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Drew Madsen

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How Big Business Can Help Small Nonprofits Survive Tough Times

Posted: 05/16/2012 5:47 pm

Organizations across the country, especially nonprofits, continue to feel the impact of the economic downturn and could benefit from some assistance from corporate America.

Seven-in-eight nonprofits report they face increased demand for services this year, but 57 percent say they only have enough cash at one time to sustain their own operations for three months or less, a 2012 study by the Nonprofit Finance Fund finds.

The recession hit smaller-scale and local nonprofits especially hard. These smaller charities, which comprise about 90 percent of the nation's nonprofits, are often overlooked. According to the most recent Fall 2011 report by GuideStar, an information service about nonprofits, smaller charities are two times more likely than larger ones to see decreased income from private, corporate and governmental sources, but just as likely to face increases in demand.

Indeed, 20 percent of the smallest nonprofits reported to GuideStar they are considering folding for fiscal reasons. In contrast, only 5 percent of organizations with expenditures of more than $250,000 said they contemplate ceasing operations.

How can large companies help? By directly supporting worthy, smaller nonprofits at the local level. These philanthropies are on the ground and engrained in a community. They truly understand a community's needs and social challenges. They know how to make a difference in a neighborhood, a school and the environment.

And it's quite easy for a corporation that serves hundreds of markets across the country to invest in local nonprofits. For starters, involve employees with local ties to the community. My organization has found that employees at all levels want to get involved and make an impact in support of causes that are close to home.

Second, weave the importance of community into your corporate culture; your business will be better for it. Empower and enable your employees to get involved in their communities, and your organization will see the positive changes in how they treat customers or how they feel about you as an employer.

These concepts serve as the foundation of my organization's inaugural Darden Restaurant Community Grants Program. It lets employees recommend local nonprofits for individual grants from Darden. Collectively, these grants of $1.7 million make a positive impact that our employees feel good about. This year, Darden is awarding these grants to nearly 900 nonprofits that altogether help thousands of people.

While our particular exercise in local giving and engagement works for Darden and our nonprofit partners, each company must find an approach that best fits into its corporate culture and business. It's worth the effort. As businesses and employees navigate these still-difficult economic times, we all must remember that hundreds of local charities need our private-sector support.

 
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