Fundraising publications have recently claimed that corporate transactional giving — simply writing a check — is being reinvented into transformational giving — supporting social causes through involvement as well as investment — but the idea of transformational giving is not new.

The earliest known example of corporate transformational giving in the United States was the 1758 opening of a school for black children in Philadelphia by Bray & Associates. For many years before this, Benjamin Franklin had made a name for himself as a leading philanthropist in the colonies, helping to launch libraries, learning societies, the Pennsylvania Hospital and Pennsylvania State University. His charitable nature caught the attention of Dr. Thomas Bray and his associates, and Franklin was called back to England to sit on the board of Bray & Associates with the full assignment of leading corporate philanthropy.

It is not altogether surprising that Franklin should have been asked to give advice and aid. He already was well known as a social philosopher, interested in philanthropic movements and a follower of the philosophy of Shaftesbury in his “Characteristics,” which says, “To love the public, to study universal good, and to promote the interest of the whole world, as far as lies in our power, is surely the height of goodness.”

Transactional Philanthropy

How then did corporate partners become the check-writing machines of the 1980s and ’90s? Perhaps it was in response to the rapid growth of nonprofit causes asking for their support. With the dramatic rise in golf tournaments, galas, 5K runs and other flashy fundraising events, generous businesses wanting to impact their communities began making donations in exchange for marketing, name recognition, tickets and networking opportunities that offered captive audiences that might otherwise be unattainable. The transaction phase was born.

The notable movement to (or back to) transformational giving seems to be driving targeted funds to nonprofit organizations that share the goals of corporate donors.

In the article “Doers, not Donors,” located on the web site of the Association of Fundraising Professionals, Mary Ellen Collins said that businesses are giving to fewer causes, but they are giving in greater amounts.

“Companies are becoming more strategic in how they can achieve their goals as profit-making entities while also embracing their commitment to social responsibility,” she wrote.

Collins noted a more meaningful trend: “The median number of nonprofit partners per corporate grant maker declined each year from 2010 to 2013 whereas grant sizes increased each year as companies focused societal investment dollars on strategic community partners.”

She explained, “Businesses today are less likely to see the differences between their motivations and those of the nonprofit sector and more likely to see themselves as equal players in solving societal problems.”

Corporate Investment

According to the 2015 Giving USA Survey, corporate charitable dollars account for approximately 5% of all charitable giving each year. A $360 billion industry, the nonprofit sector depends on corporate support and partnerships.

As generous business decision-makers wrestle to prioritize their philanthropic support, they are seeking like-minded partners to link elbows with. Many business leaders are rolling up their sleeves and getting involved. Businesses are supplying in-kind product donations and volunteer time from their employees as well as much-needed capital. In exchange, they are seeing the needs of their communities (both globally and locally) and finding ways to make a difference.

Corporate giving creates stronger communities, better educated consumers, healthier patrons, stronger infrastructure and greater potential revenue. The theory of giving something to get something might just be the motivation behind the charitable decisions of many savvy corporate leaders.

Whether choosing to transform educational opportunities, social justice, health, the arts, hunger, housing or something else, the combined resources of the nonprofit sector and businesses is trending to a more meaningful and impactful relationship than ever.

Laurie Harrison is the director of development for Loyola University Maryland’s Sellinger School of Business and Management, which has a campus in Columbia. She can be reached at lharrison1@loyola.edu.