Charity means business at Midland Bank, which has rewritten the rules on
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
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
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
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
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
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
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
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
Youth, the elderly and disability sectors met Midland’s criteria on
media and public appeal, marketing potential and social or political
Contenders: Prince’s Trust, Turning Point, Fairbridge, Drive for Youth,
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
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
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.