How Corporate Social Responsibility Is Impacting the Nonprofit Sector

Companies have elevated corporate social responsibility in a way that blurs the line between for-profit and nonprofit endeavors. So what role will this effect have on the future of nonprofits? 

Experts dove into this subject in a panel titled “Could Corporate Social Good Make Nonprofits Irrelevant” at the Nonprofit Fundraisers Symposium, which The Nonprofit Alliance and Direct Marketing Association of Washington hosted last week in Washington, D.C.

Here are a few areas they discussed to determine how nonprofits can embrace corporate social responsibility instead of fighting against it.

Embracing the Blur

Those working as a nonprofit professional don’t always appreciate comparisons to the for-profit world, but there are similarities and lessons to be learned from their corporate counterparts. John Trybus, Ph.D., serves as a professor of social impact at Georgetown University and executive director of the Center for Social Impact Communication. In his latter role, he advises nonprofit fundraisers and marketers on social impact communications.

“We, of course, work with a lot of nonprofits over not underestimating the roles of those other types of organizations and professionals,” Trybus said. “So we like to say our tagline, if you will, is ‘embrace the blur for good’ — the blur between organization types, roles and functions. And really then the question is, how do we navigate that embracing the blur going forward?”

Competing for Dollars

Nonprofits are competing for dollars in almost the same way corporations do. The difference is product or service versus mission. Jason J. Fichtner, Ph.D., chief economist at Bipartisan Policy Center, argued nonprofits should think of donors as “customers” or “clients.” After all, there are nonprofits with similar missions competing against one another for donors, so a nonprofit’s goal is to stand out in much the same way a for-profit must stand out amongst its competitors.  

“So it's trying to figure out that message that resonates,” he said. “I don't want you to think of being profit centers. I don't like that in the nonprofit world, but I think you have to understand that there's an appeal — you're trying to get somebody to give up their dollars. What do they get for it? What is that message?”

In an unofficial poll with his staff, Fichtner asked those who were wearing clothing brands, like Patagonia, if they purchased the apparel as a result of the brand’s social good message. While some were familiar with the message, the resounding answer was that the company stood behind its product. 

“What my staff did not equate was they did not see that purchase or product as being a charitable donation in any sense of the word,” he said. “But I think it makes them think about what is doing good? And so if someone comes along from a fundraising perspective, and ties into that message, it's more receptive. The key is how do you tie into that message and what is that pitch?”

Fighting the Noise on GivingTuesday

If there wasn’t enough competition among nonprofits vying for support on GivingTuesday, the day after Cyber Monday traditionally reserved for donating to nonprofits, corporations are now beginning to promote their social good efforts in emails and elsewhere to consumers. 

“It's not about donating to this nonprofit partner that we've decided to partner with,” Laetitia Morrisson, director of corporate education at Discovery Education said. “It’s we, as a company, are your partner in addressing this social issue. And you can do that by just buying our product, right? You don't have to take an extra step. You don't have to go find another organization to work with. We are your partner because you already buy things from us and we already know what you care about. And we're just going to deliver that for you.” 

Observing Its Influence on Younger Generations

There are two peaks happening simultaneously this year regarding donor demographics. Each year from 2024 to 2027, 4.1 million Americans will turn 65, so that roughly equals 11,200 each day, Fichtner said. Millennials — now the largest demographic — are essentially at their peak year.

While baby boomers may still be nonprofits’ prime donors, millennials may be the coveted donor demographic in the future. They’ve just been challenged with a variety of obstacles, including overcoming student loan debt, the Great Recession and buying a house, Fichtner said.

“So I think their biggest dollar donor years are still to come,” he said. “If they can solve a savings, retirement, student loan debt challenge, they're coming. So I think that's part of the future.” 

But there are a few trends emerging in terms of ways to entice millennials and Gen Zers to give. Namely, those include creating effective messaging and establishing trust.

Storytelling

Younger generations have largely pushed corporations to do good to gain their business. Investing in causes helps corporations’ bottom lines by hooking a new generation of consumers, Morrisson said. On the nonprofit side, there’s not a product in the picture, but nonprofits still need to adapt to this new way of thinking about social good with tactics that include enticing donors to become sustainers and building a community. 

“It's not just about that one-moment-in-time donation … but what is it about your organization that really speaks to that audience so that they want to continue to come back and invest in the work that you're doing?” Morrisson said. “And I think companies have a lot more flexibility in the way of communicating a message. And that message is resonating in a way that nonprofits haven't had the ability to do so.”

Trust

Trust for American institutions has been on the decline for decades. Despite nonprofits remaining the most trusted type of institution, a 2023 study found only 39% of Americans trusted charitable organizations. 

While nonprofits tend to stay true to their mission, a corporate business model may put profit over its social good initiatives at times. Fichtner pointed to Nike, which has had female athletes leave the brand as a result of not supporting a female athlete after pregnancy. 

“So the reason I brought this up is because Nike is an interesting example of how you could have a long-standing message of social justice and still completely screw it up with another demographic group.”

Younger generations are among those lacking trust in institutions, Nicole Abudayeh, a student at Georgetown University, said. Instead of favoring bigger nonprofits, Gen Zers prefer giving to grassroots efforts, like a GoFundMe campaign posted on TikTok.

“I think people are shifting their social good to their communities and more on-the-ground efforts as opposed to those larger systems and those larger organizations,” she said. “… And I think it's easier to feel supported by people that you are connected to or by people that you're working and dealing with on a closer one-on-one basis, as opposed to feeling connected to this random company with however many people based in whatever state that's reaching out to you via email.” 

Building New Partnerships

Connecting with partners to grow a corporate giving program is not a new concept, but it’s important to stay attuned to corporate partners’ needs

First and foremost, corporations are looking for the alignment between their business and a potential nonprofit partner, Morrisson said. Impact is also part of that equation since corporations aren’t trying to replace nonprofits and fulfill their missions. In fact, a lot more corporations are refocusing their social good efforts to make more impact. Instead of giving small grants to 500 organizations, they’re focused on dividing the funding among fewer organizations that closer align with their own values.

“Companies don’t want to have to do the work that nonprofits do,” Morrisson said. “They don’t know how to do the work that nonprofits do. What they do know how to do is create a message that connects to consumers and engages them. … Ultimately, what I think we’re all seeing is companies are really investing in developing a social good messaging, structure, strategy so that they can better align with the right nonprofits.”

Morrisson also pointed out that public-facing corporations are not the only opportunities when it comes to corporate partnerships. Contributing to these corporations’ success are partners or contractors that are also adopting corporate social responsibility mindsets to align with their clients. 

“And so nonprofits that are partnering and getting the large dollars for those companies that I'm noticing is the nonprofit that understands that message of ‘how is my work, my organization best aligned to help this company tell their story of social good that's going to drive their value?’” she said. “I think that's a really unique nuance that is changing the way companies are looking at metrics of success from a social perspective.”