Companies have been told to be strategic in their charity relationships and careful not to end up burdening charities with ineffective or costly non-financial gifts, in a new guide released today.

New Philanthropy Capital has today released a publication for companies engaging with philanthropy and charities. In the publication, designed as a practical guide to effective corporate partnerships, the think tank identifies five tasks companies should embark on to set the framework for a profitable partnership; identify focus area, select an effective charity, define objectives, develop a package of support and measure the impact.

The report emphasises the power of corporate funding to make a difference to charities and their beneficiaries, even when companies themselves have less to give. “It is crucial for companies to think about how to use their limited charitable resources in the best way possible to address the changing needs of the individuals and charities they want to help,” the report says.  

But NPC also warns companies about their use of non-financial contributions. Fundraising magazine’s annual Corporate Partnerships Survey, due out next week, found that many corporate partnerships involve volunteering and gifts in kind, but many charities don’t even include these contributions in their measurement of the success of the partnership.

The NPC guide attempts to make companies more cautious about offering gifts in kind or volunteering due to the potential cost to the charity or ineffectiveness of such donations.

“Corporate funders should also ask the charity what volunteering opportunities will be most useful to them. Volunteering can be very expensive for a charity to manage and can divert resources from core work. It is therefore important that charities feel able to reject offers of volunteering if they would not be helpful, and they should not feel worried about losing out on funding if they cannot provide volunteering opportunities,” the report says.

Gifts in kind can also involve cost to the charity, the Corporate Funding guide says, and companies should ensure that the charity is confident that if they do not accept a gift in kind it will not damage the relationship.

The report urges companies to “when offering donations in kind… ensure that they talk to the charity about how these costs will be covered before the charity accepts the donation. Any reporting that the funder requires on donations in kind should be made clear at the start.”