Rich is a One Young World Ambassador from the USA and the founder of KarmaConnect.
Over the last 30 years corporate donations to charitable organizations in the United States have progressively declined. The speed of this decline has accelerated exponentially over the last 10 years where corporate donations, as a measure of pretax earnings, have dropped by half. The United States has a $1.5 Trillion charitable giving economy, but private-sector donations make up little more than 1% of total donations.
To clarify the statistics above, overall giving as measured by absolute dollar value has increased over time. The Committee Encouraging Corporate Philanthropy state that corporate giving grew for 64% of companies between 2010 and 2013. But that statistic doesn’t properly describe the current landscape; the true measure of corporate generosity should be measured by corporations giving as a percentage of profits.
Contrary to corporations, donations by individuals have stayed virtually unchanged over the same period of time. The United States consistently sees approximately 25% of its population volunteer across various charitable causes.
While individual donations have been steady, as measured by a percentage of giving, they pale in comparison to the actual amount of money that is available from corporations. To truly increase the amount of money available for donations the corporate giving structure must be changed.
But how can a historic system, entrenched in bureaucracy and examined closely by shareholders be changed? The answer is to reward the consistently charitable individuals and providing a return on investment (ROI) to corporations who donate. This creates an ecosystem of social impact.
This ecosystem is KarmaConnect.
KarmaConnect is a Boston based start up with the goal of making corporate social responsibility good for business. The more nonprofits that businesses donate to the more customers they get access to.
Here’s how it works:
1) Businesses join the platform to find and donate to registered nonprofits.
2) Volunteers and donors for those nonprofits unlock discounts for the businesses products.
This provides businesses a way to leverage donations to increase sales; encouraging them to donate more. Businesses pay a monthly fee to join the platform and 5% of that fee gets distributed to all of our nonprofit members; ensuring a steady income stream for charitable organizations.
The importance of the platform is that it changes donations from a cost management activity (tax reductions) to a revenue generating activity. In 2013 67% of organizations donated solely to manage cost:
Source: Grant Thorton
By introducing revenue generation into the corporate giving structure, the total donation dollars available will increase because a new channel to market is being introduced and greater access to the socially minded consumer becomes available.
Secondarily, there are still a large contingent of businesses that are establishing their first ever Corporate Social Responsibility programs. It is essential to assist small and medium businesses along this journey to speed up the time to giving for this part of the market.
Source: Better 4 Business
KarmaConnect provides these businesses an ‘out of the box’ corporate social responsibility (CSR) program with full transparency, analytics, and data on their supports through the platform. It’s the lowest, and least time intensive barrier to entry that exists in the market for mid-sized businesses looking to launch a CSR program.
What’s next for KarmaConnect and how you can get involved
At the One Young World Summit 2014 in Dublin I presented KarmaConnect in the final of the Rwanga Social Start Up Competition. Three months later I'm delighted to say that the platform has officially launched and is accepting registrations from volunteers, charities and potential donors. Registration for the platform can be found here.
I remember in Dublin, delegate speaker Michelle Henry reminding us "..the partnership potential in this room is incredible" and she was right. When it comes to KarmaConnect I can't think of a better network of potential partners than the One Young World community of Ambassadors. We're charity leaders, CSR experts, social entrepreneurs and much more. Whether you're a volunteer, a fundraiser or involved in your company's social responsibility I would love to hear from you and find ways of working together to take corporate giving forward with KarmaConnect. Please get in touch with us at [email protected].