3 Reasons Strategic Philanthropy Can Be Good for Goodness Sake

March 27, 2019
Posted by Russ Waddill on Mar 27, 2019 1:30:39 PM

A study by Giving USA was released last year that charitable giving in the U.S. surpassed $400 billion in 2017 for the first time in our nation's history. That is an enormous sum and a strong indicator that Americans prioritize charity. Since 1977, or the last four decades, giving has increased in real dollars every single year except 3 - 1987, 2008, 2009 - all years marked by serious recessions.

Of that $400 billion, the vast majority (over 70%) of it was given by individual citizens. About 5% or $20 billion, however, was given by corporations. What if a larger share of the $20 billion were given to philanthropic organizations that shared a strategic interest or intersecting mission? What might be the result and could both organizations leverage the 'good' that comes from it?

There are many ways to approach charitable giving as a company or organization. Some companies, such as Tom's Shoes who famously began in 2006 by committing to donate one pair of shoes for every one they sold, have built their entire business model around charitable giving. Many other companies, arguably the majority, give to causes that are of particular interest to the CEO and/or management, or give to random charities simply because they are asked.

My question lies somewhere in between these two examples: Should your company be more intentional about a strategic philanthropy?

The answer is yes, and here are 3 reasons why.

Reason #1: Your employees want to be involved in something greater than themselves.

Remember those giving statistics? Nearly $290 million was given by individuals in 2017. We are a charitable people who want to make a difference and help those in need. There is an ancient African proverb that states, "If you want to go fast, go alone. If you want to go far, go together." Your employees want to be successful, be promoted and to help their company grow. But they also long to be inspired by a mission that will unite them around a charitable goal and that will feed their soul.

If employees believe that their company cares enough to marshal their creativity and energy around a non-work related mission that they can all participate in and work alongside each other to accomplish, they will work harder at both and be more loyal.

Reason #2: Your company needs another creative way to reinforce your brand.

Early in my career I worked for a mid-size, fast-growing regional appliance and electronics retailer. We had charities we gave to but with no forethought. I always felt like the ideal partner would have been Habitat For Humanity. They build houses with volunteers in nearly every community in the country. Each store team could've worked with the local chapter, volunteering their time building the houses and then we could have furnished the finished home with appliances and electronics. The goodwill and pride it would have created in our team members and the communities could have been exponential. And Habitat is a very well-known organization with deep roots. The other volunteers would have been exposed to a side of our company that would have done more than any advertising could have ever accomplished.

Every company believes they are different. They believe that what they do in their industry for their customers is unique and sets them apart from the competition. Most of the time, they are wrong. There are typically several firms offering similar services with little or no way to discern the difference other than price or a personal relationship. That lack of differentiation makes it tough to stand out in a crowded field.

Think if you studied your company, assessed the industry, identified a key competitive advantage, and chose a philanthropy or non-profit organization to partner with that amplified your firm's differentiation. Then think if you and your team set goals for the partnership and integrated them into your operations plan for the year.

Regular updates about progress towards charitable goals, employees' work in the community, and highlights of the good being accomplished become powerful messages to share with stakeholders. One of the biggest obstacles to executing a robust content strategy is the bottleneck created by generating topic ideas and then writing, optimizing and publishing that content. Sharing stories of the good works your team is doing while telling your firm's story as to why this is important to you can be strong reinforcement of how your company is different. It also indirectly conveys to your customers that if you care about your employees, and you care deeply about a non-profit mission, then you will take good care of your customers.

Reason #3: The process of finding the right partner could have powerful strategic implications

Identifying your firm's distinctive competence - the 'why', as in why do you exist? - can be an elusive proposition. As we've discussed, oftentimes there are several if not dozens of competitors in your market competing for similar customers. The process of defining your value proposition and the elements that make it up is a high level strategic process that requires not just the CEO, but key people in the organization tasked with delivering on it every day. It can be easy to get lost in the weeds, and distracted by the minute details. It can also be difficult once you think you've come up with the differentiation to figure out how best to convey it.

Focusing your leadership team on the broad elements of differentiation, then transitioning their efforts to identifying an organization that could be a strong philanthropic partner gives that team a defined step to apply what they have learned, or developed. It forces them to think of how the firm's position in the marketplace can now be amplified. They will have to research possible non-profit organizations or missions, develop a review process, interview leaders of the respective organizations, determine outlines of possible programs of work, and create a final decision criteria.

It also requires discussion and planning around marketing, operations , strategy, finance, and human resources. There are few disciplines in running a business that aren't touched when considering this undertaking. It is also scalable, giving your team an opportunity to start a pilot project and measure it before it is scaled across multiple locations or departments. But, without a doubt, it will engage your employees in a process that will force them to answer two questions:

  • What makes our company different?
  • What do we really care about?

If you can marry those two and make it meaningful for your company, your employees and another organization with a mission worth believing in, then why - for goodness sake - wouldn't you do it? 

 

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