Outdoor clothing company Patagonia is committed to the environment—that's why their philanthropy primarily supports organizations working on environmental issues. Each store, as well as Patagonia headquarters, gives away grants totaling at least 1% of the company's annual sales each year.
How you can do it
Andrea Barnes from Patagonia's Portland location shared some tips on how their interesting program works:
Get support. Patagonia's philanthropy has existed for almost as long as the company itself, but folks starting this kind of program now will want to make getting buy-in from senior leadership and other departments a first priority.
Decide who and what you want to fund. Patagonia's natural ties to the environment helped shape their funding philosophy, but their focus does extend to include other small, grassroots nonprofits who use direct action to achieve their goals and whose work might not otherwise receive a lot of attention. As important as it is to decide what to fund, you should also think through what you don't want to support. For example, Patagonia doesn't fund events (unless they're built into programming expenses) or litigation, and shies away from funding that's very salary- or printing-heavy.
Decide how much you want to give. Patagonia's Portland store donates about $34,000 each year. Individual grants typically range from $3,000 to $6,000—an amount that's often pretty significant to the small organizations they fund.
Design your application process. With Patagonia, nonprofits can apply online, in a process that begins with an eligibility quiz.
Decide who will review applications and how. In the Portland store, a team of six employees volunteer to read applications and select grant recipients—though depending on how busy the company has been and other factors, the review process has at times operated differently. One adventurous iteration led the team to read and decide in one day!
Think through how you want to work with grantees. You may want a lot of contact with grantees, or just a little, depending on your program. Patagonia simply asks for credit and that organizations stay in touch.
Supporting those you don't support. Of course, there's no way any company can fund every grant application they receive. When Patagonia doesn't wind up funding an organization, they usually offer them another form of support, like the opportunity to table at a Patagonia store or to share the org's message on the company's social media.
Since their program began decades ago, Patagonia has given away over $55 million to more than 1,000 organizations. Because they choose to support smaller organizations, the impact of their grants is often strongly felt, perhaps more than a grant of the same size to a larger organization.
Patagonia's grant program is a great way for the company to interface with their community, as it could be for any business and their base.