Measure Your Return on Philanthropic Investment
If you are the CEO of a successful company, you probably
have a long-standing commitment to philanthropy. Maybe
it's an employee giving program, a corporate foundation
with a grant or matching program, or simply a culture
of volunteering and giving back to the community. But
can you articulate what that commitment is? Can you quantify
it? And can you demonstrate and explain the benefit of
that commitment to your customers, shareholders, and employees?
"It is more important than ever to meticulously
keep track of every bit of money and time you spend on
charity," says Wichner, President and CEO of KindMark,
a provider of integrated online corporate philanthropy
solutions. "Partly, this no-nonsense mindset is due
to recent scandals over lack of accountability, but it's
a bigger issue than that. In an age where every dollar
counts, corporations shouldn't pass up the chance
to view philanthropy as more than a 'warm fuzzy' issue.
For example, in a 2001 Cone Inc. report, 81% of consumers
indicated that they would likely switch brands (price
and quality being equal) to a company that supports a
cause that they care about. Giving is an investment, and
it should be every bit as strategic as, say, marketing
or new business development."
Wichner says that keeping a firm grip on your philanthropic
efforts can benefit your corporation in many ways. Here
are a few examples:
- It helps brand your company. When you can pinpoint
and describe the impact of all your philanthropic programs,
you can effectively communicate the value of your community
investment. It also allows you to use a carefully targeted
approach to your giving. And, when you report your generosity
to shareholders, employees and the community, having
accurate numbers to share is far more effective than
relying on vague generalities.
- It gives you an edge over less strategy-minded
competitors. Most corporate philanthropy could be
described as "ad hoc," offering no benefits
beyond the obvious, immediate ones. By creating a carefully
strategized philanthropy program, you design your giving
efforts to benefit you in a number of ways—ways
that can give you a distinct competitive advantage.
- Shareholders want to see bottom-line numbers.
Shareholders want to know whether your contributions
are seeing any return on investment, whether it's in
the form of community goodwill, employee satisfaction,
or increased profits due to customer approval.
- Customers care. With more access to information
about corporations—due to more stringent reporting
and universal Internet access—customers are more
educated than ever. And increasingly, they want to know
where you direct your charitable dollars and how much
you spend. According to an OnPhilanthropy article by
David Zucker, "Porter Novelli's ConsumerStyles
research shows that 64% of U.S. adults say that a company's
charity affects their purchase intent."
- It reassures employees that their money and time
are being put to good use. This is especially true
in an age rife with skepticism. Partnering with a company
which shows donors exactly who is receiving their money
and when, goes a long way toward alleviating that skepticism.
- Measurement justifies volunteerism, which in turn,
benefits your business. Some employees may be reluctant
to give money, but are more than happy to donate their
time to worthwhile causes. Not only does quantifying
help facilitate corporate matching grants for programs
like “dollars-for-doers,” it allows you
to include the value of volunteer time when you report
your overall philanthropic impact.
- It's good for the CEO's image. The financial
success of your company is intricately connected to
corporate reputation, which in turn is connected to
the reputation of the company's leader. According to
Stephanie Kugelman, Vice Chairman, Chief Strategy Officer
of Young and Rubicam, "Nearly 50% of a company's
reputation is attributable to that of its CEO. A 10%
change in CEO reputation is estimated to result in a
24% change in a company's market capitalization.
95% of business leaders say CEO reputation affects their
decision to invest in a company.”
November 2003, Craig Wichner, KindMark
KindMark is the premier provider of a complete end-to-end
suite of web-based solutions to manage corporate giving