TECHNIQUE: SPONSORSHIP; Good cause better effect

Charity means business at Midland Bank, which has rewritten the rules on

giving.

Charity, benevolence, altruism - bah, humbug! Call it what you will,

philanthropy rarely fails to demand a generous quid pro quo.

The Victorian muck and brass barons may have built the foundations of

Britain’s welfare system but they made damn sure their names went over

the hospital doors.

Today, as their crumbling monuments give way to shiny new medical units,

commerce too is polishing up its charitable notions. Among the leading

proponents of modern ‘Enlightened Self-Interest’ is Midland Bank.

ESI is hardly less euphemistic than its Victorian equivalent but its

practitioners are a great deal less hypocritical. Behind the inevitable

acronym lies a frank appreciation of the commercial benefits of

corporate charitable giving and consumers really do care.

Next week Midland will announce three-year partnerships with Shelter, Age Concern and National Deaf Children’s Society, a package of donations

worth over pounds 1m. It follows a year-long review of the bank’s

donations policy, culminating in a shoot-out between 14 shortlisted

charities. So much for the chairman’s wife.

The cultural change in the charitable market and at Midland is massive.

In 1993 NCH Action for Children surveyed 100 senior PLC marketers, nine

fund managers and five fund-holders on their attitudes to cause-related

marketing.

Four-fifths of people recently involved in cause-related marketing said

that it was more important than two years before. Of all those who

expressed an opinion, 64% rated it as ‘very effective’ or ‘quite

effective’ as an enhancer of brand image, 74% of company image and 48%

of brand loyalty. But the report also found that a ‘remarkable 72% of

PLCs sampled did not have a company policy about cause-related

marketing’.

Midland was hardly a shining example - at least until autumn 1994. ‘Both

the sponsorship and charitable giving were unfocused, incoherent,

fragmented. We weren’t getting a commercial return for it,’ says Belinda

Furneaux-Harris, who joined last year as sponsorship and donations

manager, one of a new band of specialists in a department traditionally

staffed with bankers.

She elaborates: ‘If you don’t have a properly defined policy you can’t

say what it is you do. You can’t create recognition either internally or

externally.’

Of 1400 requests received centrally - in addition to divisional giving -

Midland responded to just over 200 with an average donation of pounds

1000. It did have a policy of sorts - a five-page document covering not

only charitable giving but sponsorship as well, typifying the common

confusion of two very different disciplines.

Charitable giving, unlike sponsorship, is exempt from VAT and

corporation tax. A donation may generate low-level publicity but any

activity designed to exploit it, particularly advertising, immediately

forfeits the relief. It all hangs on the quantifiable commercial benefit

to the donor.

As Furneaux-Harris says: ‘After a while you get a gut feel for what you

can and can’t get away with.’

Though charitable giving may extend into sponsorship - Midland will be

considering joint commercial ventures under a separate budget - the main

aim is to create the glow of good corporate citizenry through mutually

beneficial partnerships.

If Midland is the model ‘client’, the recipient of its largest donation,

Shelter (pounds 180,000 a year), is the model service provider. The

brand name, say its marketers, has 85% awareness. They’ve done lifestyle

profiles of 100,000 supporters to identify which companies have the most

to gain from supporting it. And Shelter is set up to handle accounts

like an agency.

‘You’re not just competing against other charities but against all the

other marketing spends,’ explains Shelter business development manager

Sam Rider. ‘Everyone - charities and companies - is having to be more

accountable.’

There are almost 180,000 UK registered charities. A new one starts up

every 15 minutes of the working day. But corporate giving is growing at

a mere 0.3% annually and represents on average only 0.02% of a large

company’s profits.

Midland’s new 30-page charity policy document tightly defines not only

the whys of corporate benevolence but the hows - central giving,

divisional budgets and staff fund-raising - and the whos.

It analyses the strengths and weaknesses of possible charity areas. The

unsuccessful ‘children/babies’, for example, won points as top cause for

charity giving and promoting corporate responsibility but failed as a

cluttered market where it would be difficult to achieve share of voice.

Youth, the elderly and disability got the vote. Next Furneaux-Harris

shortlisted charities, screening their activities, patrons and support

from rival financial institutions (the Midland deals are exclusive). An

income ceiling of pounds 17m would ensure the bank’s importance to the

charity.

It then invited 14 to pitch a specific project - one with national and

local relevance that allowed for employee participation. ‘The rigour of

the preparation and pitching process was almost unique,’ says Paul

Finnis, corporate fund-raising manager of Age Concern.

Dorothy Copping, director of fund-raising for the unsuccessful

WhizzKidz, goes further: ‘We are all being made to fight for our money

and it really makes us define our commercial proposition. What the

Midland did was so focused it blew my socks off.’

Further returns for the charities include spin-off fund-raising from

Midland corporate hospitality and its credit card loyalty scheme,

Choice, plus PR to the three million readers of its customer magazine.

In year two the partnerships will move into staff and divisional

activities and VATable joint ventures. ‘It could be sales promotion. It

could be direct marketing. It could be anything,’ says Furneaux-Harris.

Her budget is little more than last year and lower than that of the

three high street banking rivals, but that’s not a concern. ‘We’re

channelling the resources, not giving it to some vast vacuum of money.

We know how many people we’re going to help over three years and can

gear up objectives every year as the partnership grows. We have a very

focused project.’

MIDLAND’S SHORTLIST

Youth, the elderly and disability sectors met Midland’s criteria on

media and public appeal, marketing potential and social or political

topicality.

Youth

Contenders: Prince’s Trust, Turning Point, Fairbridge, Drive for Youth,

Crimestoppers, Shelter

Winner: Shelter

Shelter was founded in 1966 and is now the UK’s largest charity

providing practical advice and care for the homeless. It has an income

of around pounds 11m and expects to raise pounds 600,000 through

business support over the next year.

Midland is donating pounds 180,000 a year to the first ever national

advice network for young homeless people. Over 90,000 people will

benefit directly and through ancillary activities, including a schools

educational programme.

Elderly

Contenders: Age Concern, Help the Aged, The Abbeyfield Society

Winner: Age Concern

Age Concern was founded in 1940 and is the biggest provider of direct

services to over ten million elderly people. It is a federated

organisation with 1400 groups around the country. Age Concern England,

the regional mother house, generates pounds 13.5m a year around pounds

1.5m of which comes from corporate giving.

Midland is donating pounds 100,000 a year to a new nationwide campaign,

Safe & Warm which will address isolation, the cold and personal security

as they affect the elderly. It will help 25,000 people during the three

year period.

Disability

Contenders: British Dyslexia Association, Whizz Kidz, National Deaf

Children’s Society, John Grooms Association for Disabled People, Sense

Winner: National Deaf Children’s Society

NDCS was founded in 1944 by parents concerned about education for deaf

children. It has an income of around pounds 1.7m and last year raised

pounds 70,000 in corporate donations.

Midland is giving NDCS pounds 65,000 a year to fund a nationwide mobile

exhibition of information and technology, The Listening Bus. NDCS does

poorly with low income families and with ethnic minorities. The

Listening Bus will enable it to reach out to a much broader audience.

This article was first published on Marketing