Snapshot 2014 Rising Tide of Expectations Corporate Giving, Employee Engagement and Impact Advisory Group America’s Charities would like to thank the Advisory Group for providing insight, guidance and support for Snapshot 2014. However, opinions expressed in Snapshot 2014 are solely those of America’s Charities. Dottie Schindlinger Perla Ni Executive Vice President CEO BoardEffect GreatNonprofits Barbara Harman Debra Snider President and Editor Vice President Operations Catalogue for Philanthropy: GuideStar Greater Washington Kendall Joyner Joseph Mettimano Director, Programs and Practice Vice President, Marketing & Independent Sector Campaign Engagement Global Impact Richard Neustedter Partner Cynthia M. Adams Nonprofit Financial Specialists President and CEO GrantStation.com Acknowledgements Special thanks to the following individuals and companies for their involvement and assistance in the research and publication of Snapshot 2014. Stephen K. Greenhalgh Design: Senior Advisor Levine & Associates America’s Charities Washington DC Kudzai Mukumbi, Ph.D. Consultant Net Impact Projects for Good © 2014 America's Charities, Inc. Snapshot 2014 Rising Tide of Expectations Corporate Giving, Employee Engagement and Impact Table of Contents Advisory Group i Snapshot 2014: The Big Picture 4 Rising Tide of Corporate and Individual Expectations 6 Nonprofits and Companies Live in Parallel Universes 11 Engagement is the New Standard 14 Greatest Challenges in Building and 18 Sustaining Corporate-Nonprofit Relationships Summary 20 About America's Charities 21 Glossary of Terms Workplace Giving Overhead Myth Federation An employer-sponsored program The common misconception that A 501(c)(3) charitable organization giving employees an easy and the percentage of a charity’s that represents multiple charities efficient way to make tax-deductible expenses that go to administrative and acts on their behalf to gain donations to charities, usually via and fundraising costs—commonly access to and raise funds in public payroll contributions. referred to as “overhead”—is, on and private sector workplace giving its own, an appropriate metric to campaigns. Unrestricted Funds evaluate when assessing a char- Donations made available for a ity’s worthiness and efficiency. Throughout this report we use nonprofit that are not designated (from “The Overhead Myth, A the terms nonprofit, nonprofits, for a particular use. These funds GuideStar Initiative to Improve nonprofit organizations and charities give charities flexibility to use them Donor Choice”). interchangeably. For the purposes where they are needed most, such of Snapshot, they refer to the same as building their capacity to fulfill thing—a legally recognized 501(c)(3), their mission. mission driven organization. 2 Snapshot 2014 “ As we focus on the intersection of corporate giving, employee engagement and charitable impact, the rising tide of expectations is here. Corporations, employee donors and the public expect charities to demonstrate greater accountability, transparency, and evidence that their work is making a significant, measurable impact. Charities that can evolve in this age of the democratization of charitable information will be in the best position to thrive and succeed.” —Steve Delfin President and CEO, America's Charities Rising Tide of Expectations 3 Snapshot 2014: The Big Picture “ We want to make sure we are executing our workplace giving strategies at a really high level.” —Survey Participant The impact of employee giving in February 2013 of Snapshot 2013: About Snapshot 2014: campaigns on charitable organiza- Trends and Strategies to Engage • Nearly 240 nonprofit organizations tions and the people and communi- Employees in Greater Giving, a compre- provided insights into their practices ties they serve cannot be understated. hensive look at companies, their views of and corporate partnerships by partic- Workplace giving campaigns generate employee engagement, and trends and ipating in an online survey that is the over $4 billion annually—much of which best practices. basis for this report. is unrestricted, sustainable support that enables charitable organizations serve Snapshot 2013 provided insights into • Seventy two percent of respondents communities throughout the nation. how the digital culture is transforming have revenue under $3 million while the intersection of workplace giving the remaining 28% are charities with These organizations meet vital needs and employee engagement as well revenue greater than $3 million. as they deliver programs and services as changing expectations of a new ranging from arts and culture to educa- workforce. Interestingly, a subsequent • The respondents represent a broad tion and mentoring, to health awareness dialogue surfaced the question of range of more than 20 different and care, to food security and housing, whether nonprofits are experiencing types of charities. The top cate- to environment and sustainability, to this same transformation. gories include children and youth, civic and human rights, and more. health, education and training, At the same time, the “overhead myth” human services, arts and culture, Snapshot 2014: Rising Tide of discussion (see page 6) was gaining international, and environmental and Expectations—Corporate Giving, traction with its central focus on moving conservation. Employee Engagement and Impact, beyond administrative and fundraising surveyed charitable organizations costs as a measure of a charity’s perfor- The Snapshot series, published by to explore key trends shaping corpo- mance. America’s Charities decided America’s Charities, examines issues rate-nonprofit partnerships today and to explore these issues and contribute and trends at the intersection of corpo- the challenges and opportunities they to the ongoing dialogue around corpo- rate giving, employee engagement and face to maximize engagement in the rate giving, employee engagement, and charitable impact. future. The report follows the release charitable performance and impact. 4 Snapshot 2014 Snapshot 2014 Highlights Charities Face a Rising Tide of Expectations from Corporate and 1 Employee Donors There is a growing expectation held by companies and employees that charitable organizations must demonstrate greater accountability, transparency, and impact with measurable results. Digital Culture and a Networked World Are Transforming the Way Charitable 2 Organizations Operate As in the corporate world and society at large, technology, digital culture and interconnectedness are transforming how nonprofit organizations interact and engage with companies, employees and other stakeholders. Engagement is the New Standard Workplace giving is changing to embrace the broader aspects of employee engagement and provide greater opportunities for 3 employees to learn about, interact, and connect with charities. Nonprofit organizations are responding to this shift by changing the way they operate to better address the new expectations of corporate, institutional and individual donors. Developing and Maintaining Corporate Partnerships is Challenging for 4 Nonprofit Organizations Nonprofit organizations recognize the value and importance of engaging in strong partnerships with their corporate and institutional donors but indicate they face significant challenges in sustaining and capitalizing on these relationships. Rising Tide of Expectations 5 Rising Tide of Corporate and Individual Expectations In July 2013, the leaders of three of the sophisticated in their philanthropic deci- “The accelerating pace of country’s primary sources of charitable sion making, with a growing emphasis change is transforming information–GuideStar, Charity Navigator on effectiveness, accountability and and BBB Wise Giving Alliance–penned impact. With these changing expecta- charities, as they must an open letter to America’s donors chal- tions, charitable organizations are pres- meet the demands of rising lenging the “overhead ratio” as the primary sured to become more transparent and expectations. Corporate giving indicator of nonprofit performance. results-driven. and employee engagement Instead, they encouraged donors and other stakeholders “to pay attention to Almost 61% of survey nonprofit respon- are driving forces in this other factors of nonprofit performance: dents believe their corporate partners social impact equation.” transparency, governance, leadership and individual donors expect greater —Lynne D. Filderman and results.” (See “Letter to Donors of accountability around impact and Vice President & Chief Marketing Officer America” at www.overheadmyth.com.) results measurement. America's Charities Snapshot 2014 explored how charities Almost 68% of the survey respondents are experiencing these new and revealed that the digital culture is driving changing expectations for greater the demand to demonstrate impact, accountability and transparency, partic- and 68% also believe that operating ularly from their corporate partners. in a digital culture requires them to be more transparent with donors and Nonprofits Respond to stakeholders. Demands for Greater Accountability In fact, more and more nonprofit orga- nizations are changing their practices Individual, corporate and institutional to demonstrate their commitment to donors are becoming increasingly address these rising expectations. This 61% 68% 68% Nonprofit respondents who believe Survey respondents who Survey respondents who believe their corporate partners and revealed that the digital that operating in a digital individual donors expect greater