This is a transcript of the Third Sector Podcast episode: Corporate partnerships for small charities
Lucinda Rouse: Hello and welcome to the Third Sector Podcast. I’m Lucinda Rouse, senior multimedia reporter
Emily Burt: And I’m Emily Burt, editor of Third Sector, the UK’s leading title for the voluntary and not-for-profit sector. This week we’re going to be looking at how small charities can get the most out of their corporate partnerships.
Lucinda: And later we’ll be joined by the author of a recent Third Sector opinion piece on the forthcoming closure of the Lankelly Chase Foundation.
But first, Emily, you’re back!
Emily: I’m back. I’m back in the seat. I’m feeling very, very rusty, but let’s see what happens. It is brilliant to be back on the mic, and exciting to be on the mic for the first time with you, Lucinda.
Lucinda: Yes. I think a lot has changed within the Third Sector team since you left us for your maternity leave in September.
Emily: Yeah, it’s been a whirlwind. I was talking about it earlier with yourself and Andy and I was saying Liz Truss was the prime minister when I was last in this chair. So that I think if nothing else is a sign of how much has been going on since we were last on mic together.
Lucinda: Indeed. Well, it’s wonderful to be sitting here with you and wonderful, I’m sure, for our listeners to have you back. And yes, looking forward to the months ahead and digging back into the sector news.
Emily: Absolutely. There’s never a quiet moment is there.
Lucinda: This week we’ll be looking mainly at corporate partnerships and how smaller charities in particular can broker fruitful ones in the face of competition from their bigger and better known counterparts.
Joining us for the discussion is Graeme Marsh, head of the McCarthy Stone Foundation. Graeme is a corporate philanthropy specialist with a background in community engagement, fundraising and charity operations, among other things.
Hello Graeme. Thank you very much for joining us.
Emily: Hi, Graeme.
Graeme Marsh: Hello. Good morning. Good morning both. It’s fabulous to be here.
Lucinda: Fabulous to have you. So let’s start with the topic of corporate foundations, given that you run one. What is the attraction of these foundations to companies as opposed to more traditional corporate partnerships?
Graeme: Well, I think that we’ve seen quite a shift in recent years with a growth in corporate foundations, particularly in the PLCs, where there’s definitely been a shift away from traditional philanthropic giving that has always had quite a strong reputational drive to it. So a lot of it has been about finding a good charity partner and these quite traditional charity relationships between a corporate and a charity of the year and that kind of thing.
And I think over the past few years, particularly the past two or three years, we’ve seen a growth in corporate foundations as the companies behind them have sought to get a bit closer to their charitable giving and have a bit more direct input on what they’re doing and how they’re doing it.
I think there’s a drive to understand that consumers are very conscious of what businesses are doing ethically and sustainability-wise, and there’s definitely a lack of knowledge around that and I think that many companies probably feel like they don’t get the credit for their charitable work when they’re working with a charity partner as when a foundation with their name on it is in existence.
And then there’s also been a drive to align more social purpose within businesses. So partly as a move away from what used to be called corporate social responsibility, which always sort of implied that it was something that they had to do to offset the negatives of their business and moving towards an ESG agenda of environmental, social, governance which is more about businesses making a commitment to support the community and the environment that they operate in, and to do so with really good levels of governance.
And of course, a foundation in the UK brings a high level of governance. It brings charitable registration and the various responsibilities and regulations that accompany that. So it adds, I think, a higher level of credibility and helps avoid companies being accused of charity-washing or greenwashing so much.
So I think that’s where we’re at. And I personally believe it’s hugely positive, but it’s a very complex area and they’re all very, very different in how they approach it.
Emily: Absolutely. And we’re definitely, I think, in a place where we are seeing large corporations, organisations becoming more and more concerned with how they shape themselves as for-good outfits. And you see the rise of things like B corps and such, which do crowd into that charity space.
But as you were saying, the corporate and charity partnerships, they’re a very well-established arm of the sector. It’s something that has been going on for many, many years.
But in a sector where the vast majority of charities are small organisations, they’re micro organisations, I’d be interested to know why you think they can so often be overlooked by corporate organisations when it comes to partnering in favour of those big household names like say, Cancer Research UK. How can they compete in this area?
Graeme: Well, it’s a challenge isn’t it. It’s very difficult and one of the challenges that businesses have is translating these desires to do good into actions. And the research suggests this is a problem for businesses.
And actually it’s where charities have a competitive edge in that sense, because they can deploy this social work. A lot of businesses want to do this for-good work, but they don’t really have the tools to do it. They don’t have the expertise, the networks, the contacts, etc.
And that is where the bigger charities bring an advantage over the smaller ones because they do have that level of infrastructure and expertise. Certainly with earned opportunities and having commercial relationships with the private sector, which I feel is a burgeoning area for a lot of charities to move into and positioning themselves almost like an expert consultancy is a real potential opportunity for many of these charities.
But there remains always a reputational element, and to some extent it depends who steers this within the business. Unsurprisingly, if a business is having their charitable work steered by a person who’s got a lens of marketing and reputation and PR and communications, they’re going to be quite keen to align their business with a charity brand where that reflects that.
And that obviously bodes quite well for strong brands that have that level of public recognition: the likes of Macmillan or the Prince’s Trust and organisations like that. This could be very difficult for small charities because they simply can’t offer that. And I think that the challenge for them is going to be to cut their cloth appropriately and to approach the right companies where they can offer something. And I think that’s going to be more on a community level.
It’s going to be more on a local level. And it’s going to be either where there’s strong synergy between the company’s social agenda or local community purpose or there’s an actual personal patriarchal if you like, or matriarchal, person at the organisation who has a strong commitment and tie to it, often on a personal level, and can operate more autonomously. They’re not subjected to perhaps the whims of a corporate board and having to think about what the shareholders will approve and all that kind of stuff.
So cutting the cloth to suit is probably the big challenge.
Emily: I think since the pandemic, something that I’d certainly seen as well is there was quite a shift in terms of people making individual donations to organisations, because our worlds all became so much smaller during Covid-19. We were at home, everything became hyper-local.
And something that I saw and heard from just talking to people across the sector is that a lot of people were thinking, well, actually, these great big multimillion-pound charities get so much money. I want to actually see where my contributions, where my donations are going to make a real difference.
So there was a pivot almost towards funding, say, your local hospice or your animal shelter, rather than making your donation to the RSPCA. Because you were very close to that community and to that cause, because it was local, it was small, it was specialist.
But also people would say they could really see the difference that their contributions made there. So maybe there is something in that for small charities to also take to corporates to say, look, this can be incredibly specialist. It can be really meaningful, and you will come with us on this journey every step.
Graeme: Yeah, I think so. The reality is that to get in the door now with some of these big corporate charity brands, you need to be able to promise them quite large returns. They’re a lot more savvy about protecting the charity’s brand than perhaps they might have been in the past.
And they realise that the brand is a real asset for them. So I think for the smaller organisations, it’s quite hard for them to deliver on what the big charities want in terms of if they’re going to allocate resource: corporate partnerships officers or managers to these partnerships. They need to be sure they’re going to generate the income.
Smaller charities, it will typically be the CEO who, amongst the many other hats they wear, they wear the corporate partnerships hat. And I think that that local community element is really, really important. I think that one of the things as a corporate foundation is I often say that we’re not so much corporate giving as we are community fundraising.
We have a community of employees, a community of supply chain partners and a community of customers that we fundraise through. And our fundraising looks much more community-style than it does, if you like, corporate-style. And obviously we then work with the group separately to negotiate and support their broader business aims and funding through them.
So I think there are opportunities, huge opportunities locally. One of the other challenges is that privately owned businesses don’t have the same level of public transparency, scrutiny, and accountability that PLCs will have. And so, perhaps there is not as much pressure on them to deliver on their sustainability work, on their ESG work. And they’re not perhaps proactively looking for organisations to work with, either on a charity basis or as I said, commercially, to deliver on, you know, perhaps they might have agendas around biodiversity as we have, for example, at McCarthy Stone.
And we’ll work with experts in that and often those experts will come from the charity sector in order for us to ensure that we’re meeting, in fact exceeding, the legislative requirements for that. So I think that the drive to give locally has always been there. We have those societal problems or big society challenges that corporates want to take apart in trying to help solve.
And often I’ve found that the ambitions of corporates can sometimes exceed the actual scope of the challenge because it’s so huge. You know, curing cancer, dealing with homelessness or social justice issues. So corporates have to do the same. They have to work in a way that is appropriate and proportionate to what they’re able to give.
And I think that’s why we see the big corporates, the big foundations taking on these big societal challenges and the smaller ones, if you like, like us, we’re working to support at a local grassroots community level.
Lucinda: And what about ways in which the charity can help the company to achieve its own corporate aims. It doesn’t need to be completely separate, does it? Do you have any good examples of ways that charities have helped companies?
Graeme: Yeah, I think there’s two streams to that. The first one is looking at where there are charities that have a commercial expertise or skill and where they’re able to sell into a company a product, or a commercial earned income. Where they’re furthering their charitable activities, but they’re actually selling something, selling a service into a corporate. And that might be consulting with a corporate on environmental impact, or rewilding or conservation.
Or it’s something to do with wellbeing in some sense, mental health, for example. So charities that are selling mental health services into companies. We know that workplace wellbeing has become much more important to businesses and they’re recognising the value of it in terms of engaging their employees and being able to offer their employees a high level of wellbeing support.
So these are all commercial opportunities, earned income opportunities. And then in terms of the unearned income, the donations, what we do see more and more now is corporate foundations particularly that are becoming strategically closer aligned to their corporate parents, where they’re working to support the overall purpose of the business.
So that might be, for example, Shell Foundation. It’s a huge foundation. A lot of their work is connected to renewable energy. Us as a foundation, McCarthy Stone, we focus our foundation’s work on supporting older people to be connected and engaged in the community.
We talk about the same values and the same principles commercially with our customers. We want to see those same benefits and those same values applied to the wider community. So we want people to feel like they’re part of a community. We want them to be able to engage with other older people. We want where they live to be a place where they can get older, healthier and happier.
Emily: So just going off that, I think it sounds as though one of the most important things that any charity can do that’s trying to look for a corporate partnership that’s going to be genuinely meaningful and not just, as you say, taking the big cheque and having the handshake once a year, or having some people come down on a volunteering day to paint a wall in your office or similar.
It sounds like the starting point for that is to be actually quite choosy about the organisations that you are looking to partner with and thinking really strategically about how do we align value-wise with them? Where is that common ground and how can we actually make that work as hard as we possibly can?
Do you have any further bits of practical advice about how to start from the go with making that a genuinely meaningful partnership?
Graeme: Yes. I must admit, I think that getting a group of volunteers from a company to come and paint a wall or something, I actually think that could be really beneficial.
Emily: Sure, nothing wrong with it.
Graeme: But people are quite critical of it. And I’ve seen on several occasions the level of engagement this gives in terms of the conversations that happen afterwards, the awareness levels it builds where people realise what’s going on in their community.
They maybe don’t see these organisations’ work up close and it gives them that opportunity. And often they go on and fundraise for them. So I’m quite a big advocate of it.
Lucinda: Even if it’s highly tokenistic?
Graeme: Well, I think the key is, let’s not call it what it isn’t. So I don’t like it being talked about perhaps in the same way that we might talk about other volunteering, because if employees are being paid to be there, then technically is it volunteering? Possibly not.
And I think that there is an earned income opportunity there for charities where they can actually say, look, if what businesses want is team-building and we’re going to package this up and deliver it as a service, then let’s sell it as that.
Without getting too much into the accounting and financials of it, I think if you’re charging people to volunteer, that’s not volunteering either. And actually what you’re doing is you’re furthering your charitable activities by providing a paid experience to come in and do an activity. So we should call that what it is. And then I think that you remove the tokenistic element from it.
My own experience, I’ll be honest, is that within the companies, the people who do it genuinely, really do want to make a difference and want to help. You can understand why they perhaps don’t want to do their day job. If they work in finance, they perhaps don’t want to go and spend a day doing finance for their volunteering. And they want to get out and do something different.
And it can be at times, I think, frustrating for charities. And I think that you need to be quite empathetic and you need to understand the charities that you’re dealing with and make sure that what you’re asking them is really reasonable.
If I went to my finance team at work and said I’ve got 15 charity volunteers who want to come and do a day with our business, we could never do it. We couldn’t deliver it, and we’re a big corporate. We couldn’t just bring in people on spec.
But I have seen it have a real impact and a real value, and what we’ve seen over the three years that we’ve been running employer-supported volunteering formally is a progressive increase in the amount of volunteering that’s being done.
And also a local engagement between the people who’ve volunteered and gone and seen the charities and then stayed on with them to fundraise, to get involved, to look at where they can add extra value, even to the point of sharing posts on LinkedIn and social media about that charity’s work and promoting them.
So I am hugely supportive of it. I do believe it gets a bit of a bad rap, generally speaking, and I think that the more that we try to engage people in the sector’s work, the better, however we choose to do that.
Lucinda: Thinking specifically about small charities here and the type of partnership that is realistic, you mentioned that often the corporate partner counterpart in the charity is going to be the CEO. There isn’t going to be a dedicated team as other, larger charities have.
When you’re thinking about the different functions and roles and skillsets that are required, how can a charity with limited human resources make sure that the partnership is delivered as effectively as possible and that, for example, internal communications are managed in the right way?
Graeme: I think one of the challenges at the higher levels, with the big companies, is cascading the work and the impact and the benefits down to the staff who do a lot of the fundraising. We see across our business a tremendous amount of support from the grassroots of the organisation. Often the people who are out on the ground, right across the board.
But there is a tendency sometimes with the big charity partnerships for the CEOs to talk to each other and maybe a senior leader in the business will talk to contact at the charity. Getting that information to the grassroots, to the people who are raising the money, I think is the big challenge.
It’s getting easier now because of the accessibility of digital tech. It’s so much easier now to record a video on your phone. You don’t need a proper camera. You can produce something that you can share quite quickly and easily.
And so I think that small charities can access those tools and should use them a lot to get the message across.
Lucinda: What’s your view on the outlook for corporate partnerships going forward?
Graeme: I don’t want to sound like a broken record, like people do a bit in the sector about, you know, it’s tough times, it’s all this, that, and the other.
The reality is that if you look at the top 100 companies, their income has grown, their profits have grown, but their charitable giving has not. Why is that? They don’t up their giving in line with their profits. It does go sometimes in cycles. And right now, I think if you want to work with corporates, you’ve got to look at what the societal hot buttons right now really are.
If you’re a climate change, environmental-type charity, I think this is probably a good time for you. If you work with veterans, I think it’s probably a bad time for you. If you’re doing work in conservation areas or dealing with the results of, whether or not you support it, whether or not you agree with it, the fact of the matter is that companies are becoming more climate conscious. They’re becoming more conscious on their carbon emissions. Where charities have got opportunities to work with that.
And looking at younger people, the millennials, generation Z. They’re really conscious of joining companies that have agendas that align with their values. And there’s great opportunities for charities there. We hear a lot from our staff across the board about how they feel proud to work for a company that’s got a foundation.
But there’s no doubt we’re not seeing the uplift in charitable giving in the corporate sector that we would perhaps like to see. The amount of them that are giving as a percentage of pre-tax profits has dropped from about 2.4 per cent pre-tax profits down to 0.8 per cent as the average on the FTSE 100. So we’re seeing a real time drop in donations and it’s a substantial amount of money across that board.
Lucinda: Which makes ensuring that your partnership with the company is worthwhile, all the more important.
Emily: Long term and meaningful.
Lucinda: Well, Graeme Marsh from the McCarthy Stone Foundation, some really fascinating points there. Thank you so much for joining us.
Emily: Great to have you on. Thank you.
On now to a piece of sector news, which relates to the closure of the Lankelly Chase Foundation, which was announced earlier this month. The 60-year-old charitable foundation recently said it was going to dismantle and close itself and divvy out its £134m endowment fund among other organisations.
Lankelly Chase said that it had become unable to recognise its work with the traditional philanthropy model that was entangled with colonial capitalism, meaning it was continuing the harm of the past into the present.
Joining us to talk about this is Richard Garside, who is the director at the Centre for Crime and Justice Studies and who wrote an opinion piece for Third Sector about this soon after the announcement.
Hi Richard. It’s great to have you with us.
Richard Garside: Hi. Thanks for inviting me on.
Emily: So could you just tell us a bit about why the announcement of this closure concerns you?
Richard: In your introduction you mentioned Lankelly Chase had talked about their association with, I think they phrased it in their statement, the ongoing processes of colonial appropriation and exploitation, and they therefore felt no longer able to reconcile this as an owner and active accumulator of private financial capital.
Now in one sense this is a dilemma for anybody who wants to use money that’s been generated through one set of processes to deploy it for good in another sector and in another context. And so one would assume that when Lankelly Chase do close down and they pass on their wealth to other organisations, these other organisations will have exactly the same dilemma.
And the implication of what Lankelly Chase is saying is they say, well, this is a decision for us alone. We’ve made this decision. But I think the logic of their position is that other charitable foundations should do the same thing. And again, if everybody did the same thing, then it would have a huge implication on all sorts of organisations that rely on charitable donations from trusts and foundations.
And indeed, the Lankelly Chase Foundation decision will clearly have an implication for a number of their current and potential future grantees who will no longer be able to rely on that source of funding and support.
Lucinda: But there is also the argument, which they seem to be pushing, that there are other organisations that are better suited to the social structures of today, and the Baobab Foundation is one that has received an initial £8m, or is going to receive it soon.
Do you not buy that argument, or do you think that these problems are going to be applicable regardless of their setup and structure?
Richard: I think they will be applicable regardless of the setup and structure, because you can have the most inclusive, democratic structure going. But if you can trace back the origins of your wealth, let’s say to the plantations in the Caribbean, or the exploitation of workers in Chinese factories, whatever it is, then you can’t, as it were, remove that stain.
And that indeed is part of the Lankelly Chase Foundation argument that the money is somehow inherently dirty. Well, money is inherently dirty. And in one sense it’s just a question of how much dirt are you prepared to put up with.
But more importantly, how do you choose then to deploy that wealth in a way that you feel is true to your principles and values. Now, Lankelly Chase Foundation have gone on quite an interesting journey over several years and have actually, I think, been at the lead of trying different forms of decision-making about wealth and how it can be used in a way which I think is quite inclusive and quite challenging.
And it just seems to me a missed opportunity for them not to just have continued that journey and to become a genuine leader in the sector, rather than choose effectively to close down and hope that whoever are the future custodians of their wealth will do a good job on it. They may not. The wealth may just end up being reduced and degenerate over time and maybe in 20 years time there’s not much to show for it. And that is one of my concerns.
Emily: Yeah, and I think they said in their statement that they are alive to these worries as well, and this is why they’re going to be taking the next five years to go through this process. They’re not just going to be releasing hundreds of millions of pounds tomorrow. So there I’m sure will be negotiation and discussion of these challenges.
But I think one of the great opportunities and one of the really radical things that we are seeing here is that by working with organisations like the Baobab Foundation, it’s also about the release of power, which is a very common problem in the charity sector. And there have been conversations going on for many, many years about who holds power within the charity sector and the fact that most large funders in the country are predominantly white-led and that most of the people who receive funding in this country, those grassroots organisations of which you know most, BAME-led charities are grassroots. They’re micro. They’re very close to their communities, have missed out on funding traditionally through these models.
So I totally appreciate the challenges of it, but I think there’s also a great window of opportunity to explore those new means of funding and looking at that exchange of power in the sector.
Of course, money is a problem, but I think it’s also about looking at those traditional models. And I absolutely see your point about the fact that other funders might then feel compelled to go on and follow this model. We’re going to have to see how it plays out. Whatever happens, it is going to be interesting and I think there’s opportunity here as well as those major challenges.
Richard: Without a doubt. And I think that Lankelly Chase have led over a number of years with trying to develop more inclusive and collaborative forms, both of funding decisions and funding collaboration. And I think that’s a great credit to them. And I just think it’s a great shame that learning over time risks being lost and ultimately there may not be much to show for it.
There’s absolutely a problem within the trusts and charitable foundation sector, and it’s a class issue as much as anything I think, of often very rich people, frankly, often with not much understanding of the organisations that they are funding and supporting and the staff doing their best to try to close that gap.
That’s broadly speaking, a fairly easy problem to solve. You can invest in improving the diversity of your board. You can invest in improving the diversity of your staff. You can invest in different collaborative, more democratic decision-making over how charitable funds can be dispersed.
One of my concerns about the decision that Lankelly Chase made, and they were very clear about this, they said this decision was taken by our trustees. They were the only ones who made this decision. And it’s a decision that will have reverberations over a number of years.
So I think there was an opportunity missed there in not having a more collaborative decision about the future of the foundation rather than it being left in rather conventional terms to a few trustees, the majority of whom have only had an involvement in the organisation for a couple of years.
And this is the other thing to bear in mind. Lankelly Chase has been around for 60 years in different forms, and the organisations that they will be passing the money on to are, some of them are likely to be very new organisations.
And Lankelly Chase have also said that they recognise that a grant funding model for this is not going to be right for all organisations that receive the money. So over time I think the risk is you will see a fragmentation of that significant amount of capital which can be used for social benefit across a number of organisations often who may have the best of intentions and be very admirable, but with a very slight track record of operation. And operating in different ways in a way that could over time make it much more difficult for organisations who really need that funding to be able to access it.
Lucinda: Well, Richard, thank you very much for your thoughts.
Richard: Thank you very much for having me on. It’s been a pleasure.
Lucinda: That’s it for this week. Next week we will be returning to our environmental mini-series, hearing from the Environmental Funders Network about how funders can support charities seeking to respond to the climate crisis.
Emily: It’s been lovely to have you join us today, and just a quick reminder that if you really love the Third Sector Podcast, if you want to go back and revisit any of the points we’ve talked about today, or in previous weeks, you can read our transcripts now alongside listening to the episodes.
And if you want to tell us how much you enjoy the show or throw some constructive feedback our way, you can also fill in our listener survey. We’ll include that in the show notes.
Lucinda: So for now, we’d just like to say thank you to our guests, Graeme Marsh and Richard Garside, and our producer Nav Pal.
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