Corporate Philanthropy Initiatives Are Good For Business
Corporate philanthropy is on the rise, with businesses both large and small considering their stance as a member of the wider community as well as their bottom line. The world we live in is changing at a meteoric pace and a new generation of consumers and employees are entering the corporate arena and inspiring change; demanding change.
The Internet is awash with chatter surrounding the millennial generation – their differing outlook compared with their predecessors about work and life – and one of the most prominent trends to emerge is their demand for taking less and giving more in all respects.
A recent study from the Reputation Institute shows that increasing community engagement is one of the most effective means by which a company can improve its overall reputation, but don’t just take their word for it. You only have to look at the likes of Facebook CEO Mark Zuckerberg (America’s top philanthropist in 2013), Berkshire Hathaway chairman and CEO Warren Buffet and Microsoft founder Bill Gates and his wife Melinda to see that a philanthropic outlook can help build upon the reputation of your business.
With this in mind, the number of companies introducing philanthropic programs to their agenda is growing on a daily basis and those that are ignoring their corporate responsibilities are being left behind at best and boycotted at worst. So its high time people stopped thinking of these values (philanthropy versus profit) as competing or mutually exclusive. In fact, they are often symbiotic.
According to the Reputation Institute study, the philanthropic nature of a business and the breadth of its corporate citizenship initiatives, often directly correlates with its overall value. According to the study, a 10 percent improvement in perceived corporate citizenship can translate to an 11 percent improvement in overall reputation, and up to a 14 percent improvement in a company’s market value.
It goes without saying that corporate philanthropy can be good from a marketing point of view, thus boosting brand recognition and customer engagement, but a number of studies also suggest that it can bring with it a number of additional rewards. For example, companies that engage in philanthropic pursuits are deemed more likely to attract top talent and enjoy positive corporate cultures. When happy people translate to bottom line results, the plus points are clear to see.
Now is probably a good time to point out that companies shouldn’t embark on a journey of philanthropy purely to increase brand awareness or profits – that goes against what it means to be socially conscientious in the first place. However, all companies should work to address their community’s social problems because the companies are, in fact, important and influential members of the community.
A company’s employees, customers, services and products impact the community in both positive and negative ways. Solving social issues in any community is done best through cross-sector partnerships and companies should strive to be part of the solution. The fact that these engagements can lead to positive business growth is great, but it should not be the driving factor.
So how should companies structure their community engagement programs? What are the keys to effectiveness? What are the metrics for success? A company’s approach will vary greatly based on its size, culture, location, employee base, industry and so forth, but here are a few commonalities among successful corporate citizenship initiatives:
ALIGN YOUR PHILANTHROPIC VENTURES WITH THE GOALS OF YOUR BUSINESS
Before deciding which philanthropic pursuit to follow, it’s a good idea to think about a program or scheme that aligns with the goals and expertise of your business. As an example, many technology companies focus on opportunities within their field such as donating equipment to schools or charities. Another good example of this is the work that Starbucks does with the local communities growing their coffee beans and tealeaves. This kind of philanthropic pursuit not only makes sense to the business, but also directly gives back to a community on which Starbucks depends – it’s all about give and take.
INVOLVE YOUR EMPLOYEES
“The best way to encourage volunteerism and employee giving is to develop a culture of proactive giving from the top down,” says Sid Espinosa, Microsoft’s director of corporate citizenship. By getting your employees involved in the philanthropic side of the business, not only do you promote a culture of giving, but also retain your top talent. It’s a win, win situation.
FORGE MEANINGFUL PARTNERSHIPS
“Look to take an active and transparent role in maximizing your company’s interaction with – and understanding of – a given initiative. Rather than passively handing out grants to check off an obligatory philanthropy box, focus on actively engaging with an organization to build an impactful, long-term partnership. Take an active role in developing the policy that dictates the relationship. Help with product gifts, volunteerism, employee giving, event hosting, and visibility opportunities (to name a few) to ensure that yours is a fruitful partnership,” says Espinosa. By forging meaningful relationships rather than just signing a check every now and then, you are giving a lot more back to the respondent.
Last but not least it’s important to have fun with your corporate responsibility initiatives to derive the most from them. Engage your entire workforce and customer base where appropriate and try and think outside the box when it comes to creating initiatives. Challenge those around you to come up with something memorable, fun and unique.
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