Business World Could Boost Non-Profits by Donating Skills

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By TONY BUZZELLI

It’s no secret that L.A. non-profits are struggling to fill the gap between increasing community needs and decreasing cash donations. The recession has squeezed the amount of capital businesses can contribute. However, corporate donors have another worthy asset to offer that is being overlooked: the skills of their work force, or what I call “intellectual capital.”

Los Angeles is home to more than 40,000 non-profit organizations, many of which are struggling to survive. If corporate donors and non-profits continue to follow a one-track, “show me the money” approach, both parties will leave value on the table. However, if corporate philanthropy is expanded to include workplace talent creating a valuable reserve of financial and intellectual capital both parties can do far more good for communities in need.

According to the 2009 Deloitte Volunteer Impact Survey, 95 percent of non-profits need more skilled volunteer support. And 78 percent of corporations polled agree their employees’ skills would be valuable to non-profits. Yet, only 50 percent offer skilled support.

Research from the Taproot Foundation, an organization that promotes pro bono service, further illustrates the untapped potential of skilled volunteers. Taproot evaluated the L.A. market before launching a chapter here last fall and found that more than 300,000 professionals in the greater metropolitan area possess certain skills, including marketing, human resources and others, needed by local non-profits. However, few are volunteering these services. L.A. businesses are sitting on a gold mine of intellectual capital that has yet to be tapped.

Let’s be honest: The need for cash is legitimate and undeniable. However, as corporate donations continue to shrink, the time has come to adopt pro bono as a complementary giving strategy. Nearly 40 percent of non-profits surveyed will spend upwards of $50,000 for outside business consultants in 2009. If they instead secured pro bono support, they could free up those funds for other uses. Simply put: Pro bono makes money go further.

It’s especially valuable when you consider that charitable organizations despite most of them being tax-exempt, not-for-profit entities still face real business challenges.


Tax guidance

Take the L.A.-based Starlight Children’s Foundation, for example. To provide education, fun and distraction for its patients, Starlight purchases thousands of mobile entertainment units for hospitals across the country transactions that carry extensive, complex tax-filing requirements. To help Starlight manage its tax liability and streamline the administrative burden of filing taxes in all 50 states, Deloitte advised the non-profit on a distribution project for the units. In addition to providing tax consulting services pro bono, Deloitte has offered assistance that might help Starlight save on tax consulting fees related to their program over the long term.

The organization wouldn’t have been able to complete the restructuring project on its own, says Bill Misenhimer, Starlight’s executive vice president of finance, adding that Deloitte’s assistance has made the continuation of one of Starlight’s major services for sick children much more viable.

So why the slow adoption of pro bono, even though 95 percent of non-profits said they need more of it? One likely reason is that both sides cite significant barriers to the effective giving and getting of skilled support, given its inherently sophisticated nature. But these barriers are not insurmountable.

Corporate donors can talk with grantees about what intellectual capital their employees can offer. Non-profits need the most help in marketing, legal and strategic planning, but, according to Deloitte’s survey, 95 percent don’t know which companies to approach for help. Those are areas in which almost any large company has experience.

Second, they should offer a signed commitment. Companies generally follow through with cash contributions but many non-profits have felt the sting of unfinished pro bono projects before; 88 percent see the lack of a formal commitment as problematic.

Non-profits can also take important steps to increase pro bono support.

They must be ready to accept skilled support. Deloitte’s survey found that non-profits are better equipped to cultivate cash versus volunteers. So, non-profits should have qualified staff or board members solicit and oversee pro bono engagements in their areas of expertise.

And when negotiating sponsorship contracts, they must think beyond the cash mentality and recognize pro bono as an asset that should garner benefits treat it as the valuable currency it is.

Despite the economic downturn, we still have priceless capital at our disposal: the intellectual capital of our work force. And when we contribute it through pro bono service, we are trading in a new currency that can make a real, positive impact on the L.A. community.


Tony Buzzelli is the L.A. office managing partner and regional managing partner, Pacific Southwest, for Deloitte LLP.

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