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January 3rd, 2008 issue

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By Pavlína Kalousová

A few years ago, the Czech Donors Forum nonprofit group decided to try to improve giving standards in our country.

We started by consulting with some communication and marketing experts. They asked us simple questions: Do you want more money or a better image? What areas are underfunded? What does the public want? How can people easily contribute?

They were simple and legitimate questions, but, at the time, we had no answers. Then our consultants said something we didn’t want to hear: You have to think about how to improve giving standards the same way you sell detergents or bank services — you must know to whom you are selling, what message you wish to deliver, and whether you are looking for new “customers” or just want to get more money from existing ones.

I remember feeling offended. We don’t sell detergents, we sell compassion! But, in the past few years, I’ve realized they were right.

No, we don’t selling detergents, but we can use business and marketing techniques to communicate our most important message — that we want to give needy people better lives.

Public and individual donors

Who are the donors, and how does charitable giving look in the Czech Republic?

Recent surveys show that two-thirds of Czech residents contribute to non-profit organizations. More than 50 percent donate repeatedly. Interest in giving has been rising in recent years – there has been a 10 percent increase since 2004, according to an industry survey.

Czech donors feel sympathy for those in need. They also feel the government is not doing enough for needy people.

Many donors contribute through public campaigns. Some people give big, regular donations for which they receive tax incentives. About $57 million (1 billion Kč) in tax-effective donations were made last year, according to numbers from the Finance Ministry. Individual donors can deduct their donations for up to 10 percent from the tax base.

In the past two years, a few rich individuals also established foundations where, from their private sources, they support public benefit areas like education or building of new parks in communities.

In addition, Czechs are getting more interested in problems in Third World countries, with 27 percent now supporting global humanitarian programs, according to a SC&C survey conducted last year.

Corporate giving

More than 73 percent of companies give to charity, with more giving all the time. We’re seeing more corporate support connected to charity activities and publicly needed areas.

Over the past three years, the number of companies that donate resources for a good cause has increased 12 percent, according to polls.

The concept of corporate giving is changing: Companies are starting to see their corporate involvement as a direct investment in the society where they operate. They’re also starting to connect their business strategies with their giving.

The bigger the company is in the Czech Republic, the more inclined it is toward corporate giving. Many multinational companies now give locally, most commonly by supporting charities for children. Such companies also invest in social areas, leisure activities and education.

As we see an increased number of companies that give, we also see a rise in the resources that companies use to contribute to good causes.

The biggest corporate donors, according to our records, are both Czech and international companies, including ČEZ Group (energy), Česká pojišťovna (insurance company), Mittal Steel and Česká spořitelna (Erste Group).

Companies also give in-kind gifts and pro-bono services. In the past year there has also been a boom in engaging employees in community activities (mainly through volunteer programs or payroll giving).

This comes in two main forms — either workers donate expert time to nonprofit groups or offer their labor to work with clients.

For example, the Czech Donors Forum launched a new employee engagement service where we help companies set up their programs in this area. We now have a number of companies that pay their employees to volunteer for one or two days a year in charity work for the environment or with the elderly, drug addicts, the disabled, or with HIV/AIDS organizations.

Participating companies include T-Mobile, GlaxoSmithKline, Česká spořitelna and Pilsner Urquell (SABMiller).

A growing number of companies are also interested in cause-related marketing, which means connecting their business marketing strategies to good causes.

Such corporate programs often help various communities across the country through smaller grant schemes or volunteer activities for small charity groups.

Rule No. 1: Make donations a ‘normal’ thing

Sometimes when I meet charity groups like ours in other Central and East European countires, they complain about how giving is undeveloped in this part of the world. They complain that most companies are only willing to give footballs as donations, for example.

Of course it might be true, and things might seem miserable now. But the role of charities is to come up with solutions and models that will motivate donors to give in the future.

We find that many companies and individuals who do not give have never been adequately asked. For example, many Czechs who donate regularly say they were “stimulated” by a charity appeal for help.

At the Czech Donors Forum, we discuseed why people were willing to spend a lot of money on new mobile phones, dinners in fancy restaurants or text-message voting on their cell phones for people on some reality TV show. We also noticed that some companies are willing to invest incredible amounts of money into various sports events.

We realized the donor community does not always communicate well. That’s when we decided we should use more professional marketing and communications methods.

Based on recommendations from our experts, we started to come up with products for donors to use (both individual and corporate), including the program to help get employees involved in volunteering (mentioned above). We also started to assist grantmakers. More than 1,000 corporate employees were involved in volunteering this year, as a result.

Rule No. 2: New models and products work

But we still wanted to address the statistics that show that people do not give because they feel they were never asked to give.

We also wanted to make giving simple. We find there is often a long period between people being exposed to a charity appeal and the moment they go to the bank to get money to make a donation.

We also wanted to make sure there was transparency in the donation system. People must know where their money goes and what it’s really spent for.

What we decided to support is the Donors Message Service, or DMS. It’s a service in which donors can use SMS text messaging on their phones to make donations.

In the Czech Republic, DMS is a mutual project of the Czech Donors Forum and all telecommunication operators (Telefónica O2, T-Mobile and Vodafone) and the DMS service.

This service operates on noncommercial principles. Since the DMS Service was launched in April 2004, more than 120 foundations and nonprofit groups have participated. All together, more than 5.6 million DMSes have been sent in the Czech Republic (a huge number, considering we have 10.2 million inhabitants).

Donors have raised more than $7 million so far in areas such as helping physically disabled people, homeless people and refugees, and giving money to environmental protection, monuments and disaster relief.

As DMS became so popular, the government prepared an amendment to the value-added tax law to address it. Since January 2006, there is no VAT charge on donations through DMS in the Czech Republic.

Why is DMS so successful? In our marketing and communications, we focused on making giving easy and transparent. But we also motivated nonprofit groups to communicate with potential donors. When we polled donors, we found the majority of people using DMS had never contributed to charity before.

Rule No. 3: We are the ones who create giving trends

So where does this leave us?

Trends are exactly the same as we expect them to be. Just as we have increased interest in charity projects through DMS or through getting hundreds of companies to volunteer, we can develop and promote any other area and attract donors to it.

We just need to build our work on knowing what people’s motivations and attitudes are.

The role that the Donors Forum can play is to understand the environment for giving, to connect different groups and stakeholders, to bring innovative models for giving and to acknowledge and reward best practices.

I believe that if we are all smart enough and open enough (like listening to the communication people selling detergents), we will be able to make giving a trend. If we are also creative, it can be fun for us and for the donors as well.

— The author is the executive director of the Czech Donors Forum and a regional tutor of the Central and Eastern European Network for Responsible Giving.

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