The Covid-19 pandemic has created need on a tremendous global scale. While the philanthropic efforts of individuals make a big difference during these times, businesses also possess great power and resources to help those in need.
For that reason, it’s more important than ever for companies large and small, to give. As a philanthropist serving on numerous charitable boards and the author of “Successful Philanthropy: How to Make a Life by What You Give”, I have seen the massive good that a corporation can do. Whether your company already has a foundation or is just now setting out on its philanthropic journey, here are five tips worth considering.
- Develop a clear and focused charitable mission.
It’s common sense, but when a company’s charitable foundation gives, it should have first developed a specific mission statement with clear objectives.
Start by identifying a need within the community you serve and do business in. If you are an international business, give worldwide, but also think about the specific places your business has its offices or factories. Think about the issues that affect the people who make up your workforce.
For example, a company that employs a lot of women in a particular location might focus on empowering women and enhancing that community. That company might want to get involved in supporting a charity involved with providing community daycare needs for those unable to pay on their own.
You should also create a budget for giving that is a fixed percentage of your company’s projected income. Your company’s revenue will change with economic ups and downs – as it has for many during the Covid-19 pandemic – and a budget tied to income will allow you to expand or taper your giving accordingly.
A clear and focused mission statement and a charitable budget are essential to intelligent giving.
- Your philanthropic work should gel with your business goals.
I recently got a call from an international fashion group. They were working to target their giving to a women’s charity in Boston that aligned with the corporate mentality. Why? Because their customers are successful businesswomen and well-heeled Bostonians.
Generally, the money a company gives has to meet the priorities of their business and align with their customer base. Every major company recognizes that philanthropic work is an important marketing tool to promote their brand and many actually give via their marketing departments.
If your company is in the art business, you might give to art museums and arts programs. If you are a drug company that manufactures a medication used to treat a certain disease, give to a charity that researches treatment for that disease.
Business is business. When people see your company doing good in or for a community, they are going to support your business over a competitor’s.
- Do research and build relationships with the charities you are interested in supporting.
Most charities are well run but you have a responsibility to choose well.
Before you give to a charity, you should ensure that the organization is efficient and has a low overhead. A charity’s expenses should never be more than 20 percent of their annual revenue. If it’s a large charity, with say a $300 million budget, their expenses might only be 5 to 10 percent.
Your business should do a thorough review of a charity by requesting a 990 form (the IRS reporting form for non-profits), a packet, and a grant proposal. Examine whether the charity operates at a surplus or a deficit and look at how much of their revenue is actually going towards programs.
Today, there are also many websites dedicated to vetting charities that your business can use. The best ones are GuideStar.org and CharityNavigator.org, which rate millions of non-profit organizations. You should also check with the Better Business Bureau, which also analyzes charities.
Moreover, you have to feel comfortable with a charity and the direction they are going. Meet with the non-profit and develop a relationship with their CEO, Development Officer, and Board Members, so that you can get on the phone anytime with questions.
- Get your employees involved.
Employees are proud to be involved in the giving process. They are also proud to donate their time by volunteering.
To help meet diversity and inclusion goals, the vast majority of fortune 500 companies put together something called “affinity groups.” Affinity groups are communities of employees inside organizations who have a common interest and recommend charitable activities to a corporation.
For example, there might be a Women’s Affinity Group or a Latino Affinity Group at your company made up of employees from those demographics. These like-minded employees might get together to donate their time to, say, the New York Women’s Foundation, or invite the head of the organization to come and speak about a particular cause. Then they might recommend that their company make a donation. Philanthropic employee organizations, such as affinity groups, keep employees connected and involved in the giving process.
- Consider impact giving.
Companies like to create impact in a community or focus on a specific cause. This can be done through impact giving. Companies often adapt and may refocus a portion of their giving in times of a natural disaster and economic upset.
Right now, with the Covid-19 pandemic causing so much pain, companies that can are shifting some of their philanthropic efforts to “impact giving” – targeted donations to help with the pandemic. Corporations can make a big impact during a time of crisis.
For instance, JP Morgan recently committed to give $50 million to fund community groups around the world that are supplying food and medical supplies during the Covid-19 pandemic.
Companies should also consider gift-matching programs – which have always been popular. When a business makes a dollar-for-dollar matching gift – say up to $100,000 – it helps a charity motivate private donors to give more.
Whatever the crisis, corporate donors should consider stepping in and making a gift to show that they are involved. You don’t want your company to sit on the sidelines when need is at its greatest. It would be a shame to look back and see that when needs were the greatest your company did not participate.
Written by Jean Shafiroff. Have you read?
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