The Nonprofit FAQ

What About Corporate Sponsorships?

Channing Hillway, PhD (an Adviser/Consultant - Communication: Organization Development, Education, Training -, from Post Office Box 5329, Ventura CA 93005-0329) provided this essay for the FAQ on August 21, 1995: Seeking financial support: Relationships with corporate sponsors All non-profits need money to achieve their goals. There may be a concern that in seeking financial support an organization will be compromised. There are safeguards against a nonprofit being manipulated by an private corporation. First is the very question of manipulation and the intuitive reasons for its being raised. If the corporate sponsor is in a business which is in conflict with the goals of the organization, the question is whether or not the corporation is seeking to balance its public image by contributing to an organization which will seem to counter some negatives. For example, Chevron's "People do" commercials are airing is an attempt to put a positive face on a court case it lost regarding destruction to the environment. The details are not clear to me, but the "People do" message misrepresents the facts. Chevron did the things it's advertising because it was compelled by court action, not altruism (according to the UCLA program in environmental geography). If an organization is in a situation where it will be serving the need of, say, Phillip Morris because PM is contributing to the organization's support of cancer research, then one must decide if the money is worth it. If the corporate sponsor wants someone to sit on the non-profit's board of directors, a serious question is raised, in my view, changing the complexion of it all. The non-profit's constitution and by-laws, depending on who wrote them and how well, should provide some protection against manipulation. If not, then setting up a team to revise them may be in order. Less than 50 percent of board members should be affiliated with corporate sponsors. There should be a limit on how much an individual board member can contribute when a non-profit's objectives focus beyond the narrow interests of just a few. Depending on the state in which the non-profit is incorporated, legal constraints will provide some protection. If one has not taken time to read the pertinent sections of the statutes regulating non-profits in the state, it should be done without delay. Finally, the anxiety that an organization will have to bend to the will of a contributor should be avoided. If a musical non-profit dedicated to classical music of a certain period is asked to perform in a rock'n'roll concert in return for a contribution, serious questions must be considered by the board of directors. The musical conflict and anxiety is probably just not appropriate. One must be willing to just walk away if it comes to that. A corporate sponsor is more likely, I believe, to seek to maintain a hands-off position in order to benefit from affiliation with a non-profit. A corporation's own reputation could be seriously compromised by rumors or proof of its manipulation through contributions to a non-profit. Contributions should be accepted without signing into any special deals. All requests for special projects should be approved by the board of directors. If, as a non-profit's director, one is personally at odds with the board -- if one should discover that a different agenda is and always has been in place of which one was previously unaware -- then one may be more comfortable moving on to another organization.