The NonProfit Times - The Leading Business Publication For Nonprofit Management

Getting corporate donors twice-basis deductions

For-profit corporations often make charitable gifts from their inventory, with certain tax benefits.
In his book Nonprofit Law Made Easy, Bruce R. Hopkins offers the reminder that the deduction for such a gift cannot exceed an amount equal to the donor’s cost basis in the donated property.

Under certain circumstances, however, corporate donors can receive a greater charitable gift deduction, in which the deduction can be equal to cost basis plus one-half of the appreciated value of the property.

This is called a twice-basis deduction, and five requirements are necessary for it to be available:

The donated property must be used by the charitable donee for a related use.
The donated property must be used solely for the care of the ill, the needy or infants.
The property may not be transferred by the donee in exchange for money, property or services.
The donor must receive a written statement from the donee representing that the use and disposition of the donated property will be in conformance with these rules.
Where the donated property is subject to regulation under the U.S. Food, Drug, and Cosmetic Act, the property must fully satisfy the Act’s requirements on the date of transfer and for the previous 180 days.

The new corporate philanthropy model

There is continued debate regarding whether for-profit organizations have any obligation other than making money for shareholders -- whether they have any social responsibility.

For nonprofits, however, there is no debate, social responsibility is what most of them are about. And, very often nonprofits seek to engage for-profit companies in their missions.

At a recent philanthropy conference, Sondra Lintelmann-Dellaripa and Robert Nolan of the corporate relations office of Connecticut Children’s Medical Center, made it clear that nonprofits can utilize a new corporate philanthropy model that maximizes incoming money while helping for-profits enhance their commitment to philanthropy.

Under the old nonprofit model, the focus was on the nonprofit and its mission and the tax benefit to the company, with little idea of the business of business.

Corporate social responsibility then centers around several key components:

It embraces to main concepts not found in traditional strategic philanthropy: accountability and transparency.
It is the alignment of business operations with social values.
It recognizes that many of the changes a corporation implements in conducting its social responsibility strategy are internal changes in operations, products and materials.
It consists of integrating the interests of stakeholders -- all those affected by the organization’s conduct -- into the organization’s business policies and actions.
Its goal is to positively impact society while achieving business success.

Cause marketing has multiple elements

Planning for a cause-related marketing (CRM) program or campaign is not unlike planning for any other type of communications effort, according to Stephen Adler, author of “Cause For Concern: Results-Oriented Cause Marketing.”

There are seven elements to consider as you plan a CRM campaign. Though you may not use all seven for each program, Adler said you will think strategically about the relationship and give the cooperative effort the best chance for success:

Identify the Right Partner: Due diligence is the most important step in vetting the right organization.
Build the Relationship at the Top: Generally, the higher up your relationship goes, the better the resulting campaign.
Do Something Unique and Sustainable, Creating Reach and Revenue for Your Brand: The uniqueness of a program comes from the one-of-a-kind blend of two distinct and separate brands, the company’s and the nonprofit’s.
Pool Resources and Be Consistent in Your Approach: If you can imagine a collaborative message that you both promote through all your respective channels, you’ll have a better chance of creating awareness, recognition and action in light of the enormous number of messages every person receives on a daily basis.
Watch Out for Your Partner, Be a Good Co-Brand Ally: Both sides should regularly remind themselves that their partner has the same concerns they do for their image, message delivery and return on investment. Regular reminders will help ensure development of a healthy relationship that doesn’t hurt either brand. Most potential pitfalls can be avoided by establishing basic ground rules at the start of discussions.
Be Ready for Marketplace Changes: When a good thing becomes too good for one side of a relationship, that side needs to look for a new component or strategy that can propel them when the other side takes notice and wants or needs to change with the times.
Help Your Partner Expand the Relationship: Opening doors for your partner can help, whether it’s increased visibility and revenue or credibility and interaction with consumers.

UNDERWRITING YOUR EVENT

Sponsorship can be a huge help to any organization, whether for the long term or for a specific fundraising event. Several tips were offered at a recent conference about how to get the most out of an underwriting effort.

Before you commit to hosting an event, seek sponsorship from area businesses and prominent individuals.
Make a list of what needs underwriting and what each item costs.
If you plan to hold an underwriting party, send the underwriting “wish list” along with the invitations.
At the party, thank each sponsor who has already pledged support. Distribute a list of what remains to be underwritten.
If possible, get a media sponsor newspaper, magazine, radio or television.
Be prepared to tell potential sponsors what they will get in return for their support media advertising, a banner or booth at the event, the corporate name on publicity, etc.
Immediately after the event, send each sponsor a thank-you letter. Tell them how many people attended the event and send copies of posters, ads, photos or banners and a rundown on how many times commercials or PSAs were played.
For events aimed at crowds of 2,500 or more, consider seeking underwriting from national companies.
Consider other sources of underwriting. Seek out restaurants or food stores to donate a percentage of sales.
Be aware that in your eagerness to raise money you may fail to recognize conflicts of interest. If you involve sponsors who could be seen in conflict, do so in a less public way.

Consumers are increasingly conscious of brands

The trend of consumers to be more aware in their purchasing is growing rather than shrinking.

That is one of the insights presented at the recent Cause Marketing Forum in Chicago by Raphael Bemporad and Mitch Baranowski, co-founders of BBMG, a branding and integrated marketing agency.

They shared the results of the BBMG Conscious Consumer Report, issued in partnership with Global Strategy Group, a strategic research firm, and Bagatto, a customer insights consultancy.

Based on surveys taken among 2,007 people nationwide, the partnership offered the following key findings:

The most important issues are the most personal. The most pressing issues by far are those that most directly affect consumers.
There is a conscious boom. The language and labels of the conscious consumer – “ socially responsible,” “environmentally friendly” – have penetrated the marketplace and become part of the consumer culture.
They are making more informed decisions. People refer to newspapers and magazines, certification labels and the Internet.
They are moving beyond convenience. While price and quality are paramount, convenience has been edged out by more socially-relevant considerations.
They reward for social responsibility. When given a choice, consumers are more likely to buy from a company that manufactures energy-efficient products, promotes consumer health and safety, supports fair labor, commits to environmentally friendly practices and manufactures in the United States.
Is it easy being green? Consumers willingly engage in recycling and energy efficiency, but they shy away from more demanding behaviors, such as carpooling, public transportation or purchasing carbon offsets.