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Why Charities Don't Want Your Money

Why the Salvation Army doesn't want your nickel.
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The Sports Section in Duluth, Ga., has a track record of philanthropy. The company, which sells souvenir photos of kids at sporting events, began giving free coupons to YMCAs and the local Special Olympics years ago. By the time sales hit $20 million, Joe Lindenmayer, a vice president, was looking to partner with a national charity. In return for donations, he figured the Sports Section would get a promotional boost. Problem was, fundraisers demanded $50,000 or more up front. When Lindenmayer offered only $20,000, they flat out rejected him.

"A popular non-profit can demand a lot."

Daniel Borochoff, of the American Institute of Philanthropy in Chicago

His experience was no fluke. When it comes to philanthropy, private companies often find that beggars can be choosers. Charities prefer to work with large businesses because their marketing has greater reach--and they pony up more cash. Entrepreneurial companies also lose out if the markets they serve are so specialized that they are of no interest to a nonprofit. Maj. George Hood, who runs business partnerships for the Salvation Army, was recently pitched on a deal with a flashlight-battery maker. "I couldn't see any way manufacturing flashlight batteries was going to further the cause of helping the poor and needy," he explains. "That's not the kind of product I want to put the red shield on."

None of this means that entrepreneurs should drop the idea of giving through their companies. A 2002 Cone Communications study found that 53% of holiday shoppers surveyed planned to buy from retailers that support social issues. A partnership can also improve employee morale.

The Sports Section did end up finding a national nonprofit that was willing to partner: the Make-A-Wish Foundation. When the charity arranges for children with life-threatening medical conditions to meet athletes or celebrities, the Sports Section supplies photography services free of charge. The firm plans to donate "in the mid six figures" over the next five years in exchange for the right to use the charity's logo. Make-A-Wish's April Selman says she decided to join forces with Lindenmayer because he showed "as much of a commitment to the kids" as the nonprofit does.




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