It’s easy to bash businesses for not being more involved in the community. We’re the nonprofit sector, and they’re the ones with the profits, right? And aren’t they always the ones whose percentage is lowest in the Giving USA (http://www.givingusa.org/) report on charitable contributions, responsible for only around 5 percent of the dollars given each year?
There are a number of reasons why business giving isn’t higher. First of all, the purpose of a business is to make profits, and charitable contributions usually charge against this bottom line. When the business distributes profits to owners or dividends to shareholders, or when they pay salaries to employees, those individuals can and do make charitable contributions. In fact, individuals constitute more than 80 percent of total charitable giving each year. Also, most foundations are created by people who have reaped returns from successful businesses. So, you could say that business success fuels the bulk of the $300 billion given to charity each year.
In addition to this indirect giving, there are many businesses that give directly and generously – in dollars, employee volunteer hours and gifts-in-kind – to help nonprofit organizations. In communities across the country, businesses are essential partners with nonprofits, even during tough economic times that challenge both sectors. And, more and more businesses are looking toward a “triple bottom line” – profits, community involvement and environmental sustainability – as a way to make themselves both useful to the community and indispensable to their customers. (See Andrew W. Savitz’s recent book, The Triple Bottom Line, for more on this concept.)
Recent research from the Committee Encouraging Corporate Philanthropy (http://www.corporatephilanthropy.org/) shows that 94 percent of business leaders surveyed believe that companies need to contribute to solving today’s social issues. These leaders do not see themselves simply as do-gooders motivated solely by a higher moral purpose; 90 percent seek business-related benefits from their community involvement, including enhancing brand equity, building employee morale, developing leadership and recruiting new talent. “The days of giving because it is ‘nice to do’ are over,” said one high-level corporate executive. “Aligning with a cause has become a powerful business strategy for strengthening brands and building relationships with key stakeholders, while creating meaningful social benefit.”
How can your nonprofit organization make the most of the fact that business leaders recognize the potential benefits of involvement, yet may not know where to start? Here are a few ideas.
Don’t date just anybody
Think about how your organization might be suited to partner with a particular type of business. How can your activities, connections, constituents and public presence benefit a specific type of business by creating more customer loyalty or positive brand awareness? For instance, if you are a sports-related charity that has tremendous public good will and hundreds of loyal volunteers, a good match might be a sporting goods retailer, professional sports team, athletic wear manufacturer or health food company.
Think beyond who’s paying for dinner
Many nonprofits think that the only way a business can be involved with them is through direct cash contributions, often for big fundraising dinners and events. Especially in today’s economic environment, sponsorship dollars are hard to come by. But there may be opportunities for you to work with a business that might contribute in-kind services to your organization or help augment your staff with skilled volunteers. Develop a relationship with someone in the business, and find out how your objectives could be linked. There’s also the possibility that a business could invest advertising or marketing dollars in a partnership with your organization, especially if the outcomes of the partnership relate to public outreach.
How will they know they got their money’s worth?
Find ways to measure how involvement with your organization benefits the business. Businesses are better at measurement than other sectors because they have to be – they need to know how each action contributes to their bottom line. The same is true for their partnership with you. Can you tell them how many “eyeballs” you’re delivering to their logo at your events? How often their name is mentioned and to which kinds of audiences? Can you show that employees who volunteer with your organization have greater job satisfaction?
Don’t just go for the biggest fish
Perhaps you’re located in a market like Denver, where we are only just starting to build our stable of corporate headquarters; or maybe you’re in Chicago or New York, where Fortune 500 companies are a dime a dozen. No matter where you’re located, small businesses overwhelmingly outnumber larger businesses. Small and medium-sized businesses are, by definition, usually closer to their customers and more concerned about the perceptions of their constituents in your local area. They may be even more likely prospects for involvement than their more sizeable counterparts.
Learn from the masters
Are there organizations in your community that have been successful in forging business connections? Find them and ask how they did it – not to steal their specific ideas, but to understand their thinking. Why kinds of connections do they look for? How do they foster their relationships with key decision makers?
Whatever you do, don’t approach a business with that 5 percent figure from Giving USA on the tip of your tongue and an admonishment that businesses should do more. Remember to start from a place of listening, so you can understand the company’s motives for community involvement. Remember too that the person across the desk could someday become one of your most generous donors – from his/her own personal checkbook. Successful business connections are all about building a position of mutual benefit … and the desired outcome is a thriving company and the successful achievement of your mission.
By Rebecca Arno, vice president of communications for The Denver Foundation (www.denverfoundation.org), a community foundation serving the seven-county Metro Denver area.