Quanta Corporate Citizenship In-kind, in-time and in-knowledge donations
| Quanta Corporate Citizenship |
Companies willing to have a true strategic philanthropy should try to fully understand their donations in kind, in time and in knowledge. They are different things, and have different impacts. Organisations need to think about them carefully before deciding to commit to any of them.
In-kind donation is a great tool when properly done, but one of the most dangerous tools if mishandled. Unfortunately, is it mishandled more often than not.
If an organisation really wants to have a positive impact, in-kind donations should never be purely an instrument for an organisation to dispose of its unsold stocks. This can be a responsible way of disposing if aligned with other criteria, but if that is the only objective, then the donor is likely to create a much bigger problem than the one it is trying to solve.
The first issue with in-kind donation is that fall out consequences might disrupt the local economy and destroy local providers of identical goods. Regardless of how efficient the local business is or how cheaply it can provide its own goods, it will never be able to compete with someone offering it for free. So, in the vast majority of cases in-kind donations only have a truly positive impact if whatever is given cannot be procured from local sources or when the procurement is impossible.
For instance, medicines being donated during a disaster situation.
An alternative way for in-kind donation to happen is for the donating organisation to give goods to a charity, which later sells it to raise money for its projects. The danger here is that the charity could be procuring from – and therefore fomenting – the local economy instead of competing against it.
Then, there are the non-economical issues that any organisation willing to make in-kind donations should consider. The first of them is the risk posed by the goods donated to those who it should actually be benefitting. Goods such as expired medicines, quickly perishable goods, or products with safety instructions written in a foreign language might pose a greater threat than the benefit they can generate. They might even be offensive to the recipients, especially if the donor does not fully understand the local culture or religious peculiarities. They might not be appropriate to the local climate conditions or infrastructure (donors of electronic equipment often overlook voltage differences, for instance). But there are also other important elements regularly overlooked by donors when considering their donations. Sometimes donated goods such as genetically modified seeds or electronic equipment might create a long-term dependency on donors who are unable or unwilling to have a long-term commitment. The local community might also be unable to fix or replace the donated goods, or will only be able to do it at a very high price, as for instance with the replacement of broken hard drives or wheels of imported vehicles.
Another important point is that in-kind donations usually need to be transported and stored, and that has a cost, and it is usually a high one. It takes time and involves allocating good logistic resources to lead and coordinate the collection, transportation, storage and distribution of goods.
But the question most often overlooked by in-kind donors is whether their goods are actually required. The vast majority of in-kind donations I’ve seen throughout my career were actually more often things that donors wanted to give, but not necessarily things that beneficiaries wanted or needed. Once again, any organisation wanting to have a positive impact should first try to understand the ramifications of its donations.
Alanna Shaikh, from UN Dispatch, makes a very compelling point: “Only the people on the ground know what’s actually necessary; those of us in the rest of the world can only guess. (…) Some people like to donate goods instead of cash because they worry that cash won’t be used in a way that helps the needy. If that’s you, I have two points. 1) Why are you donating to an organisation you don’t trust? 2) What’s to stop them from selling your donated item and using the money for whatever they want? After Hurricane Mitch in 1998, Honduras was flooded with shipments of donated goods. They clogged ports, overwhelmed military transport, and made it nearly impossible for relief agencies to ship in the things they really needed. Those donations did harm, not good. Expired drugs had to be carefully disposed of. Inappropriate donations had to be transported away and discarded. All of this wasted time and money.”[1]
Volunteering presents some very similar problems to the in-kind donation. The difference is that it is a more specific in-kind donation: the time of those working for the donor. When done within the corporate philanthropic umbrella, in-time donation happens primarily when the organisation let its the employee dedicate part of its time to a chosen charity, with or without the company making a matched gift, for instance, the company donates £100 for every 10 hours donated by the employee to a charity as a volunteer.
From a strategic perspective, the company needs to be fully conscious that, in this kind of arrangement, the primary citizenship stakeholder is the employee and not the charity. The benefits the charity experiences are a potential (and very welcome) by-product, but the primary focus is on the employee.
The company – in the vast majority of cases – does not have any say about the charities chosen by the employees. So it might be part of a strategic employee engagement plan, but it is not strategic philanthropy. In the same way that paying above average salaries is not astrategic objective, but a way to achieve a strategic objective by retaining or motivating a workforce that delivers a competitive advantage vis-à-vis another organisation. For employee volunteering to be part of a broader strategic philanthropic plan, the company needs to be able to know why it wants to let its work force partner (and potentially match their effort through financial donation) with a specific charity or group of charities.
Assuming the company understands this, the next step is to evaluate the consequences of this option. Besides several of the considerations made above about in-kind donations, the other three important points to be made cover the risk of creating over-dependency from the charity on the resources provided by the company, the risk of exploiting or disrupting the work of the charity, and the risk of not adding true value.
Volunteering offers a broad scope for focusing on the giver and not on the beneficiaries, which might be detrimental both for the charity and the company allowing the volunteering work, let alone the beneficiaries. Anyone who has seen volunteers working in Africa or Asia have seen how regularly they disrupt more than add value. Their simple presence requires especial logistic arrangements. Often their differentiated treatment creates a (perceived or real) second-class cast, which undermines the efforts to build empowerment and self-confidence on the beneficiaries. Moreover, simply visiting projects causes an enormous disruption on the charity’s work. Or worse, they unintentionally make the beneficiaries feel as if they are in a human zoo, with their plights exposed to and patronised by wealthy individuals.
A few years ago this was brought home to me by the leader of a local community I was working with in Kenya.When she told me that they lose around 30 days of school every year because every time a new group of volunteers arrived (and they arrived every week), the children at the local school would stop to welcome, sing and interact with the volunteers. In 8 years of basic schooling, it meant that each child was losing more than one and a half full academic years entertaining volunteers.
But probably the biggest problem with volunteering is that – if the aim is to truly help the charities and their beneficiaries - it should be primarily focused on adding value to the charity and beneficiaries and not on the volunteer. But this equation is regularly inverted because donors have a much stronger bargaining position, and because charities see volunteers as potential source of current or future income and are often keen to go a long way to adapt themselves to what donors want to do.
That is not to say that people should only volunteer out of altruism. That would deny a large group of people the reason to volunteer, as some potential volunteers will always be moved by the desire to couple the help with their wish to experience something, to add something to their CVs, or to develop a new skill. To deny volunteers a return on their investment altogether would naturally alienate them from volunteering, and probably have a negative impact on many charities and beneficiaries. The issue is: if the objective is to help, charities should be the ones deciding how, when and who should help, and the help should not consume the scarce resources from the organisation or have a negative impact on the beneficiaries. I remember a group of volunteers working with me on a project for a charity. They were always ready to lend a hand on projects in touristic destinations; but as soon as the locations were less exotic places for which Lonely Planet wouldn’t waste time writing about, the organisation was left without volunteers.
On the other hand, when in-time donations are coupled with knowledge transfer, volunteering can become one of the best instruments to solve some of the most difficult problems faced by charities. As Daniela Barone, CEO of Impetus Trust, very cleverly put it, “I don’t want investment bankers helping painting walls. Charities will benefit much more if those bankers use their core skills and experience to help charities where they can really add value and expertise”. In my experience, in-knowledge donation is one of the best assets that an organisation can donate to a charity. Transferring skills, training, sharing experiences in an organised and structured way can have an enormous impact for charities. The most successful corporate-charity partnerships I’ve seen during my professional life have always been characterised by programmes designed around or with a substantial component of knowledge transfer.
The problem with in-knowledge support, in particular, is normally what happens behind the scenes, in the back offices, removed from the beneficiaries. NGO staff is generally better prepared than volunteers to deal with the programmatic issues. Rarely will volunteers add real value working on the frontline of project delivery. But, on the other hand, they may have more experience and expertise in how to run efficient back office operations, as a lot of what is (or should be) done in the NGO sector is similar to what is done in the corporate sector. But volunteers will naturally be much more excited to do something different to their normal everyday work, even if it is now carried out in a different environment. The challenges for both companies and charities is to work together to find a way to re-align the volunteers interests – the possibility of working directly with beneficiaries, albeit not having the expertise – with their own interests – getting volunteers to work where they can really have a significant impact –, so that volunteers stay long enough to implement meaningful knowledge transfer to the charities.
Finally, before engaging as a volunteer, there should be a concerted effort to understand the restrictions that the chosen charity has to face and the ‘nature’ of the charitable world in which it operates. All too often volunteers who do not take the time to understand the cultural environment fail to keep their enthusiasm, jump into criticism to early or try to frame or treat a charity like a pure for-profit organisation, and sometimes even try to implement changes that do not protect the essence that is ‘charity’. Charities are unable to attract and retain staff based on financial rewards, and focus their mission on doing the ‘right thing’ for their beneficiaries, even if that has an unrealistic cost for itself and its employees. These two sets of problems are only manageable because the charity operates based on a different cultural framework that is not necessarily replicable in a for-profit environment.
In-kind donation is a great tool when properly done, but one of the most dangerous tools if mishandled. Unfortunately, is it mishandled more often than not.
If an organisation really wants to have a positive impact, in-kind donations should never be purely an instrument for an organisation to dispose of its unsold stocks. This can be a responsible way of disposing if aligned with other criteria, but if that is the only objective, then the donor is likely to create a much bigger problem than the one it is trying to solve.
The first issue with in-kind donation is that fall out consequences might disrupt the local economy and destroy local providers of identical goods. Regardless of how efficient the local business is or how cheaply it can provide its own goods, it will never be able to compete with someone offering it for free. So, in the vast majority of cases in-kind donations only have a truly positive impact if whatever is given cannot be procured from local sources or when the procurement is impossible.
For instance, medicines being donated during a disaster situation.
An alternative way for in-kind donation to happen is for the donating organisation to give goods to a charity, which later sells it to raise money for its projects. The danger here is that the charity could be procuring from – and therefore fomenting – the local economy instead of competing against it.
Then, there are the non-economical issues that any organisation willing to make in-kind donations should consider. The first of them is the risk posed by the goods donated to those who it should actually be benefitting. Goods such as expired medicines, quickly perishable goods, or products with safety instructions written in a foreign language might pose a greater threat than the benefit they can generate. They might even be offensive to the recipients, especially if the donor does not fully understand the local culture or religious peculiarities. They might not be appropriate to the local climate conditions or infrastructure (donors of electronic equipment often overlook voltage differences, for instance). But there are also other important elements regularly overlooked by donors when considering their donations. Sometimes donated goods such as genetically modified seeds or electronic equipment might create a long-term dependency on donors who are unable or unwilling to have a long-term commitment. The local community might also be unable to fix or replace the donated goods, or will only be able to do it at a very high price, as for instance with the replacement of broken hard drives or wheels of imported vehicles.
Another important point is that in-kind donations usually need to be transported and stored, and that has a cost, and it is usually a high one. It takes time and involves allocating good logistic resources to lead and coordinate the collection, transportation, storage and distribution of goods.
But the question most often overlooked by in-kind donors is whether their goods are actually required. The vast majority of in-kind donations I’ve seen throughout my career were actually more often things that donors wanted to give, but not necessarily things that beneficiaries wanted or needed. Once again, any organisation wanting to have a positive impact should first try to understand the ramifications of its donations.
Alanna Shaikh, from UN Dispatch, makes a very compelling point: “Only the people on the ground know what’s actually necessary; those of us in the rest of the world can only guess. (…) Some people like to donate goods instead of cash because they worry that cash won’t be used in a way that helps the needy. If that’s you, I have two points. 1) Why are you donating to an organisation you don’t trust? 2) What’s to stop them from selling your donated item and using the money for whatever they want? After Hurricane Mitch in 1998, Honduras was flooded with shipments of donated goods. They clogged ports, overwhelmed military transport, and made it nearly impossible for relief agencies to ship in the things they really needed. Those donations did harm, not good. Expired drugs had to be carefully disposed of. Inappropriate donations had to be transported away and discarded. All of this wasted time and money.”[1]
Volunteering presents some very similar problems to the in-kind donation. The difference is that it is a more specific in-kind donation: the time of those working for the donor. When done within the corporate philanthropic umbrella, in-time donation happens primarily when the organisation let its the employee dedicate part of its time to a chosen charity, with or without the company making a matched gift, for instance, the company donates £100 for every 10 hours donated by the employee to a charity as a volunteer.
From a strategic perspective, the company needs to be fully conscious that, in this kind of arrangement, the primary citizenship stakeholder is the employee and not the charity. The benefits the charity experiences are a potential (and very welcome) by-product, but the primary focus is on the employee.
The company – in the vast majority of cases – does not have any say about the charities chosen by the employees. So it might be part of a strategic employee engagement plan, but it is not strategic philanthropy. In the same way that paying above average salaries is not astrategic objective, but a way to achieve a strategic objective by retaining or motivating a workforce that delivers a competitive advantage vis-à-vis another organisation. For employee volunteering to be part of a broader strategic philanthropic plan, the company needs to be able to know why it wants to let its work force partner (and potentially match their effort through financial donation) with a specific charity or group of charities.
Assuming the company understands this, the next step is to evaluate the consequences of this option. Besides several of the considerations made above about in-kind donations, the other three important points to be made cover the risk of creating over-dependency from the charity on the resources provided by the company, the risk of exploiting or disrupting the work of the charity, and the risk of not adding true value.
Volunteering offers a broad scope for focusing on the giver and not on the beneficiaries, which might be detrimental both for the charity and the company allowing the volunteering work, let alone the beneficiaries. Anyone who has seen volunteers working in Africa or Asia have seen how regularly they disrupt more than add value. Their simple presence requires especial logistic arrangements. Often their differentiated treatment creates a (perceived or real) second-class cast, which undermines the efforts to build empowerment and self-confidence on the beneficiaries. Moreover, simply visiting projects causes an enormous disruption on the charity’s work. Or worse, they unintentionally make the beneficiaries feel as if they are in a human zoo, with their plights exposed to and patronised by wealthy individuals.
A few years ago this was brought home to me by the leader of a local community I was working with in Kenya.When she told me that they lose around 30 days of school every year because every time a new group of volunteers arrived (and they arrived every week), the children at the local school would stop to welcome, sing and interact with the volunteers. In 8 years of basic schooling, it meant that each child was losing more than one and a half full academic years entertaining volunteers.
But probably the biggest problem with volunteering is that – if the aim is to truly help the charities and their beneficiaries - it should be primarily focused on adding value to the charity and beneficiaries and not on the volunteer. But this equation is regularly inverted because donors have a much stronger bargaining position, and because charities see volunteers as potential source of current or future income and are often keen to go a long way to adapt themselves to what donors want to do.
That is not to say that people should only volunteer out of altruism. That would deny a large group of people the reason to volunteer, as some potential volunteers will always be moved by the desire to couple the help with their wish to experience something, to add something to their CVs, or to develop a new skill. To deny volunteers a return on their investment altogether would naturally alienate them from volunteering, and probably have a negative impact on many charities and beneficiaries. The issue is: if the objective is to help, charities should be the ones deciding how, when and who should help, and the help should not consume the scarce resources from the organisation or have a negative impact on the beneficiaries. I remember a group of volunteers working with me on a project for a charity. They were always ready to lend a hand on projects in touristic destinations; but as soon as the locations were less exotic places for which Lonely Planet wouldn’t waste time writing about, the organisation was left without volunteers.
On the other hand, when in-time donations are coupled with knowledge transfer, volunteering can become one of the best instruments to solve some of the most difficult problems faced by charities. As Daniela Barone, CEO of Impetus Trust, very cleverly put it, “I don’t want investment bankers helping painting walls. Charities will benefit much more if those bankers use their core skills and experience to help charities where they can really add value and expertise”. In my experience, in-knowledge donation is one of the best assets that an organisation can donate to a charity. Transferring skills, training, sharing experiences in an organised and structured way can have an enormous impact for charities. The most successful corporate-charity partnerships I’ve seen during my professional life have always been characterised by programmes designed around or with a substantial component of knowledge transfer.
The problem with in-knowledge support, in particular, is normally what happens behind the scenes, in the back offices, removed from the beneficiaries. NGO staff is generally better prepared than volunteers to deal with the programmatic issues. Rarely will volunteers add real value working on the frontline of project delivery. But, on the other hand, they may have more experience and expertise in how to run efficient back office operations, as a lot of what is (or should be) done in the NGO sector is similar to what is done in the corporate sector. But volunteers will naturally be much more excited to do something different to their normal everyday work, even if it is now carried out in a different environment. The challenges for both companies and charities is to work together to find a way to re-align the volunteers interests – the possibility of working directly with beneficiaries, albeit not having the expertise – with their own interests – getting volunteers to work where they can really have a significant impact –, so that volunteers stay long enough to implement meaningful knowledge transfer to the charities.
Finally, before engaging as a volunteer, there should be a concerted effort to understand the restrictions that the chosen charity has to face and the ‘nature’ of the charitable world in which it operates. All too often volunteers who do not take the time to understand the cultural environment fail to keep their enthusiasm, jump into criticism to early or try to frame or treat a charity like a pure for-profit organisation, and sometimes even try to implement changes that do not protect the essence that is ‘charity’. Charities are unable to attract and retain staff based on financial rewards, and focus their mission on doing the ‘right thing’ for their beneficiaries, even if that has an unrealistic cost for itself and its employees. These two sets of problems are only manageable because the charity operates based on a different cultural framework that is not necessarily replicable in a for-profit environment.
1 – Alanna Shaikh. No one needs your old shoes. 16 January 2010. (http://goo.gl/lnqP)
