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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 activities.

 

 
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