Postet on behalf of Bruno and Eirin since they lack the necessary karma. I'm managing director of Stiftelsen Effekt and was part of the steering committee. Also see the relevant post by Tom Ash, Charity Science, from Jan 2015. As Markus Anderljung mentions in the comments, they also deem cooperating with EAs within a company a promising strategy.
Initial Research the potential of CSR-donations to effective charities
Effective Altruism Norway and the Effect foundation (Stiftelsen Effekt) started in September a project to reach out to companies and convince them to donate as part of their corporate social responsibility (CSR) efforts. Stiftelsen Effekt is a foundation started by a group of Norwegian Effective Altruists with the aim of promoting and simplifying donations to GiveWell’s recommended charities while also cutting down transaction costs.
The idea for this project came up after the leader of Stiftelsen Effekt (SE) was invited by an insurance company to present the Stiftelsen Effekt and its recommended charities, because they were looking for a new CSR-project. Especially GiveDirectly (GD) stood out because of GDLive and with it the possibility to put up a screen in offices showing a few example families to which “their” donations are being sent. The aim of this project is to explore if CSR is a worthwhile endeavour for EA Norway and to develop a strategy for it as well as an MVP-product for the display of GDLive.
However, CSR is a difficult area for EA in general, because businesses usually have other goals than creating the greatest social impact with their CSR contribution. Often they want to use CSR in recruitment, get good PR or use it primarily as a motivation tool for their employees. Especially large companies prefer to donate their products or pro bono work rather than cash, which is harder to channel towards effective charities. This vastly limits the scalability of fundraising from businesses, although from a very high level. It is interesting to note that the total marked in donations from private individuals dwarfs the marked from businesses, at least in Norway. Here businesses make out just 2% of private donations to charity. The rest are funds from the government, institutions and foundations [58 %], individuals [32 %] and sales/other [8 %].
This being said, there are several advantages with fundraising from companies:
- The marginal value of one more company donor is - on average - much higher than for individuals, but the marginal effort is not necessarily that much higher.
- By reaching the employees though the company CSR initiative, we get a great channel to promote effective charities to resourceful individuals who may themselves donate.
- The funding cannibalism effect on other effective charities is low with companies as donors.
If anyone is interested in more detail, see our more in-depth report here. This report is divided in two parts: a description of the CSR-project (pages 2-3) and a discussion of what we have learned in the first phase of the project and what we recommend going forward (page 4).
1. Preliminary research
We started by getting an overview of the CSR field in Norway through online researching and conversations with a few contacts at different companies. We also contacted companies of varying sizes and asked them about their CSR-efforts. We found that Norwegian CSR consists of four main objectives: human rights, labor rights, the environment and fight against corruption. These objectives are usually met through non-donation efforts, though it depends on the size of the company. Only a small part of larger companies’ CSR efforts are donations. Consultancies often do pro-bono work, while others focus more on enhancing eco-friendly production. Medium-sized companies had much more focus on donations, and the smaller companies even more. We also found that there were little incentives for donations in terms of tax deduction. It generally seems like effectiveness is not a big focus when it comes to CSR in Norway, but rather that the person in charge believes in the projects and that they feel like the charities fit with them.
Based on the initial research, we decided to focus on SMEs onward. We also decided to focus on GiveDirectly due to the possibility of using GDLive, but be open to promote another organization if we thought that would suit the company more. As a next step we planned our contact and sales process more in detail and tried it on our existing leads.
We expect much exploration value in testing out this concept as it is easily transferable to other countries if it works in Norway. In addition to this visual product used for motivation and keeping scores, it may be gamified further by employee competitions or events. This could raise employee engagement and productivity further, which has been shown to be a general effect of corporate philanthropy already (e.g. Raman & Zboja, 2008).
As a part of the package we present the companies, we offer that Stiftelsen Effekt handles transactions, reporting and contact with GD free of charge. On a regular basis, or whenever the company wishes, SE may give presentations to employees or managing staff about the effect of their donations. This is also high value facetime with resourceful private individuals.
What we want to to convince companies of are:
i) Donating money has positive use to them even from an economic standpoint
ii) We are a better partner for them to achieve this than other mega-charities.
3. Graphic design
To support our sales effort we made graphics that easily could be attached to emails. The pdf-file consisted of two pages:
i) A sales-pitch with an overview of the agreement we were proposing.
ii) An introduction to GiveDirectly and some information on Stiftelsen Effekt.
iii) An introduction to PHC and some information on Stiftelsen Effekt.
To find companies which seemed worthwhile contacting we tried multiple approaches. We used a general register of companies in Norway, searching Google with keywords like ‘cost-effective’ or ‘results-oriented’, and looked on LinkedIn for employees responsible for CSR. The method that has provided the most traction this far is having an EA employee in the company as support while they try to convince the responsible persons. For this, GWWC’s handbook on workplace activism is a great resource.
5. Visual product
One of our main selling points is a visual solution based on GDLive which we can offer the companies free of charge. We decided to go for a back-end solution on our own servers, as well as a lightweight front-end solution for the MVP. There is no API for GDLive yet, so we have to scrape the website regularly. A separate front-end solution allows for more customization tailored for each firm. We are planning for two versions for the front-end solution: One banner for the firms’ own website or intranet; and a full-page on a designated screen. We outsourced this element of the project to volunteers, which worked quite well.
The current visual product, a banner which could be placed on the side of e.g. an intranet page, shows 2-3 families at a time, with the same information as on the frontpage of GDLive. It shows name, picture, how long ago it is that they received a transfer, how much they transferred, and a few sentences on what they used the transfer on. The product also shows how much the company has donated so far, or alternatively how much that department of the firm has donated so far. Through GiveDirectly’s estimations, the product also shows a calculation of how many families the amount donated so far have gone to. There are additional ideas, mainly a version that spans across a full screen and shows a full profile, in development.
6. Organisational work
The project lasted three months and we were two employees working 30%. A steering committee made up of the managing director of the Effect foundation, board chair of EA Norway and two others with valuable experience helped by giving feedback and supporting us with professional expertise. We also got feedback from other people, both from within the EA-community and outside. We got in touch with them through a post on the EA Norway Facebook group, and through ours and the board’s contacts. This was especially useful in the first phase, when we had a lot of uncertainties surrounding how CSR works in Norway and what our strategy should be.
Lessons learned and the way forward
There still are multiple things we are unsure about:
i) Finding an effective process to search for and filter out good prospects
ii) What size, industry or other identifier should we focus on
iii) How to best make initial contact
iv) How good are our chances at competing with mega charities like the Red Cross
v) Is the visual product and concept an important selling point
8. CSR project 2.0
It still is our impression that CSR can be a worthwhile endeavour for EA, but in our current position contacting companies at near-random might not be the best strategy. We should focus more on setting a few high profile partnerships in place going through EAs who are already working instead of contacting as many companies as possible. This way we might get more attention and gather experience for future projects. So as a first step we’d recommend exhausting our already existing personal network within EA / GWWC by pushing and supporting workplace activism as much as possible. If our capacities prove to be larger than our network needs we can focus on making new contacts either through a refined strategy of emails and cold calls, trying to build personal contact on fairs or through pro-bono networks before offering a partnership or new ideas not discussed this far.
Our conclusion is that there is a substantial potential in getting donations from companies in Norway and that the lowest hanging fruit is to get EA-aligned people to advocate for the charities from within the companies. At scale, the tractability is more uncertain. Although we have limited knowledge of firms in other countries, we would also recommend EA-organisations there to consider researching the opportunities for directing CSR-funds towards effective charities either through direct contact or through EA-aligned people in the job force.