Business people often overlook advantages to their companies of charitable giving
and corporate sponsorships.
I recommend building philanthropy into every
business plan. Integrate it into the marketing and advertising section. Do not
treat philanthropy as an afterthought.
Corporate giving builds name
recognition and raises corporate profiles, brand awareness, good feelings and
image enhancement. Gifts are tax deductible and influence legislators and
opinion makers. Giving improves the quality of life in a community and betters
relations with employees.
Doing good deeds scores points in Heaven, and
even companies can benefit from a helping hand once in a while.
management initiates corporate philanthropy for altruistic reasons and out of
self-interest, according to the Foundation Center. The most popular means are
grants, direct donations of money and branded premiums such as clothing and
pens, matching funds to employee donations, ads in NGO ad books, foundation
support and event sponsorships.
Nonpublic companies hesitate to publicize
their gifts due to fear of being inundated with requests. Good times raise
public expectations. Lean economic times lead to disappointment, and some
shareholders will resist corporate-giving programs when profits slim down. Good
intentions can be punished with bad publicity for corporations funding
controversial organizations and causes. Department store J.C. Penney withstood
pressures to fire a very popular, lesbian entertainer as Penny’s spokesperson
and took a lot of flak. Businesses need a corporate-responsibility plan to
anticipate and exorcise downsides.
Rick Moyers, an expert on nonprofit
organization management, cautions that management can be mislead without due
diligence before associating with a charity. Vet potential recipients with the
same effort you would use buying other businesses or expanding into new
Engage recipients in conversation, and attend some events before
making a commitment. It is not disrespectful to ask pointed questions for
financial data and background information about board members and employees, to
research for controversy surrounding the issue and the organization and for
legal standing of the charity. Get feedback on the effectiveness of the charity
in achieving its goals from employees at the charity.
The generosity of
corporate gifts is measured as a percentage of annual profits and the absolute
dollars donated. In 2011, author Greg Emerson challenged readers “to see if your
favorite brand made the cut” to be in the top 10 most charitable US companies.
Brand is the operative word.
Among the top 10, Kroger food stores gave up
to nearly 11 percent of annual profits to charities. Most companies hover in the
5%-8% range, including Macy’s, Safeway and Dow Chemical.
philanthropy topped $18 billion in 2012, a generous amount. However, Ken Stern,
former CEO of National Public Radio and author of With Charity for All, said
corporate philanthropy is trending downward, with 2.1% from profits in 1986 to
0.8% in 2012. Corporations play a very small role “in charitable giving in the
US, now comprising only about 6% of private-sector donations and only a little
more than 1% of the $1.5 trillion charitable economy.”
Corporate life in
Israel is young but vibrant, pulsating with energy, the core of a stable and
Dominated by Jewish people, whose traditions value
tzedakah, it is disheartening that Israeli corporate contributions are
Maala is an umbrella organization of 130 of Israel’s largest
companies promoting corporate social and environmental responsibility (CSR).
They reported a pattern closely paralleling the parsimony of American companies.
Some 1.2% of profits is the average corporate philanthropic giving rate, with
most donating lower percentages. Strauss gave NIS 10 million and Osem nearly NIS
8m. in one recent year, or 2% and 1.66% of their profits, respectively. Some
include in-kind contributions of food from grocery chains (most likely valued at
retail prices) rather than cash. Several value volunteer hours of their
employees as donations.
Charities received NIS 5m. (about $1.5m.) when
Waze sold out for nearly $1b.
This one-half of 1% contribution earned
Waze praise for “spreading the wealth,” as one news headline
Hardly, but it is tough to buy better press.
wrote: “Making philanthropy effective is terribly difficult work, and no doubt
some companies – maybe even some of the ones that seem stingy – do it better
than others. But in the corporate world, as elsewhere, nothing speaks
louder than dollars.”
IBM credits its corporate giving with increasing
employee engagement in community affairs, reducing employee turnover and skill
development, strengthening customer relationships and opening new markets. Their
giving is good for others, good for them, and IBM is good at it.
business might sponsor a local soccer team, a girls swim night, a marathon run
for charity, the cleanup of a river bank or an all-night learning session for
students. Place the company logo everywhere. Create opportunities for name
recognition. The Nike swoosh is everywhere, and it is the most successful
example of brand building.
Keep in mind Ralph Waldo Emerson’s blessing:
“It is one of the most beautiful compensations of life that no person can
sincerely try to help another without helping themselves.”