Is the Power of Corporations Shaping Nonprofits?
We know that we're living at a time of great shapeshifting, and the changes affect the nonprofit sector as well. One of the most significant shifts is corporations’ power and influence over what donors can and cannot do with the nonprofits they support. It's becoming common practice for corporations to deny donors or organizations the resources they need in the economy if their values don’t align.
The Implications of Diverting Giving for Nonprofits
The problem is that it could happen to your nonprofit eventually. When corporations make the choice, everyone is at risk.
The fact is that when corporations choose to dictate the terms of giving to nonprofits, you have a situation that will eventually strike the mission and values that you hold dear. As we know, the pendulum swings one way or the other at different points. All it takes is a new generation with new ideas and values. So, a corporation stating that it is the one that determines which organizations with which it will do business is something that should cause you immense concern.
So, how’s this happening? It’s occurring in several ways.
For example, recently, JPMorgan Chase was caught up in controversy when it allegedly ‘debanked' (i.e., no longer serving legal persons or organizations) the National Committee for Religious Freedom (NCRF) because the nonprofit didn't align with the corporation's values. A claim the bank has denied, according to The Wall Street Journal.
Further, PayPal changed its terms last year to state it won't process payments for whatever it views as messages that “promote misinformation,” according to USA Today. The payment processor later removed the language from its acceptable use policy, calling it an error.
The problem is that in a country that's so politically divided, half of the nation will say its views and beliefs are being disregarded at best and assaulted at worst. As an attorney, it’s troubling to see nonprofits getting debanked because it sets a terrible precedent. Moreover, corporations are showing that they're no longer afraid to take a side in social debates and are willing to take the gloves off. This is not good for nonprofits.
For generations, corporations stayed out of public debate. Now, not so much. An NCRF board member and an Alliance Defending Freedom (ADF) employee wrote an op-ed for Newsweek, noting Fidelity Charitable, which states it is neutral to causes, “has told several donors that they can't give to the ADF unless they relinquish their anonymity and put their name on the grant — a major deterrence to giving — because it ‘cannot be assured that the grant will be used exclusively for proper charitable purposes.’”
As a nonprofit leader, this should trouble you because the privacy of donors to give as they wish is being challenged.
Fidelity Charitable, a 501(c)(3) serviced by Fidelity corporations, names a few instances where a grant recommendation can be declined. They include:
- The loss of public charity status. The organization is no longer recognized by the IRS as a public charity.
- Illegal or non-charitable activities. The organization is being investigated regarding illegal activities or non-charitable activities by state or federal authorities.
- Impermissible benefits. The donation provides goods or services, such as event tickets or a scholarship fund for which the donor controls the selection process.
- Financial obligations and pledges. The donation fulfills an enforceable pledge to which the donor committed (non-legally binding pledges are acceptable).
- Noncompliance. The organization does not comply with guidelines, including not being a 501(c)(3) public charity.
Editor’s Note: NonProfit PRO reached out to learn more about the alleged claims and Fidelity Charitable’s policies, but Fidelity Charitable did not respond to requests for comments by the time of publication.
Social Credit Scoring
We’ve all entered a new era of corporate control where legitimate nonprofit organizations have to toe the line of corporations. Another example of this control by corporations forcing organizations, including nonprofits, to adhere to their values has to do with social credit scoring. Plainly, equity, social, and governance (ESG) goals may seem good for society on the surface. However, how these values get implemented is up for debate.
For example, corporations have stepped into the political divide, and they're looking to evaluate borrowers (including nonprofits) based on their social credit score. What's that, you ask? Simple. It's what you represent to the public about your organization, including everything you say, write, your mission focus and anything depicting your brand or identity. So, if your nonprofit doesn't align with the ESG goals of corporations, you're flat out of luck. Go elsewhere.
Navigating the Corporate Landscape
You might think that only some nonprofits are experiencing issues affecting their fundraising and donors. Perhaps, but maybe not. A recent CSR and ESG survey by the Association of Corporate Citizenship Professionals (ACCP) shows “exclusive insights into the real-world impact a polarized political environment and increasing demands.” In short, the sector has problems with corporations.
So, what can your nonprofit do in light of the dawn of corporate doxing, debanking and social credit scoring for services?
1. Stay Informed
The first thing your nonprofit must know is that even if it's happening to the one side right now, it will eventually come to you. And do we, as a nation, want to give corporations so much unfettered power? At least politicians get voted on and have to answer to voters. Therefore, nonprofit leaders must stay informed on different topics, including economics, business news and what's happening politically.
2. Embrace Forward Thinking
It's vital to realize that the status quo isn't always the case. The fact of the matter is that there's a robust debate between parties, among people, and impacting nonprofits relating to what type of nation and values this country will support. As a result, you need to stay ahead and open to information. In short, every nonprofit needs to understand who holds the levers of power — including corporations.
3. Engage Board Leadership and Fundraising Teams
Nonprofit executives must inform their board leadership and fundraising teams about what’s happening with corporations starting to dictate — and impose — their values on nonprofits and the nation. Who voted corporate CEOs as the leaders of what happens in our nonprofit’s economics and social missions? I must have missed the day we voted on their national leadership.
Nonprofit leaders and, yes, donors, have to realize that there's a significant shift happening. Corporations have extended their mandate far beyond economics and making a profit. Now they're influencing public discourse and demanding legal entities (people and nonprofits alike) to do as they expect — according to their values. So, by staying informed, your organization is now notified that corporate overlords could affect your mission.
The preceding blog was provided by an individual unaffiliated with NonProfit PRO. The views expressed within do not directly reflect the thoughts or opinions of NonProfit PRO.
Paul D’Alessandro, J.D., CFRE, is a vice president at Innovest Portfolio Solutions. He is also the founder of High Impact Nonprofit Advisors (HNA), and D’Alessandro Inc. (DAI), which is a fundraising and strategic management consulting company. With more than 30 years of experience in the philanthropic sector, he’s the author of “The Future of Fundraising: How Philanthropy’s Future is Here with Donors Dictating the Terms.”
He has worked with hundreds of nonprofits to raise more than $1 billion dollars for his clients in the U.S. and abroad. In addition, as a nonprofit and business expert — who is also a practicing attorney — Paul has worked with high-level global philanthropists, vetting and negotiating their strategic gifts to charitable causes. Paul understands that today’s environment requires innovation and fresh thinking, which is why he launched HNA to train and coach leaders who want to make a difference in the world.