Corporate foundations usually don’t have huge endowments. Instead, the relatively small income for grants produced by the endowment is supplemented (sometimes to the tune of seven figures!) by an annual donation to the foundation by the company. This gives the company the flexibility of making fewer grants in lean years and more grants when business is booming.

Ostensibly, the foundation is independent of the corporation. A corporate foundation is subject to the same laws prohibiting self-dealing and minimum grants made from their assets as is a private foundation. This isn’t to say that the mission of a corporate foundation is ever far from that of its company. The board of the foundation is usually composed of high-ranking executives from the company, and its policies reflect the public image the company seeks to project.

Corporate foundations cannot receive tangible benefits in exchange for a grant, just like private foundations. But even a simple acknowledgment such as “This program has been brought to you by Local Widget Company, supplying the community with widgets for 30 years” has a great public relations value. Thus, even an independent company foundation can further the goals of better PR for the company.

To concentrate their influence where it will do them the most good, all but the largest corporate foundations fund only in geographic areas where they operate. Corporations that fund nationally operate nationally, such as Target, Bank of America, and Ben & Jerry’s.

Many of the larger corporate foundations have developed programs to carry their brand name forward in a targeted manner they could not achieve with individual grants. For example, Target sponsors free admission to museums across the country.

One of the more cynical (yet effective) means of targeting corporate philanthropy is to look for companies that have a public relations problem. After BP dumped millions of gallons of oil along the Gulf Coast, any environmental group that had asked for a contribution probably would have received it, but few would have wanted to associate themselves with BP at that time. Many corporations take a proactive position and focus their grantmaking on areas of potential controversy or ongoing PR problems. Several oil companies (even those without major ecological disasters to their credit) focus their grantmaking on environmental causes. Tobacco companies are among the most generous corporate sponsors, and they love to support dance and sports—activities requiring great stamina and lung capacity.

If you consider applying to a corporation in trouble, be sure your executive director and your board know about it before you get started. You don’t want to create your own public relations nightmare by accepting money that would work against your charity’s image.

Grant writers make one of their most common errors in targeting corporate philanthropy by assuming a corporation makes grants in an area parallel to its own business. It can happen, but just as often doesn’t. For example, AT&T Foundation doesn’t fund technology, but instead concentrates on education, specifically decreasing high school dropout rates. Likewise, Gulfstream Aerospace Corporation Contributions Program doesn’t fund science or engineering. It prefers to support historic preservation (a popular topic in its home city of Savannah, Georgia), arts, and education.

Always check carefully in a directory of funders or on the company’s website to find out what a corporation will fund. Don’t waste their time and yours trying to stretch the limits of their guidelines.