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Should large corporates support multiple charities (Model 1) or, simply focus on one partnership on a deeper level (Model 2)? This appears to be a common theme among corporate-charity collaboration strategies. The general narrative suggests it’s better to support fewer charities well than many charities a little. Though I can see the logic in this argument, the alternative appears to be underrepresented and not fully explored. The position for ‘less is more,’ seems to be relying on its success when analysing the debate on two levels, with the level of impact being the crux. But should we be trying to answer this question by looking at it from a third level?
Level 1 – Simple Math?
A very holistic view automatically suggests that the more charities you donate to, the more charities receive funding.
Obviously, this is an overly simplistic way of looking at it and there is far more to take into consideration. Nonetheless, this is where the issue starts – by looking at simple level mathematics. If we look at the figure above and imagine that each black arrow represents money donated. Let’s say that the company had an annual budget of £20. Simply put in Model 1 each charity would receive £2. However in Model 2, the two charities would receive £10 each, but the remaining eight would receive nothing. We would not be able to decipher which model is better at this level, so we would have to create a second to figure out the most appropriate strategy.
Level 2 – The Value of Impact
It might be true that the mathematical result of 10 x 2 is the same as 2 x 10, but do we get the same result when looking at the equation through a lens of impact? If a company donates £10 to 2 charities, is this the same net impact as donating £2 to 10 charities? It’s safe to say that it wouldn’t be. With transaction fees and larger sums of money going further, it’s a fair point to make that less appears to be more through a lens of impact.
A perfect example of a large corporation adopting this strategy would be Virgin Media’s announcement in 2015 to focus more of its efforts in partnering specifically with a single charity: Scope. It seems that by streamlining their corporate-charity strategy, Virgin Media would be able to have a larger reach on some of the most vulnerable people in the country. A tactic that perhaps would not be possible if they had diluted their efforts in order to focus on multiple strategies. This presents a great real-world example of how Model 2, is gaining a lot of legitimacy in the CSR narrative and respectfully so.
However, moving away from real-world examples and looking back to the model in Fig. 2 – it just doesn’t sit right that 8 charities should be excluded from valuable and much-needed support. The issue could be further explored through the use of logic and building a third level on the figure above. However, before engaging with logic and a third level, let’s have a look at the impact of adopting Model 2 from a different perspective.
What About the Little Guy?
Firstly, we need to look at the level of potential dilution when it comes to corporate donations on a large scale. It’s true that donations are subject to transaction fees, which would limit the impact of a £2 donation – however, we are not focusing on £2 donations, but more so on larger sums of money donated to charities. Transaction fees are capped per donation, and large corporations donate in timely periods so as to make sure that as much money per charity is acquired to be impactful. Therefore, dilution caused by intermittent transaction would not cause such an issue when looking at corporate donations. Could it actually be no better or worse, whether you collaborate with multiple charities or a few? Or is it the case that more is more?
Charities that tend to get large donations from corporations are already well-established. They need the history, the marketing skill, and expertise, and the budget to be able to get on the radar of big corporations in order to develop such a close partnership. If this is the case, then smaller charities (that would have had at least some financial support) may now have even less. This is where the conversation currently fails. There needs to be a third level added to this equation which looks at the charity and the potential stakeholders that donations from corporations affect.
Level 3 – The Charity Stakeholders
If we look further than just immediate impact and look at each charity’s stakeholder group, we can see that the impact may not actually be the same. Each charity has a different mission with groups of people relying on that charity’s actions. If we had 10 charities each with their own mission, but only supported 2: we would leave 8 charities – with 8 varying missions and all their stakeholders – with no support.
We can see here in Model 2, that though the impact may be deeper for two charities, there is a possibility of a negative net impact when looking at the equation from a stakeholder level. Furthermore, from a corporate perspective, there is an element of getting a symbiotic return for their donations. If they wish to donate to charities, then this spread of philanthropy would hopefully hit their customers who rely on charities. However, if they only adopt a Model 2 approach, they are potentially ignoring a multitude of their customers’ needs.
It goes without saying: if a charity were to get a larger sum of money, then that money would have a greater impact on that group of stakeholders. However, a corporate only donating to one charity is only supporting one mission and one group of stakeholders. For example: should it be the case that a large corporation in 2018 would only be supporting one charity that helped disability in the workplace by donating £1 million – yes, there would be a magnitude of impact on the cause and the charity stakeholders. However, if in 2017 the same company distributed £1 million among small local charities, these same charities would – along with their stakeholders and a plethora of missions – would be at a loss in 2018. Of course, £1 million would be a great contribution to stakeholders of one mission, but would the impact be that much more than £10,000 to 100 different charities with 100 different missions among their dependents?
At What Cost?
There is still the argument in the difficulty of implantation. As a corporate wanting to donate a large sum of money, you would want as few barriers in play as possible. The fewer the barriers, the less money spent on overcoming them, and therefore the more money going directly to charity. If you only support one or two charities, then that is a model that is much easier to take on than having to vet, broker and arrange for a multitude of charities. At face-value, this may be true. However, there is a multitude of platforms that can aid in this very specific and niche venture of corporate-charity relationships. Through the use of these platforms, corporate employees can ever be given a choice to give to an array of charities and charitable causes.
Like with any operation, different models will suit and fit different companies with their own missions. However, when it comes to corporate-charity partnerships it truly does appear that more is, indeed, more.