The traditional way for a wealthy corporation to engage in philanthropic activity has been to write a check to a charity and then walk away. The non-profit organization then takes the money and works its program.
A new trend has emerged, however. It’s called collaborative philanthropy. Collaborative philanthropy is when a for-profit business donates a chunk of money to a non-profit and then sticks around to offer hands-on help. This enables a charity to act more like a results-driven business model.
This is not to suggest that charity organizations are necessarily inferior to businesses and corporations. Groups like Feeding America, Habitat for Humanity, the United Way, Lutheran Services, YMCA, Salvation Army, Catholic Social Services, and thousands of others do fantastic work every day.
However, even these well-managed outfits can benefit significantly from the skill sets mastered by for-profit businesses. What non-profits lack in key operational areas can be applied to serving their target groups more effectively.
For example, OSI Group based in Chicago is among the largest meat and food processing companies in the world. It is ranked No. 58 on the Forbes list of largest privately owned firms. It donates hundreds of thousands of pounds of food every year to Feeding America, the non-profit that serves food banks across the nation.
Because OSI Group has mastered the art of supply chain management, cold logistics, distribution and warehousing, it can help an organization like Feeding America because it must implement all of those same processes as it distributes tons of food daily to millions of food-insecure families.
Furthermore, charities generally welcome the additional help. They think of it as getting a highly paid consultant to work for them for free. Distribution experts, supply chain managers, processing engineers, and others who donate their skills and expertise to a charity is a boon as valuable as cash. When for-profit entities contribute expertise and employee hours, it’s called an “in-kind donation.” The IRS views this as the same as cash giving in terms of writing it off on taxes.
The benefits of collaborative philanthropy are many for corporations. They can get increased tax breaks, improve employee engagement and morale, extend their customer loyalty, bolster brand recognition, and increase their reach into new markets.