Businesses continue to find ways to give back

How about a little good news? In the fall of 2009, the Committee Encouraging Corporate Philanthropy, an international forum of business CEOs and chairpersons, released its 2009 report “Giving In Numbers.” It surveyed 137 companies, including 55 of Fortune’s 100 largest American public companies. Despite the economic challenges of 2008, contributions of cash and product totaled some $11.25 billion, which in terms of aggregate giving was only slightly lower than in 2007.

Small and mid-size businesses are probably thinking that a corporate giving program may be nice to offer, but “my profits are down and cash is tight – giving is not a priority” or “I believe in giving back to my community, but realistically I do not have a lot to give.” Before answering these concerns, let’s first talk about “why” companies give.

Why give?

A company’s motivation for giving is as varied as the ways it can give. Giving programs are initiated solely for commercial gain, anticipated sales increases or to help acquire a big client. Other motivations are for purely charitable purposes and a company’s belief in its social contract with society. Giving programs can also be a component of a proactive and strategic community investment. Very often, however, corporate giving is a combination of some, or all of the above.

The benefits of corporate giving are equally as varied and can be categorized as an internal or external benefit. The obvious and primary external benefit is the good you do for the recipient organization and the clients it serves. Additional external benefits can include greater and positive public visibility, increased consumer loyalty and increased sales. Programs can also lead to new or improved relationships with key community leaders, officials, suppliers, retailers and other businesses.

Internally, corporate giving can build a strong and positive company culture through the creation of a cause or purpose to rally around. Also, programs that provide employees with opportunities to perform community service can be a morale booster, an advantage in attracting and retaining employees, and a vehicle for leadership development.

How to give

Some of the more traditional means by which a company gives and which continue to remain strong are:

Corporate giving program. A company or business makes charitable donations or grants from its annual operating budget without a separate endowment or budget. These are usually administered by a staff member and directed by the CEO or an advisory committee.

Corporate foundation. An independent, tax-exempt private foundation that is usually set up with an initial endowment, to which the company can add future contributions.

Corporate fund. A company creates its own donor advised fund at a community foundation or other institution of its choosing.

Employee matching program and federated funds. A company assists and encourages employees to make charitable donations by matching employee gifts of cash or by organizing workplace giving programs and by facilitating payroll deductions for charitable gifts.

What to give

Now that the benefits of a corporate giving program are clearer, there is still the question of “what” and “how” to give. The economic challenges of the last few years have led to a retooling and rethinking of corporate giving strategies and a renewed focus on some of the less cash-driven methods. We have outlined some of the trends emerging in the area of corporate philanthropy.

If you don’t have excess funds to give, think about the assets you do have. These include the donation of products, equipment and pro bono hours of skilled labor, or the use of your facility for events, meetings, programs or storage needs.

Create an employee volunteer program or day of service. If you don’t have the staff or resources to develop, implement or manage this type of project, organizations like The Volunteer Center of the United Way can help.

The center is a nonprofit focused on matching volunteers with the needs of some 600 nonprofits in Westchester and Putnam counties. In its last fiscal year, it planned more than 1,200 volunteer opportunities. It also provides training and support for the creation of volunteer programs for nonprofits and companies. The center’s corporate department has seen an increase in demand. Alisa Kesten, executive director of the center, said that “in the last fiscal year, we partnered with over 15 local companies, both small and large, to create 60 volunteer projects and over 1,600 opportunities for employees to make a meaningful difference in their community.” (See http://www.volunteer-center.org for more information.)

Making an impact

For your giving to have maximum impact, design a program around your business mission and core strengths and align the program with the interests of your constituents.

Take the example of one Westchester resident, Kraft Foods. While its giving levels have remained the same year to year, Kraft has become more strategic with its global corporate giving efforts. “As the world’s second largest food company, we’re committed to combating hunger and encouraging healthy lifestyles … by leveraging our nutrition expertise and the intellectual capital of our employees, we can advance solutions that bring sustainable community benefits,” said Nicole Robinson, director of community involvement.

Kraft has put this strategy into action by working with national nonprofits such as Feeding America to launch 25 Kraft-branded mobile pantries in communities across the U.S., providing some 1 billion servings of fruit and vegetables. By “branding” its philanthropic programs, collaborating with partners with global outreach and creating an internal culture that encourages employees to give back, Kraft has been able to make a larger impact. During Kraft’s first “Make a Delicious Difference Week,” this past fall, some 12,000 employees in more than 33 countries, including top management, volunteered for projects to benefit some 600,000 people, while Kraft’s retail partners supported local food banks.

Other considerations:

• Create trust with your core constituents by designing a program that is authentic and transparent.
• Focus on long-term impact.
• Think about collaborating with other donors to increase impact and address a community issue in a systemic way.
• Target your giving so that your contribution will promote the sustainability of the organization or cause.