If you want to dive into strategic corporate philanthropy, the first thing you need to do is consider your motivation. Is it networking and to generate new leads? To support causes important to you as an executive or your entire team? Is it to position your company as a good corporate citizen because you think it will help you in some other way? It is because it just feels like the right thing to do? There’s no right or wrong answer here. But asking yourself the “why questions” will lead you to the right strategy.
Whatever your motivation is, when nearly 90% of consumers say they’re more likely to buy from a company that supports activities to improve society, then you need to integrate corporate philanthropy into your marketing and sales strategy. (REFERENCE: Creel, Timothy (2012). “How Corporate Social Responsibility Influences Brand Equity.” Management Accounting Quarterly.)
You should also consider the benefits corporate giving has on your staff. Recruitment and retention will become increasingly more dependent on whether your company can give employees the sense their job is making an impact in some way.
No one can tell you how much time or money you should be giving. This is a decision for your executive team and completely dependent on your core values, size, revenue, and business goals. What we can say is that you need to make sure you are being strategic about every effort you make. If you do not take the steps to plan and have a calculated purpose for every donation and volunteer hour, these resources could very likely be wasted.
Once you know your WHY, the HOW will be more straightforward. Engaging in philanthropy as a HR recruitment and retention tool might lead you to surveying staff on their preferences and capacity. While engaging in philanthropy as a marketing effort might lead you to analyzing charitable giving opportunities as a path to developing relationships that will lead to sales.
Contact Blackbird Philanthropy Advisors today to get started on crafting a strategy today.
Written by Rob Clarfeld for Forbes
Americans are a generous people, giving away more than $410 billion in 2017, according to Giving USA, with more than 70% of that donated by individuals. Most people express their philanthropic desires by writing checks to the various charities that are important to them. Certainly direct giving is easy and convenient, but often lacks tax efficiency or a longer-term strategic focus.
For individuals and families that want their philanthropy to continue for generations or are concerned with income tax minimization efficiency, alternative options to direct giving include setting up a private foundation or contributing to a donor advised fund (DAF). There are positives and negatives to each.
Building a Legacy with a Private Foundation
For those with multigenerational wealth and the desire to leave a lasting legacy, a private foundation offers a lot of benefits. It adds prestige to the family name and can teach future generations the importance of being charitable and contributing to society. A private foundation also gives the donors total control over which qualified charities receive grants. Family setting up a private foundation can control the succession of trustees and board members for as long as the foundation remains in existence.
On the downside, private foundations are more complicated than DAFs. They require time-delaying filings and other paperwork to establish them, and there are upfront legal fees and annual maintenance costs for the required tax filings and recordkeeping. Private foundations also are required by law to distribute a minimum of 5% of their assets annually and must pay an annual excise tax of 1-2% of net investment income. Generally, those opting for private foundations endow them with a significant contribution and have multigenerational charitable intentions.
Let Someone Else Handle the Hassles
Conversely, donor advised funds are established immediately and at no cost, which explains their growing popularity. Most brokerage custodians—Fidelity, Schwab, TD Ameritrade, etc.—can have DAFs set up and running the same day. Once they are established, the fund sponsor handles all administrative functions. The tax benefits from donations to DAFs also are superior to that of private foundations. The limitation on deducting charitable donations (as a percentage of adjusted gross income on one’s tax return) is the same as for direct giving, 60% for cash donations versus 30% for private foundations, and 30% verses 20% for donated securities. Also, there is more privacy around DAFs, compared to private foundations that can be researched in publicly available databases, which often creates a flow of unwanted solicitations. As stated above, DAFs don’t pay an excise tax on investment gains.
A consideration that I’ve found to be more theoretical is that unlike a private foundation, although DAF donors advise on potential grants, the sponsor has the ultimate authority to approve or deny recommendations. There are also restrictions on what types of organizations are eligible for DAF grants.
Bunching of Deductions
The overarching benefit of both private foundations and DAFs is the ability to control the timing of when you receive a tax deduction and when charities receive funds. This can make a big difference in a year when one has an exceptionally high income – large bonus, vesting of restricted company stock, sale of a business, or winning the lottery – when charitable deductions are of greater value, and its beneficial to spread out payments to charities over several years. Both vehicles allow the deduction in the year you gift to the vehicle, while the charities receive the funds in the year you choose. Further, the recently enacted tax law, Tax Cuts and Jobs Act, may make the “bunching” of tax deductions into a single year adventurous for some taxpayers (See: Preserving Tax Benefits For Charitable Contributions)
Whether the desire to do good results in simply writing a check, contributing to a DAF or setting up a private foundation, maximizing the tax benefits of charitable contributions can be complicated and should be discussed with your tax or financial advisor.
ABOUT THE AUTHOR ROB CLARFELD
Rob Clarfeld is founder of Clarfeld Financial Advisors, a leading wealth management firm with offices in Westchester, N.Y., and New York City that provides comprehensive financial and estate planning, sophisticated tax and compliance expertise, and investment management services. Rob is a Certified Public Accountant, Certified Financial Planner® and Personal Financial Specialist with more than 30 years of experience advising financially successful families and family-owned businesses. With a focus on robust and individualized family office platforms, Rob has been Barron’s #1 Independent Wealth Advisor in New York for nine consecutive years, and is the #1-ranked New York independent advisor on the Forbes Top Wealth Advisors list. To find out more, visit: clarfeld.com ** Please Note: Rankings and/or recognition by unaffiliated rating services and/or publications should not be construed by a client or prospective client as a guarantee that he/she will experience a certain level of investment performance.
Written by Alina Dizik for Chicago Booth. Published June 11, 2018.
A company, if it clearly conveys during the recruiting process its intent to benefit society, can see lasting benefits, research finds. University of Chicago’s Daniel Hedblom, Queen’s University’s Brent R. Hickman, and List used data to track how advertising a company’s support of a nonprofit impacted recruiting and work quality.
To do this, they performed an experiment that doubled as a business venture, which involved launching a data-collection consulting company and hiring 170 part-time workers in 12 US cities. The initial job descriptions they posted were identical, but the researchers tweaked the job details in later emails. When people inquired about positions, they received an email saying the work would consist of either data entry or data entry to benefit underprivileged children. The researchers also varied pay rates, offering some applicants $15 an hour and others $11.
When hired, employees were assigned data-entry tasks that involved looking at Google Street View. Some were asked to tally the number of broken windows or potholes in each image, which produced data that was used in some cases to help identify safe areas near schools where administrators were trying to help students avoid gang violence, and in other cases to benefit Uber. (List is a consultant for Uber.)
Workers who expressed interest in a data-collection company, created as part of a study, were more likely to apply when the position’s social impact was advertised. 1
Helping schoolkids involved a social impact—and had a big effect on recruiting. When that social mission was mentioned in emails, the company saw 26 percent more people interested in the job, comparable to the 33 percent bump the company saw when it offered $15 an hour. Advertising jobs that had a social mission improved the pool of applicants, with no additional, and potentially expensive, recruiting tactics required. “This generation of young workers is more compelled than previous generations to do social good,” List says.
People who accepted a job originally advertised as CSR-driven were also more effective at work. Employees in the CSR group were more productive, analyzing images in a shorter amount of time than other workers. And while all employees could work any number of hours over a 10-day period, those in the CSR group worked longer hours.
Both women and men were affected by corporate responsibility, but in different ways. Women were 40 percent more productive in accurately analyzing Google Street View images as a result of CSR and worked an hour more per day. Men produced higher-quality results but did not increase the number of images that they analyzed. “Together, these insights suggest that CSR draws out higher output from women and higher quality from men,” the researchers write. “CSR should not be viewed as a necessary distraction from a profit motive, but rather as an important part of profit maximization similar to other non-pecuniary incentives.” Customers and employees, List assures, will still view CSR as authentic, even if it is recognized to boost profits.
While the results suggest that CSR can have strong, positive effects, List recommends companies keep the findings on moral licensing in mind and monitor employee behavior. He notes that because so much behavior is driven subconsciously, simply making employees aware of the tendency to couple good actions with bad could counteract the bias.
University of Chicago Booth School of Business’s Rustandy Center for Social Sector Innovation, this guide provides four research-based ideas you can implement today. The Rustandy Center for Social Sector Innovation is the Chicago Booth business school's social impact hub and destination for people tackling complex social and environmental problems. This information is provided by the Rustandy Center in their downloadable e-book here.
3. Make Your Fundraiser Exceptional
Reframing your annual fundraiser as a unique opportunity can drum up higher donations. Abigail Sussman, associate professor of marketing at Chicago Booth, finds that minor differences in the way a charity frames its donation plea, as either a regular occurrence or an exceptional one, can make a big difference in how likely people are to donate.
For example, researchers altered the wording in online ads for the Alzheimer’s Association’s annual charity walk, so that one ad read “Held annually for Alzheimer’s,” while another read “Only once a year for Alzheimer’s.” People were more likely to click through and donate for the latter, when the walk appeared to be an exceptional rather than a regular occurrence.
4. Give Suggestions... Carefully
Not all donors are created equal. Whether first-time donor or seasoned philanthropist, offering suggested donations can help guide their giving with positive results.
“Small changes can impact people’s choices, especially for people who aren’t sure what their actual preferences are,” says Urminsky, who is conducting research with Indranil Goswami, assistant professor of marketing at the School of Management at the University at Buffalo. Urminsky and Goswami find that setting higher default donation amounts increases how much a donor gives, but can reduce the number of donors. When targeting likely donors, suggesting larger amounts can be beneficial. If boosting participation is the primary goal, setting a low default can increase donation rates.
When setting default donations, understanding your donors and their commitment to giving is key.
In an era where the reputation of a business is driven heavily by corporate social responsibility (CSR), charity partnerships have many benefits for corporate companies. Read on to find out how a charity partnership can enhance publicity and improve brand awareness.
Written by: Gary Drew on behalf of HR Technologist. Read the full article here.
The reputation of a business is driven heavily by corporate social responsibility (CSR) these days and is an element that every organization should be growing. This article looks into the importance of charity partnerships and how they allow the ability to differentiate a brand - in terms of status, employability, and value. Of course, this doesn’t mean that you should set up a partnership with every charity that you come across; the not-for-profit organization that you choose to support should reflect your business’ values.
A Value-Driven Approach
Workers are increasingly seeking employment in organizations that are meaningful to them and are in line with their own values. In fact, millennials have been known to take pay cuts in order to work for a company that is aligned with their own values and purpose.
In addition to attracting and retaining like-minded and motivated employees to your organization, a strong CSR strategy creates a community and gives employees a sense of purpose. It helps humanize corporate organizations and, in some cases, helps to identify a brand’s purpose - giving an idealistic view of how you want to appear to your audience.
Charity partnerships are often more effective and beneficial than donations as they pave the way for new sources of income. The announcements of such collaborations also enhance publicity, leading to improved PR opportunities and brand awareness. Additionally, these types of partnerships can help towards combating national and global crisis situations, such as, unemployment, climate change, homelessness and other issues.
There are many instances that show just how strong a corporate charity partnership can be and the difference they can make. Take SOFII’s fundraising masterpiece, ‘I Wish I’d Thought of That’ as an example. This campaign is based on the alliance: ‘Gay and Lesbians Support the Miners’, which raised £11,000 to support the Miners’ Strike (in 1980’s money) whilst overseeing the first commitment of LGBT rights into Labour Party Policy motion in 1984 - thanks to the block support of the National Union of Mineworkers. The original campaign faced many challenges as it was an attempt to raise funds and encourage support for an unpopular cause, but this just created more awareness than anticipated.
Despite being an unlikely union, it’s one that all organizations can learn from. When choosing which charity to approach and collaborate with, you should be asking yourself the following:
What should you look for in a charity partnership?
A partnership is a two-way thing and both the company and charity should complement and benefit from each other in order for it to be successful. It’s important to make sure that the reasoning behind the partnership is also aligned with the customer’s needs and interests.
CSR efforts – as discussed before – help to humanize a brand, which is important as purchasing decisions are often based on emotional reasons. So, if your target market has an interest in tackling environmental issues, teaming up with a charity that supports this cause, will have more of an impact than if you were to endorse a homelessness charity, for example. In addition to a relevant cause, what else should you be looking for in the charity that you decide to team up with?
Enthusiasm and Integrity
The reputation, attitude, and enthusiasm of charity are very important aspects to look for – it is important to strike a partnership with a charity, which shows a willingness to go the extra mile and tenacity to deliver results. Corporate partnerships will play a huge role in the reputation of your business, so it is important to ensure that you are making the right decision. It is not uncommon for charities to be victims of a scandal or crisis and teaming up with an untrusted charity would be a risky move.
Professionalism and Collaboration
The ability to work closely together and align corporate communications in a professional manner is important. You need to know all about your partner’s upcoming news and announcements in advance. If they are planning to carry out a controversial campaign or announce some negative news that might impact your business, it is important to be prepared for press enquiries and interviews, so make sure you have the ability for strong communications and forward planning abilities with relevant contacts.
In addition to having aligned objectives and goals, your charity partnership should also offer long-lasting benefits. It is important that the charity you decide to partner up with can be upfront and transparent about how you can work together and the benefits that they can offer.
Whether this is a dedicated page to you on their website, a chance to be a part of photo opportunities and other public relations opportunities or even invited to corporate events, it is beneficial to work closely together so people (stakeholders and customers) are aware that you are a part of endorsing that particular charity.
Written by: Elina Trang and YeonJae Choi for AdWeek
In today’s socially conscious environment and political climate when a company takes responsibility for its actions and the subsequent impact on communities, employees and stakeholders, the results go a long way.
This is no secret to companies in various industries. The Sustainable Investment Institute (Si2) recently reviewed the current state of companies’ sustainability reporting and reported that websites of 92% of S&P 500 companies included disclosure on sustainability, with 395 companies (78%) issuing full reports on the subject. The rising role of chief sustainability officers (CSO) is itself an indication for sustainability’s coming of age. In 2000, no one has heard of such a job title in the corporate world, but the role of CSO has become more and more important as consumers expect companies to address their impact on the environment and share responsibility in solving some of the world’s biggest problems.
Further along the road, investor interest in environmental, social and governance (ESG) factors of corporations has also soared. Sustainable investing constitutes a major force across global financial markets. Socially responsible investing has grown by 34% to $30.7 trillion over the past two years, according to the latest report from the Global Sustainable Investment Alliance (GSIA). Responsible investment now commands a sizable share of professionally managed assets in each region, ranging from 18% in Japan to 63% in Australia and New Zealand. The largest three regions based on the value of their sustainable investing assets are Europe, the United States and Japan.
In today’s socially conscious environment, customers are willing to spend more of their money with businesses that prioritize corporate social responsibility.
Multiple facets of the subject of sustainability have been examined by academic researchers. At Kent State University, marketing professor Christopher Groening has been studying different micro- and macro-level conditions through which customer satisfaction and corporate social responsibility affect firm value. Professor Groening launched Corporate Social Responsibility Public Perception Quotient, CSRPPQ. The goal of this project is to collect and analyze consumer perceptions of corporate social responsible and irresponsible activities. More than 36,000 consumers have taken the survey. CSRPPQ can show firms where consumer perception of firm CSR activities differs from firm CSR endeavors. Thus, a firm can understand when it should devote more resources to create greater awareness of their CSR activities. Consumer perception is important to monitor because perceptions drive actions. A firm’s CSR actions affect the consumers’ perception of the firm and their choice of relationship with the firm.
What does this all mean for businesses? In today’s socially conscious environment, customers are willing to spend more of their money with businesses that prioritize corporate social responsibility. Improving CSR business practice and CSRPPQ not only help build a positive brand image, but also have a positive impact on improving customer loyalty and contributing directly to the bottom line, as shown in the examples below.
In spring 2019, IBM’s Chicago office opened its door to the members of the American Marketing Association collegiate chapter. Undergraduate and MBA students learned about ways that IBM differentiates their strategies by focusing on people, process, technology and research in the ever-changing world. IBM especially shared the value they have placed on sustainability and how they are addressing sustainability areas with their technology. IBM has been developing the ways to provide Africa with enhanced solutions to their infrastructure, such as water quality management and healthcare, by leveraging IBM Watson’s capability under the name of “Lucy Project.” With this project, not only is IBM consistently putting efforts into creating further sustainable innovation and new business opportunities, which align with their mission statement, and they are also contributing to sustainable growth of the whole world.
In a different industry but in a similar vein, Patagonia’s recent announcement regarding limiting sales of certain products in an effort to minimize ecological damage bolstered their brand personality: passion toward the environment. The Patagonia Nano Puff Vest, also known as the iconic Power Vest and considered the gold standard of the industry, will no longer be sold to some firms. The company is getting more selective in terms of which corporate sales clients they take because it wants to focus on selling to do-gooder companies, companies with a charity element or those committed to supporting social causes and protecting the environment. With this bold move, Patagonia will be able to convey its core messages to consumers more effectively and develop consumer trust simultaneously by saving the planet audaciously.
The fact that this announcement triggered a market shock shows it already has a strong brand power and identity. Patagonia is also communicating its core brand values, which highlight the beauty of integrity and durability, by releasing a documentary film “Artifishal” depicting the loss of wild fish habitat, which is attributable to human arrogance to nature. Similarly, Tesla’s consistent endeavor to developing the future of zero emissions, such as generating clean energy and expanding global Supercharger networks, has boosted the overall public engagement with the concept of sustainability.
Today’s consumers want companies to be honest and transparent with what they do. In addition to demanding products or services that are accountable for social and environmental impact, they are becoming more aware of the importance of CSR and are eager to be part of it. In light of the shift in consumer preferences toward being more socially and environmentally conscious, concentrating on the theme of sustainable future will offer values to companies and to the society at large. As the business competition is getting fierce and essential natural resources are depleting more rapidly than we expected, corporate sustainability is indispensable for marketers to draw long-term growth and be more competitive.
CSR and corporate sustainability go well beyond specific concerns about exploiting resources ethically and economically. These are effective approaches for businesses to build long-lasting and genuine relationships with consumers. Many companies have kept abreast of social problems and environmental challenges and turned them into new economic opportunities. They are likely to have a high CSRPPQ, a healthy relationship with their customers. Those with less than ideal CSRPPQ need to spend more effort doing good or make their CSR positions and endeavors are known. In marketing communications such as advertisements or promotional messages, companies need to be aware of and sensitive about environmental topics. Otherwise, they may have a big price to pay from consumer backlash. Overall, communicating your core CSR values and your related actions will help build a more loyal customer base.
Want your company to be more involved? Great. Ask your employees what they're passionate about.
By Tom GimbelFounder and CEO, LaSalle Network@TomGimbel
Published by INC. Magazine on February 26, 2016
Over the weekend, I joined about 50 of my employees (that's around 1/3 of the company) at Dance Marathon benefiting Lurie Children's Hospital in Chicago. It's an eight-hour dance fest that raised almost $400,000 for the foundation. My company has participated for four years, and two years ago I decided to make us a corporate sponsor.
So what's unique about that?
Our involvement with Dance Marathon didn't start with me. It's not my charity. It wasn't my idea; I wasn't involved at all.
In fact, when one of our employees started promoting it internally, I was irritated because before we knew it, we could have hundreds of emails floating around for any charity, and that can result in apathy due to saturation.
When I voiced this concern to the employee who sent the email, she told me that she wasn't the only one involved. There were four others. Then five. Then ten.
You get the picture.
So I decided to participate with them, and my kids have joined us almost every year. Last year we had over 30 dancers. This year, over 50.
The point is, I allowed my employees to sell me on their passion. Rather than as a CEO, force my passion on them. In almost 18 years, I've never forced an employee to donate time or money to a charity of "mine."
I've seen too many company leaders make that mistake and force their employees to participate in something, rather than letting them develop a passion.
As a CEO of a high-growth company (doubling sales at least every five years), I ask a lot of my team. They don't have to support my charities. But seeing them get passionate about a charity on their own and working hard to raise money on their own motivates me. It shows me what they are all about -- in their job and outside of it.
The ironic thing is, the people who are the most involved in the charity are huge producers at work. They've all been with the company at least four years and they all work hard.
I am always a bit skeptical of the employee who wants to only talk about philanthropy, especially when they've only been with a company a few months. But I know that the reason so many employees participated was because it was led by key influencers of our company.
Of the four, only one is in management, so it's truly peers leading peers. It's awesome. Now I'm passionate about the cause, which creates more synergy for them and not so coincidentally has helped business, as well.
Doing well for others doesn't have to be mutually exclusive to helping your business.
So my advice is don't just donate to your own causes; let your employees' passions help guide you. The important thing is giving back, but creating an environment where your employees can lead you is motivating and creates passion.
Our brains are hardwired to serve. Here is why businesses and their employees benefit from embracing meaningful causes.
By Susan SteinbrecherCEO, Steinbrecher and Associates@SteinbrecherInc
Published by Inc. Magazine, May 31, 2019
At a recent celebration for Harvard Business School's Class Day, speaker Michael R. Bloomberg, extolled the value of graduates aligning themselves with companies that were deeply committed to philanthropic efforts, stating that at Bloomberg, "...philanthropy gives us a competitive advantage in recruiting and retaining talent -- and it's as good for the bottom line as anything a company can do."
Literally translated, the word philanthropy means "love of humanity." By very definition, philanthropy is only philanthropy when it stems from giving without personal gain. It begins and ends with a selfless motive -- that of helping one's fellow man without seeking recognition or reward.
Most of us know that charity is its own reward. The true wealth of charity is measured by good deeds, not ego and material gain. That's why many affirm that they get back far more than they give. In other words, what they receive is the joy of love in action, the manifestation of their gift of time or money in such a way as to make a visible difference.
Interestingly, good people doing good work experience benefits that go beyond just their contentment in the knowledge that they are advancing the well-being of humanity. A well-known study examined the brain activity of a group of people, each of whom was given money ($128) and asked to make choices about whether to keep the money for themselves or to give some or all of it to charity anonymously. The outcome was fascinating. The participants who gave the money to charity experienced an extremely high level of pleasure. The researchers concluded that, "The warm glow that many donors get from giving to charity involves the same brain mechanisms that evoke pleasurable sensations after sex, eating good food, and using heroin or other drugs."
Companies that embrace philanthropic efforts enjoy significant advantages that contribute to the mutual benefit of both management and employees on every level such as:
Loyalty and morale rise.
This occurs in direct correlation to the enhanced sense of personal engagement and connectedness of the employees since they are proud to be associated with a company that cares and does good for others.
Employees experience an increased sense of personal satisfaction.
The reward that goes with being part of a meaningful community effort is something bigger than themselves that makes a difference in the lives of others.
This happens at a higher level since all employees are working side by side together towards a common goal.
A sense of accomplishment.
The collective group can work together to achieve something for the community while serving as a profound team-building event for the employees.
We've been taught since we were children that it is better to give than to receive. This Chinese proverb illustrates the intrinsic worth of charitable works:
"If you want happiness for an hour, take a nap.
If you want happiness for a day, go fishing.
If you want happiness for a year, inherit a fortune.
If you want happiness for a lifetime, help somebody."
Blackbird Philanthropy Advisors is a social enterprise devoted to Driving impactful and innovative change through philanthropy. Based in South Bend, Indiana, USA.