from: SAM STERNBERG samsam@vm1.yorku.ca subject: BUSINESS
FUNDING FOR FREE-NETS Free-Nets, especially at their start
up, will probably have most of their financial and material
contributions coming from institutions and businesses. This
brief paper provides an overview of the potential and the
techniques involved in seeking support from businesses. This
material is targeted to freenets in large urban areas which
are trying to work with commercial businesses in building
support. Smaller nets will need to work harder but they can
apply most of these ideas. I will cover four topics. WHY
BUSINESSES GIVE SUPPORT? WHAT TYPE OF SUPPORT IS AVAILABLE?
SPECIAL ASPECTS OF FUNDING FREE-NETS ADMINISTRATIVE ISSUES
WHY BUSINESSES GIVE SUPPORT? When planning a corporate
funding campaign, there is one basic fact that must be
recognized. THEY DON'T HAVE TO GIVE Companies have no legal
obligation to support non profit activities. Every
contribution represents money that would otherwise have gone
to pay taxes, to pay shareholders, or to reinvestment in
future growth. Charitable support is generally seen as an
"investment". WHAT'S IN IT FOR THEM? Corporate gifts are
rarely altruistic. Companies are looking for a primary
benefit to their community of customers, employees, and
shareholders, and only secondarily to the society at large.
Given this very business-like attitude its easy to understand
that the following are the main reasons companies give. I
list them here in the order they are most often mentioned,
not in the order that matters most to freenets seeking
support. THE BOTTOM LINE ON SUPPORT A: SUPPORTING SERVICES
THAT BENEFIT EMPLOYEES AND THEIR FAMILIES. This is the reason
for support of childcare and alcoholism services, and it
partially motivates united way contributions. Freenets serve
employees and families by improving their access to community
services [like the availability of womens' shelters] or
emergency child care services, community information of all
types, and to direct personal help in the form of moderated
information services. Our services also benefit many of the
organizations that employees and their families may turn to.
B: SUPPORTING SERVICES THAT EDUCATE EMPLOYEES & RAISE
THEIR SKILL LEVELS. While this is usually the motivation for
supporting higher education; Freenets can point out two
related benefits. First, that we are teaching our members a
set of computer related skills that are of growing importance
to business. Freenet members are learning RESEARCH SKILLS,
ONLINE COMMUNICATION SKILLS, AND IMPROVING THEIR KNOWLEDGE Of
A WIDE VARIETY OF INFORMATION RESOURCES, SOME OF WHICH ARE
VERY USEFUL TO BUSINESS. Second, freenets are SIMPLIFYING
ACCESS to information that can be of direct benefit to
business. We are after all simplifying ACCESS TO LIBRARY
CATALOGUES FULL OF BUSINESS INFORMATION. Along with a host of
government data of interest to businesses. This potential can
include licensing information, tax data, regulatory and
legislative information, even general business law materials.
C: PROVIDING PUBLIC RECOGNITION AND PRESTIGE TO THE COMPANY
Most gifts to cultural institutions and the arts are
justified this way. Freenets have a special advantage here.
Any business support can be acknowledged on line and in the
case of support for phone lines, over and over again.
Contributing to the success of a major community service does
contribute to the good will of the general community towards
specific businesses. And freenet are very much cultural
institutions - of a very new kind. D: IMPROVING THE MARKET
FOR A COMPANY'S PRODUCTS This is the main motivation for
corporate support for special events and sporting activities.
Its no accident the beer and cigarette companies love to
sponsor outdoor summer events. In the early stages of
fundraising - this may be the single most important reason
that can presented to firms in asking for their support. The
case for the value to them must be made in a very
professional way. The fundraisers first task is to understand
just what your free-net has to offer your business community
in the way of a marketing opportunity. Freenets offer access
to 3 distinct market segments. POTENTIAL FIRST TIME BUYERS -
people who access the freenet from libraries and other public
sites. CURRENT COMPUTER OWNERS WHO WILL BE UPGRADING - almost
every current owner will be upgrading. DECISION MAKERS WHO
WILL INFLUENCE THE PURCHASES OF THEIR FIRM - In the early
stage of fundraising, you should focus on this last catagory;
when going after your major equipment needs. Freenets seeking
donations of equipment are in a very strong position to offer
a real marketing opportunity to potential donors. This is
true automaticly. Our members will include a large number of
people who will be purchasing systems for businesses in the
future. We will also attract business staff responsible for
wide area communications within larger companies. Systems
equipment that works well for free-nets are the best possible
advertisement the competitive computer company can find.
Reaching the freenet membership is far more effective -COST
EFFECTIVE - than a $50,000 .oo newspaper add. And it works
year in and year out. Once the first company donates to you;
you can tell the next company you are going to about the
brilliant marketing decision company #1 just made. E:
SUPPORTING THE PERSONAL INTERESTS OF SENIOR MANAGEMENT
Private companies tend to have their contributions and even
advertising budgets under the control of owners or very
senior management. The vast majority of gifts to "high
culture" are made at the request of senior management. Its
our very good fortune that many of these people are
technically aware. Many are interested in promoting a
technically sophisticated Canada. When approaching private
companies, we should always be emphasising the personal
vision of management in regard to Canada as a technologically
advanced society. Its generally true that a request for
support by a V.P. for Technical Services has a very high
probability of being met, unless the company's financial
straight are desperately bad. F: SUPPORTING GROUPS IN WHICH
EMPLOYEES ARE INVOLVED The vast majority of businesses do not
have either staffing or a formal process to control
contributions. Instead they let the interests of their
employees govern most of their contributions. We are all in
the business of recruiting volunteers. Efforts to recruit
volunteers from the business community will rarely be wasted.
Some Larger companies actually match employee contributions
with a similar gift. The most straightforward way of getting
business volunteers, is to make presentations to business
related associations. Of particular value are presentation
before the many associations of computer professionals. It is
occasionally possible to be adopted as a project by one or
more of these associations and computer clubs. A poll of your
supporters will usually lead directly to several such groups
with whom they are affiliated. G: RESPONDING TO PEER PRESSURE
Many companies don't know who is "real" or worthwhile. Its
reassuring to the management to be told that the big guys
have checked you out and decided to support you. Once a local
corporate leader has contributed, its much easier to get
others to give. If the company officers will make even casual
calls to their peers on your behalf, your prospects are all
the better. H: CORPORATE CITIZENSHIP - MAINTAINING GOOD
COMMUNITY RELATIONS This is the least effective direct appeal
but it figures in most decisions. So don't forget that you
really are creating or running a major new community service.
Since most freenets are not only available from home and
office computers, but also from assorted public sites; its
invaluable to know how many patrons your affiliated libraries
and agencies are seeing each year. This number should be
prominently displayed in your materials and mentioned at
fundraising meetings. It creates "goodwill" for companies
when they are seen as directly benefiting the community by
supporting the freenet movement. Free-nets provide an
excellent opportunity to be seen doing good. Of course these
same numbers are also worth mentioning to companies that
service first time buyers when looking for their support.
Training firms, computer insurers, small system sellers,
etc., should all be approached to cover phone line costs. And
they should all be reminded of the number of potential new
customers who can see them mentioned when connecting to your
free-net. A NOTE ON CORPORATE RESPONSIBILITY AND
IRRESPONSIBILITY Lest this seem to be offering a white wash
of the many problems created or contributed to by bad
business practices; I have no interest in seeing free-net
sell their soul to business. I expect part of every dollar
raised to go toward providing better public access to data
about polluters, fraudulent schemes, self interested
legislative efforts, etc. I just don't believe business is
all bad or all good. As a community information resource we
have a responsibility to display all the faces of business.
The flip side of all of this is something know in the
corporate world as CAUSE RELATED MARKETING. This now
represents about 15% of most larger companies contributions
budget. Business publications have bluntly described its
purposes as "enhancing corporate image, thwarting criticism,
pacifying customers and easing market entry." Every freenet's
directors while have to deal with the ethical dilemmas
involved. My personal view is that we have an obligation to
ask for this money and see that it is used to create a fully
informed public. But, we have to avoid being abused by the
worst of these offers. An example of abuse by a cause related
marketing scheme is this gem. In 1987, just prior to
thanksgiving, American Express spent $50,000.00 on an ad
offering to donate 10 cents to New York MEALS ON WHEELS for
every meal ordered with their card over the holiday. New
Yorkers would have had to order half a million meals just to
match the ad budget. WHAT TYPES OF SUPPORT ARE AVAILABLE? A:
CASH B: SERVICES - LEGAL - ACCOUNTING - MARKETING Most major
firms donate some services. Law firms are often required to
do so. C: EQUIPMENT - GIFTS & LOANS If you can't get
equipment donated - try getting it loaned. If local resources
are poor try getting a preferential price. Freenets by their
nature are not on the cutting edge of computer technology.
Your success rate will be highest if you know the product
lines and consistently ask for last years models. That help
remove dead inventory and convert it real advertising and
goodwill development. D: ADVERTISING Ask companies to work
you into their print adds and handout materials. E: CONTACTS
WITH OTHER COMPANIES As mentioned previously no one has
better connections in the business community than an active
business person. F: FURNITURE Most medium and large firms
have a storage area for currently unused stuff. Ask around -
why spend money on furnishings. G: SPACE Investigate the
possibility of space with the companies having the largest
involvement in your freenet. They can be approached with
space requests for meetings and special events, even for
offices. H: STAFF & VOLUNTEERS Many larger companies
support their employees voluntarism and may be able to help
you do internal recruiting. Phone companies, banks, major
retailers, and major industries are good places to ask about
this. A few companies have even assigned staff to work with
non profits on a part time basis. I: MATCHING EMPLOYEE
CONTRIBUTIONS J: COMPANY MEMBERSHIPS IN "FRIENDS OF FREE-NET"
SPECIAL ASPECTS OF FUNDING FREE-NETS SHARING THE EXCITEMENT
Freenets are an exciting concept. Most health care and
international aid organizations appeal to people's pity. We
are in the wonderful position of appealing to people's
optimism. Make sure that those representing you are visibly
enthusiastic. Enthusiasm is infectious. Choose well spoken
and well informed representatives. Make sure that they
understand business conventions and dress. DIRECTLY
SUPPORTING THE NEEDS OF THE BUSINESS Every freenet will have
a somewhat different policy on business relations and
commercial activities on the net. The more you can
demonstrate that your free-net meets the needs of the
business community, the easier it is to fundraise. I have
written a paper describing what I believe are the major
advantages businesses may get from the existence of freenets
in their area. Its written for business people who are not
telecommunications literate. If you would like a copy;
contact me at: samsam@vm1.yorku.ca Sam Sternberg Toronto
Free-net Committee [ ASK FOR THE BUS.DOC - ITS NOT A TORONTO
FREE-NET DOCUMENT - AND IT ABSOLUTELY DOESN'T REPRESENT BOARD
POLICY -ITS A PERSONAL PERSPECTIVE ] Fell free to modify it
in keeping with your policies and use it as piece for
distribution. Businesses, that understand the direct benefits
they will get from operating freenets, will have a much
higher propensity to support your efforts. EVERY COMPANY HAS
COMPUTER ENTHUSIASTS WORKING FOR THEM Free-Nets are in an
enviable position when it comes to corporate funding. Every
company of any Never tell staff that your prepared to go over
their heads if they don't co-operate. Or threaten the company
with negative publicity. That kind of reaction is just
infantile. When fundraising, you will be asked if company "x"
has contributed. Be absolutely honest. If you asked but
didn't get anything say so. And mention that you hope to
improve your level of volunteers from the company and ask
again next year. Never disparage a potential donor. The
person your talking to may just know and like people in the
firm under discussion. E: BE REASONABLE Accept refusal
graciously. If your analysis of a company's motivation to
support you show that you aren't a primary candidate for
them; start small and build their involvement. Perhaps
starting by making a request for an IN-KIND gift. Or
assistance in recruiting employee volunteers. F: BE PREPARED
Have a financial statement or business plan Have proof of
your not for profit status Provide a list of Board of
Directors and their background List all your current donors
and supporting Institutions Produce an annual report or
progress reports. G: ACKNOWLEDGE EVERY CONTACT IN WRITING.
Its important to thank every company you made a request to,
especially when they REFUSE YOUR REQUEST. Nothing does more
to improve your chances on a second request than someone
remembering the Free-Net as that very professional group
which said thanks for taking the time and we understand the
demands on you funds didn't permit a gift this time around.
H: FUNDRAISING WILL BE A PERMANENT ACTIVITY OF THE FREE-NET
Do it right. Right from the start. Corporate funding can be
especially rewarding because companies often make gifts year
after year. No other source, except your members, can be so
reliable.