While this used to be a consideration primarily for civic-minded business
leaders, it has quickly become a competitive imperative for all businesses. In fact,
Business Week (Sept. 11) recently
reported that 95 percent of Americans wish businesses did more for the community and employees. Philanthropy is good for business, and it's an important part of your budget.
Most companies derive their community-giving budget by skimming a bit of the cream off the top of their annual profits. A number of businesses don't really budget for giving but generously share products or services with nonprofits that knock on the door. These businesses are to be complimented for their generosity, but there's a better way to budget for giving. As companies finalize budgets for the upcoming year, here are some giving strategies worth considering.
Allocate a Giving Budget From the
Benefiting Function
The most obvious area to find resources for giving is the marketing budget. Companies are preparing to spend hundreds of thousands of dollars on advertising next year. A Harvard Business School study showed that less than a third of advertisements increases sales. Why not allocate part of your marketing budget for a cause-marketing campaign that supports a community entity, while reaching your customers more effectively? Advertisements are still important, but combining advertising with nonprofit causes can improve an ad campaign's effectiveness. There are some businesses that actually donate up to 80 percent of their marketing budget to nonprofits. Why? Because they believe that they get their money's worth from sales generated by associating their business with a worthwhile cause.
Pick Perks That Have Meaning for Employees
The human resources budget typically includes employee benefits and perks—morsels that keep employees motivated and happy. Consider looking at this budget to provide perks that employees will find meaningful. One example: providing a few hours of paid leave for employees to volunteer their time at a charity of their choice. Or instead of yet another company picnic to which unenthusiastic employees drag even less enthusiastic spouses, how about a night at the symphony that benefits the local arts organization? There are countless ways to tie employee perks to community nonprofit organizations.
Put Hardware to Work for a Cause
Capital budgets seem like one of the last places to consider creative ways to donate, but don't count it out. When you plan next year's big purchases—whether vehicles, buildings, hardware, furniture or parking lots—think about how those assets could also benefit a local nonprofit. Could your plans for vehicles be modified slightly so that they could be used on weekends to transport kids on field trips or take food and supplies to shelters? Or could you plan your shipment of new furniture to coincide with a nonprofit's ability to take your used furniture?
Include the Public Good in Public
Relations
Finally, if you budget for public relations and communications, there are lots of opportunities to leverage this with nonprofit partnerships. Consider the experience of Vectra Bank Colorado: The company realized that if it invested in a big event tent with its logo on all four sides, it could donate the use of that tent to nonprofit events all summer long. Nonprofits received a valuable service, and the bank received excellent public relations.
Creative companies can actually make their budgets go further—both for themselves and their communities—if they budget with an eye for giving. The nonprofit community can always use the cream off the top, but you might be able to get a bigger bang for your buck by sharing the whole glass of milk.
Brooks Preston is president of Clearwater Strategic Community Investing, a consulting firm in Boulder, Colo., dedicated to helping businesses build profitable alliances with nonprofit organizations. For more information contact: info@clearwatersci.com.