Most of us, one way or another, have been either on the giving or receiving end for charitable causes. We give to our churches or synagogues; buy cookies for the annual Girl Scout fund drive; and participate in the company United Way campaign. In America, charitable giving is as ubiquitous as apple pie.
Businesses also give back through their foundations and social responsibility programs. Their generosity shines through with in-kind and cash donations, community grants and in countless other ways. Many incentivize employees to donate their time to worthy causes. What do these organizations have in common?
Charitable giving as a core value.
Partnering with local charities offers a golden opportunity for philanthropic-minded businesses to give back and build community goodwill. Along with the brand-building benefits, employees and customers also feel good about companies who make charity part of their culture.
But how do businesses go about choosing the charities they support? Many small and mid-size companies give based on the relationships they have established in their local communities.
That’s fine. But it’s also exactly the same thing every other local business does. So, standing apart from the crowd is unlikely. Too often your giving gets diluted, fragmented with little to show for it. At a time when consumers expect brands to stand for something, by stepping up for everything and every one, you stand for nothing.
There is a better way. A more purposeful approach to giving that lets your company do good and do well.
Six Lessons for Better Charitable Giving
Lesson 1: Align your charitable giving with your company brand.
Every brand makes a promise. Make sure the causes you support are well aligned with your business, culture and the work you do or products you make.
Meet with several nonprofits to evaluate brand and mission fit. Look for ways to support the charity now and in the future. Consider how your support of the charity will be viewed by all stakeholders. Will they embrace it and rally behind the cause?
How do you plan to give to the charity and what amount is reasonable? Most companies give between 2% and 5% of their net profits. Consider ways you can help the charity beyond financial needs. What do you expect in return for your charitable investment, if anything?
Lesson 2: Make sure the charity is accountable and transparent.
After all, your good reputation will be negatively impacted if the charity you choose becomes mired in scandal. Charity Navigator and the BBB Wise Giving Alliance are great resources for information on national and local charities, including data on how much money actually goes to the cause. In addition, check with your local chambers to find out how the nonprofit is viewed in your local community.
Lesson 3: Create a formal giving agreement.
It is important to be clear on your role and what to expect from the charity in return. Get this in writing so everyone is on the same page. You don’t always have to have a binding legal contract, but depending on how much you are giving you’ll want to consider more than just a tax write off.
Lesson 4: Avoid conflicts of interest when giving to charity.
If you are a liquor brand, don’t sponsor a children’s charity event. Also be sure you consider public sentiment about the charity, their mode of operation, their stance on controversial issues and how this may reflect positively or negatively on your business.
Lesson 5: Create an emotional bond for your brand and charity of choice.
Consumers today expect all businesses to give back. And there are some causes they are more passionate about.
Yours should align strategically with your brand and have stakeholder value and appeal. What do they care about? How can your brand tap into that emotion? Storytelling, especially from the people your charity helps, is a powerful marketing method to raise awareness for the cause and your brand. Your logo as a sponsor on an event banner, flyer or website page saying “thanks for supporting us” simply doesn’t have the same impact.
Lesson 6: Don’t overlook the millennial effect.
Unlike their parents, millennials love crowdfunding and social giving. They are passionate about causes, not a particular nonprofit organization. They want to know their donations make a real difference. And they’re driven to enact change today, not in the distant future. Find ways to tap into the passion millennials have for important issues to advance mutual goals.
With the growing number of charities and causes competing for the same piece of the proverbial pie, it can be difficult for business owners to understand where one mission begins and the other ends.
So, make your charitable giving count by planning strategically and approaching the process collaboratively. Put your money where your heart is and develop a plan that benefits both your nonprofit and business partners. Your community will be better off for it.