The Advantages of Altruism in Tough Times

When profits are down, corporate philanthropy is often one of the first items to get the ax. Out of 158 companies surveyed by global research organization The Conference Board, for example, 45 percent said they had already implemented a reduction in their 2009 giving budget, while 16 percent were now considering it.

However, staying charitable in a down economy may actually be the better business move. Firms that offer help when it’s most needed are likely to generate good will and make a lasting, positive impression.

Doing Good Is STILL Good Business

Indeed, how a company operates and what it does for the community has been shown to influence consumers’ buying decisions, especially since that information is now easier to access, thanks to increased transparency and the Internet.

According to the latest global study by consulting firm Edelman:
80% of consumers feel that during a recession, it’s still important for brands and companies to set aside money for social purpose.
76% like to buy from brands that donate to worthy causes.
68% say that in a recession, they would remain loyal to a brand if it supports a good cause.
55% say that in a recession, they will buy from brands that support a good cause even if they aren’t the cheapest.
54% would help a brand promote a product if there was a good cause behind it.
52% are more likely to recommend a brand that supports a good cause over one that doesn’t.

But there’s more. Aside from enhancing customer loyalty and community relations, corporate philanthropy has also been proven to motivate employees and create a more productive, healthier workforce. Moreover, it helps to address problems and improve the quality of life in areas where companies do business. That, in turn, leads to better consumer buying power and economic stability.

Doing Good, Outside the Box

If monetary support isn’t possible, think of other ways your firm can serve the community, such as:

• Volunteer or offer your expertise and services for free.

    Encourage employees to donate their time and skills to a good cause by giving them time off to do so, or by making it a company effort. According to a 2009 Deloitte Volunteer IMPACT Survey, 95 percent of nonprofit respondents need and want more pro bono support. However, 95 percent do not know which companies to appeal to, and 97 percent are unsure whom in a company to approach. This unfamiliarity may stem from the fact that 50 percent of corporate donors do not offer skilled volunteer support, despite a belief in its value.
    “At a time when cash is tighter for everyone, it’s critical for both companies and nonprofits to think creatively about how to capitalize on the growing market for pro bono services,” said Evan Hochberg, national community involvement leader at Deloitte. “We’ve found this type of skilled volunteerism must be managed on both ends in order to maximize its effectiveness for the nonprofits as well as the donors.”

• Donate your extra resources.

        In addition to financial and volunteer support, many philanthropic organizations are in need of specific goods, depending on what type of outreach they do. Research which charities would benefit from items that you and your employees already have but aren’t really using, such as computer equipment, art and office supplies, kitchenware, business suits, books, used vehicles and more.

• Think of alternative ways to give.

    Perhaps you can offer an internship, part-time or full-time position to someone in need of a job. Or maybe you can donate a portion of each sale to charity. Or perhaps you can serve on the board of a non-profit, or provide mentoring or consulting services for their fundraising auction. Whatever you do, when giving during a downturn, it helps to be creative. To maximize your dollar support, you can team up with your employees, suppliers, clients and/or other NAWBO members, and establish a “giving circle” to support a common cause. For a detailed guide on how to start your own “giving circle,” go to The Forum of Regional Associations of Grantmakers’ Web site (www.givingforum.org).

• Be judicious.

    To make sure your donations are put to efficient use, spend time getting to know your non-profit partners better. Understand their short- and long-term goals and how they plan to measure their results. Check out each charity’s Form 990 from its Web site or at GuideStar (www.guidestar.org) to see whether it has positive or negative assets. The latter could indicate that your dollars may go toward paying off debt rather than delivering services. Schedule a visit to see firsthand how they operate and serve their constituents. Lastly, use sites like the American Institute of Philanthropy (www.charitywatch.org) or Charity Navigator (www.charitynavigator.org) to see exactly where your money is going—whether it’s toward organizational expenses, executive compensation, direct services, etc.

Doing Good As a Long-Term Investment

“Companies that are breaking the mold are moving beyond corporate social responsibility to social innovation,” says Rosabeth Moss Kanter, Ernest L. Arbuckle Professor of Business Administration at the Harvard Business School. “These companies are the vanguard of the new paradigm. They view community needs as opportunities to develop ideas and demonstrate business technologies, to find and serve new markets, and to solve longstanding business problems.”

Indeed, in being a good corporate citizen, it helps to come up with an overall, long-term strategy, and to integrate it across all your operational functions. After all, when it comes down to it, success must be measured not only in terms of profit, but also by how your business has made a positive impact on society through your economic, environmental and social actions.