Corporate philanthropy

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Being a good corporate citizen is not only the right thing to do, but it’s proving to be an essential business tool in the competitive market. Those companies that embrace corporate philanthropy find that they are not only creating social change in the communities where they live and work, but also are reaping the unintended benefits of strong return on investment (ROI) to their business in multiple areas.
The evidence of ROI can be found in improved staff recruiting and retention, skill development and loyalty. For example, a Walker Information survey conducted in 2002 found that customers of a business that is rated positively based on its philanthropy program are three times more likely to be loyal to the business than customers who are less impressed with the company’s philanthropic efforts. They also found that corporate philanthropy had a positive impact on employees. Workers at companies with positive rated philanthropy programs are four times more likely than their counterparts to be loyal to the employer. Similarly, shareholders of these positive companies were three times more likely to be loyal.
A survey published by Sirota Survey Intelligence in May reinforced these notions in the broader context of corporate social responsibility (CSR). The survey found that employees who are satisfied with their company’s commitment to CSR are more engaged and positive. These employees also have positive views about their employers in several other key areas — including its sense of direction, competitiveness, integrity and interest in their well-being. “Businesses that recognize the value of social responsibility often have employees who tend to be more satisfied with their jobs, adopt similar values, and become more committed to achieving success within the industry,” said Douglas Klein, president of Sirota Survey Intelligence.
While some CEOs of the world’s largest corporations are well known for making multi-million (even multi-billion) dollar donations to causes, the vast majority of American businesses are seeking a more modest approach to corporate philanthropy. Fortunately, companies of all sizes and financial means can be good corporate citizens. Many years ago, when Booz Allen Hamilton was a fraction of today’s size, founding partner Jim Allen counseled that “Activity and participation” are the keys. He went on to say that, “there are many things in which to participate: community affairs, schools, clubs, welfare organizations, professional and industrial groups. Choose wisely, but participate.” Booz Allen’s core commitment to global corporate philanthropy through volunteer service, grants and pro bono work continues to permeate all aspects of the business. Strong corporate citizenship is not limited to the private sector. Colorado Springs Utilities has demonstrated that employee volunteerism can be a cornerstone. In 2006, 807 Colorado Springs Utilities volunteers provided 6,053 volunteer hours for 118 community projects. By any measure, that level of volunteerism is impressive and a tribute to the community focus of its leadership and employees.
While financial support is certainly welcomed and needed by the nonprofit sector, an employee-centric and hands-on approach to philanthropy is powerful. In addition to providing nonprofits with time and talent, the experiences gained by the employees through solving complex and diverse problems provides multiple benefits to employee and team development. In short, employees practice and refine their leadership, communications and management skills in ways that aren’t available within the traditional workplace. Volunteerism also creates employee pride, higher morale and team bonding. In short, companies that encourage and enable these low/no-cost corporate citizenship activities can realize some of the greatest positive impact to both the community and their companies.
Being a good corporate citizen is the right thing to do, provides tangible business benefits and is achievable by companies of all size, resource and capability.
Mark Lester is a senior associate with Booz Allen Hamilton. He also is the president of the Leadership Pikes Peak Board of Trustees and was recently recognized as a Rising Star by the Business Journal.