Corporate philanthropy is on the rise. Between 2016 and 2018, the world's top 250 companies increased their philanthropic donations by 11%. Corporations donate over $25 billion each year to every cause under the sun. The world's largest companies all engage in philanthropy in one way or another. But what do they stand to gain from it?
The CEO of asset management firm BlackRock, Larry Fink, in a letter to other large companies said, "To prosper over time, every company must not only deliver financial performance, but also show how it makes a positive contribution to society."
It's clear that the mindset of executives is changing, and corporate philanthropy has evolved from what it once was. Today's consumers are savvy, and hold causes close to their hearts. They want companies they do business with to have a social mission, but they also want sincerity. Your company's CSR policy is not as simple as throwing money at the problem until it goes away.
The modern employee is socially responsible. They want to work for companies who care about the world they operate in. According to a study by Cone, over 50% of people won't work for companies that don't have strong CSR commitments.
Today's workforce needs to be inspired. Those under 25 especially are looking to be a part of something bigger. However, it isn't enough just to donate cash. Your company needs to have a strategy, or it won't have the desired effect. Plenty of philanthropists agree. John Stone, founder of the Stone Family Foundation, says that he treats his giving like a business. Whereas Patricia Turner, founder of the Turner-Kirk Charitable Trust, champions the need for smart risk-taking and evidence-based methods in philanthropy.
Charitable donations are all well and good. But if you want the full effects, you must do it right. You as a business owner, big or small, can make a real difference in the world with a properly planned philanthropic strategy.
Something that goes hand in hand with attracting talent is your brand's reputation. Word of mouth is powerful. If your employees think they work for a company that imparts some good onto the world, then they will tell anyone who'll listen.
Not only that, but improving your reputation via philanthropy will drive up your sales. In a study by Clutch, 75% of respondents said they would be more likely to buy from a brand that supported a cause they believed in, and 71% think it is important for a business to take a stance on social issues.
Just as the modern employee is different, so too is today's consumer. Price and quality are no longer the only factors when purchasing goods. They are important, but now there is also the issue of social responsibility. Philanthropy is a great way to tackle this. Make a brand people believe in and there's no doubt you'll win new business.
Staff retention and productivity
Drawing consumers in and attracting talent are definite side effects of philanthropy. However, another boon is being able to keep them. A report from the Satellite Institute revealed that companies who practice CSR, such as charitable giving, see 50% lower staff turnover rates than those who don't. The numbers don't lie.
If your staff think that their work isn't doing any good, they might leave for greener pastures. No doubt you will kick yourself if you lose star talent to other companies who show off their strong morals through strategic philanthropy.
If you support causes through your philanthropy, not only are they more likely to stay, they are likely to be more productive at work. A proper strategy is a small price to pay when the alternative is suffering a company-wide brain drain.
One thing that isn't often mentioned when talking about corporate philanthropy is the networking opportunities. At foundation events you will meet people from other companies who care about the same causes that you do.
This presents an opportunity for partnerships. Not only will consumers and would-be employees be drawn to you, but so too will potential stakeholders and business partners. And all because of the passion your business shows through its philanthropy.
This is an opportunity for you to become part of a network of businesses that stand for something. Not because it will keep their profits ticking over or attract talent, those are simply happy by-products of philanthropy, but because those running the company actually care about the cause they are supporting. This is when you truly stand to gain. The importance of sincerity in this situation can't be overstated.
Philanthropy has plenty of benefits for your business. It improves your reputation among consumers and would-be employees alike. It will make your company a magnet for talent, and retain it because you support something your staff believes in. This will make them more productive, well-rounded employees. Implementing proper strategic philanthropy is a vital step in future-proofing your business.
Copyright 2020. Featured post made possible by Sharon Fishburne.