Get More Benefit From Your Business Giving

    American companies have a long tradition of helping make their communities better places in which to live, work and do business. According to Giving USA 2012, giving by the American business community totaled $14.55 billion in 2011. While down from pre-recession levels, that is still an enormous amount that includes everything from $250 sponsorships to $10 million corporate gifts.

    Traditional business giving is an expression of faith that what is good for its community will, in the long run, also be good for the company. With an economic situation that remains uncertain, benefits that are both long term and general may not be sufficient to justify continued giving. There are, however, several things that companies can do to assure that their charitable giving also serves immediate and specific business objectives.

    1. Make increased visibility and goodwill with customers your bottom line goal for giving. Positive public attention is an entirely permissible benefit that companies can, and should, get from their charitable giving.

    2. Set a specific contributions budget. Many companies find designating a fixed percentage of pre-tax revenues or post-tax profits for giving to be a convenient way of setting their budget. Most companies do not promote how much they plan to give, but there are exceptions. For example, Ben and Jerry’s promotes that they give 7.5 percent of their pre-tax profit to charity, while TOM’s Shoes widely publicizes that they donate a pair of shoes for each pair that they sell.

    3. Form a “contributions committee” drawing on key areas of your company to guide giving. Representatives from marketing, public/government relations and executive leadership are frequently recruited to assure that giving also serves business objectives.

    4. Don’t limit your giving to where your company has a physical presence; also give where your customers are located.

    5. Support the causes and groups that your customers care about. Companies selling to individuals and families usually focus their giving on things that reach the public directly such as: schools, community groups, and youth programs. Companies that sell to other businesses tend to focus on larger institutions where executives from customer companies are likely to be active.

    6. Avoid controversial causes and groups. Giving to controversial causes can produce backlash up to, and including, consumer boycotts. As a result, most business giving goes to “mom and apple pie” causes that generate broad support and little controversy.

    7. Give to specific needs. Most nonprofit organizations need operating support and, if you simply want to help, that is absolutely what you should provide. Unfortunately, it is hard to create a compelling narrative for PR or marketing purposes around helping a group pay its light bill. In consequence, companies in general direct their giving toward specific things -“ new programs, expanded facilities – they can later point to as results of their giving.

    8. For visibility, spread much of your giving around. Many smaller gifts will create more visibility than would a smaller number of larger gifts. As a result, sophisticated business givers generally use much -“ but not all -“ of their resources for small gifts, including taking event sponsorships and buying fundraising event tickets.

    9. To build goodwill, more narrowly focus the rest of your giving. A good giving program also makes a small number of large commitments each year. Some go to high profile projects that are sure to be well-publicized, others toward immediate needs like disaster relief, but many -“ and for some companies, most -“ are made in response to requests made by executives of customer companies on behalf of organizations where they serve on the board.

    10. Require recipients to publicly recognize your gifts. Every recipient organization should list your company where that group recognizes donors. Larger gifts should be actively promoted to press and public. The PR “payoff” from giving will be proportional to gift size; a $1,000 gift will not get your company a story in a major daily paper.

    11. Have groups requesting your support describe the nature, size and relevance to your business of the audience(s) in front of which your company’s generosity will be recognized.

    12. Use a brief (one page) giving policy and a simple application form. A clear policy will ward off some inappropriate requests. A formal policy can also help assure those whose requests are turned down that their needs were fairly considered. A well thought-out application form helps assure that applicants provide the information you will need in order to consider their requests.

    Michael J. Montgomery is a principal in Montgomery Consulting, a fundraising and economic development consulting firm, and an adjunct professor in the College of Management at Lawrence Technological University in Southfield, Mich. This article is based on the author’s “Donor School: More Effective Business Giving” workshop. Contact him at [email protected].

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    Richard Blanchard
    Rick is the Managing Editor of Corp! magazine. He has worked in reporting and editing roles at the Port Huron Times Herald, Lansing State Journal and The Detroit News, where he was most recently assistant business editor. A native of Michigan, Richard also worked in Washington state as a reporter, photographer and editor at the Anacortes American. He received a bachelor of arts from the University of Michigan and a master’s in accountancy from the University of Phoenix.