Seeking In-Kind Donations During Economic Recovery
The US economy is still vacillating from the impacts of coronavirus and other crises, with some sectors, like tech, insulated from the worst blows and others still reeling. When the U.S. and global economy began to falter, many worried about the state of corporate philanthropy. But contrary to expectations, corporate giving actually moves inversely to the economy’s health. As Accelerist wrote in the Building Stand Out Partnerships During a Recession report, 2008 saw an upsurge in giving as an immediate response to crisis and contraction. Early 2020 saw a similar outpouring. But by 2009, corporate giving fell in conjunction with budget cuts. Now, as FY20 Q4 approaches and companies have their eye on 2021, tightening budgets and long-term uncertainty means that corporate partnerships will look different. Nonprofits should have a say in that transformation too.
- Nearly 80% of companies report no change or increase in current CSR contributions due to COVID-19. (COVID-19 Impact on CSR, Rocket Social Impact, ACCP – May 2020)
- 60% of companies report that they are looking at new issues to support in their fiscal year. (COVID-19 Impact on CSR, Rocket Social Impact, ACCP – May 2020)
- GDP shrank at an annual rate of 31.7% in Q2, which is almost 4x worse than the worst quarter of the Great Recession (BEA)
- Corporate profits decreased $276.2 billion in the first quarter and $226.9 billion in the second quarter and (BEA).
Impact on Partnerships
Many aspects of corporate partnerships are subject to change in 2021, but let’s narrow our focus to in-kind donations. Given the economic uncertainties, it can be difficult to ask for an increase in monetary commitment. In-kind donations are a great way to get more out of a partnership in a way that works for both parties.
Accelerist recommends defining a minimum revenue commitment (MRC) for any corporate partner. (If you don’t have a minimum, check out this resource or this one to get you started.) Gifts-in-kind should be a key part of any minimum commitment strategy. If you have recently developed or reexamined your minimum donation threshold, the inclusion of a formal gifts-in-kind strategy can be useful to understand what to ask of corporate partners.
Here are a few tips to get you ready for whatever disruption Q4 and beyond brings:
- (Re)examine your needs – The pandemic has changed the needs of many populations domestically and globally. The demands on organizations and the resources available to meet those needs have changed with them. Thoughtfully examine the landscape in the near-term and long-term to determine if there are new opportunities for in-kind contributions, or if there is greater capacity for old needs.
- Revamp your gift acceptance policy – Does it cover any needs or gaps that have arisen during the pandemic? Does it cover new or expanded services or programs? An outdated acceptance policy may limit you moving forward or discourage partners.
- Get creative – Focusing on a more robust in-kind donation program also creates room for creativity in your partnership selection. After you reexamine your needs, expand your idea of who a good partner is and what a productive partnership might look like.
- Refine your ask – Whether its tangible goods or services, the kinds of gifts you accept (and don’t accept) should be clear. This is part of your clearly defined MRC. Make sure your partner knows what’s on the table and encourage them to get to creative as well! With intimate knowledge of their business, they might come up with solutions that you didn’t know existed for your product and service needs.
- Recognize the gift – Money is not the only thing that talks! Develop a strategy for wrapping in-kind gifts into the total contributions that a company brings to the partnership. Be sure to communicate that impact back to them.
How have your in-kind donation needs or your in-kind strategy changed as a result of the pandemic?