How charities can get support from family businesses

Yesterday I blogged about the key conclusions of  ‘Natural Philanthropists’, the new report I’ve written on family business philanthropy. But as someone who started out as a fundraiser, I’m most excited about sharing the section of the report that contains ‘lessons for charities’ seeking support from this sector. Here’s a summary of what we found, for more details do have a look at the full report

1. Family business owners may be more ‘naturally philanthropic’ than non-family owners, but they are busy people, so do check the criteria to avoid a wasted application and ensure your proposition doesn’t make unreasonable expectations on their time. 

2. Family businesses respond positively to impressive individuals, they buy into the charity leadership as much as the charity’s mission.

3. Family businesses look for well-run charities that can prove their impact. The ‘ask’ needs to go beyond telling good stories to include evidence that the funds make a difference.

4. Do your research – family business owners have more discretion over philanthropic spending than non-family business, so look for family connections that enhance your appeal. 

5. Family businesses often support local sports teams, which combine doing good in the local community with publicity, for example by including company logos on kits; charities should think about ways they can offer similar promotional benefits.

6. Family businesses are predominantly small, and they have a tendency to work with similarly sized charities, preferably those that focus on the community in which the business is located. 

7. However, larger family businesses with increasingly globalised business arrangements may contribute to more strategic philanthropic approaches that disburse funds beyond the local community, as such businesses may feel less ‘rooted’ in their local neighbourhood and may feel less of an urge to ‘give something back’ to their community. 

8. Much family business decision making is informal – it happens around the kitchen table rather than at board meetings – so personal relationships with significant family members matter more than formal presentations to senior executives.

And finally – the family business owners who contributed to this research were clear that fundraisers should not be pessimistic about the impact of the recession: many family businesses would rather cut dividends than cut their charity budget and will avoid reneging on pledges, not least because of the reputational impact.

One told us: “Despite the current economic climate we will always see giving as a priority, none of the family members would think it was right to do less”

And another said: “I’m not saying our giving is untouchable but I can’t contemplate standing in front of close family members and saying ‘we’ll increase the dividend but we’re going to slash the charitable funds”. 

But fundraisers should expect to change their approach during the economic downturn, for example glamorous fundraising dinners are not attractive in this climate. As one owner said:

“The froth will be off, like taking a table at a glitzy, high-profile fundraising dinner that everybody’s got to bid daft prices for daft holidays, we’ll be avoiding those sorts of things”.

In conclusion, seeking support from family businesses involves a slightly different approach to traditional corporate fundraising – it’s more personal and a bit harder to get access to the decision makers. But the defining features of family businesses – values in the workplace and a commitment to stewardship – means that these firms are ‘naturally’ philanthropic and prefer continuity in their philanthropic acts. It may be harder to attract their initial support but the pay-off is a productive, meaningful, long-term relationship.

2 responses to “How charities can get support from family businesses

  1. As you have stated, it takes more to convince a member of a family run business to give money – (evidence of previous donations making a real difference etc) but surely this wouldn’t stop with the initial donation?

    During the ‘long-term’ is a company that is run in this way not going to want frequent reports of how their money is being spent?

    Also, as family run businesses are often smaller than other types of business, does this not mean that donations would be smaller and therefore to get the same amount of money as one would get from a single larger organisation, one would have to build up relationships with quite a few of these companies thereby increasing the amount of maintenance it would require to keep them?

  2. Family businesses aren’t all necessary smaller, and keep in mind that many big companies are making smaller and smaller gifts to longer lists of recipient charities.

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