’re going to go a little deeper and find out whether the organization, its mission, and its CEO are a good match for your company’s philanthropic goals.
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