Working for a for-profit business doesn’t always feed the soul of employees and although it may not seem like a critical factor for most people, apparently, it is. In fact, the number three most important consideration for millennials when deciding to apply for a job is the company’s level of involvement with charitable causes, trailing behind what the company specifically does, sells or produces, and the company’s culture (Source: Millennial Impact Report 2014). Employees in profit-driven companies seek opportunities to feel fulfilled and a paycheck typically isn’t enough. Corporate philanthropy is one way to help satisfy that need and stimulate a more productive and loyal workforce. Charitable giving doesn’t just benefit employee satisfaction but it can foster customer loyalty and influence purchasing decisions. In a study published in the Harvard Business Review, researchers found that if companies choose causes that their customers care about, it can help drive sales (Source: Making Charity Pay, Harvard Business Review 2014).
Based on this knowledge, we’ve compiled three best practices that companies can implement when creating or enhancing corporate charitable giving programs.
1) Create Opportunities for Employees and Customers
Companies can create charitable opportunities for employees and customers to get involved in that create long-lasting, meaningful experiences that go further than writing a check. A group volunteering opportunity creates a team bonding activity and can foster customer loyalty. Research indicates competitive advantages of philanthropy for many corporations, such as Tom’s Shoes, where customers are willing to pay a competitive price because they know that they are helping donate one pair of shoes to a child in need with each purchase (Source: The Competitive Advantage of Corporate Philanthropy and Making Charity Pay, Harvard Business Review 2002 and 2014).
Employees have diverse interests, which means that a company should create different types of philanthropic opportunities in order to appeal to the masses. For example, our company, Affect, offers several charitable-based benefits for its employees as part of the “Affective Giving Program.” This includes Charity Days, where Affect offers employees two days off per calendar year to volunteer at a nonprofit of their choice. Affect also offers employees the option to donate to a non-profit and the company matches their contributions up to a certain dollar value. Additionally, the staff takes part in team building activities like the One Book at a Time program (which provides children with books and an employee pen pal), conducting a coat drive for New York Cares, and planning and hosting an annual birthday party for children living at a homeless shelter. This broad range of opportunities allows for each employee to find a program that they can feel passionate about.
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2) It Is Not All About the Money
Organizations sometimes first look to their budget to determine how much money they can give away to a cause, and many corporations ultimately assume that corporate philanthropy programs are too expensive to implement. However, effective giving programs are about more than just throwing money towards a donation. Other factors to consider aside from finances include time and resources. Cost-effective (or cost-less) philanthropic endeavors include time-off for employees to volunteer outside of work, opportunities to apply their skills to a non-profit cause at work, or providing pro-bono services, products or other resources, including use of an office or facility.
3) Rethink How You Choose Your Charity
Companies often try to match the charities they contribute to with ones that align with its business goals and industry. While this approach often makes sense from a business perspective, it may not inspire employees or customers to take action. Another mistake is initiating a program of giving that is solely based on the CEO’s passions. If companies want employees and customers to fully support the initiative and absorb the positive benefits of it, they must also provide programs supporting issues that staff and customers are care most about.
Employees’ connection to their company’s non-profit initiatives directly correlates with their motivation, so allowing staff members to select foundations of their choice is vital. For Affect’s 10-year anniversary, the company pledged to donate $ 1,000 to 10 different charities that employees chose. Each staff member nominated two charities and shared their personal connection to it. The touching, inspiring and sometimes heart-breaking stories moved the team to tears. It was as much a bonding and team-building experience as it was a charitable initiative. Ultimately it proved too difficult to chose only 10 worthy causes and the company decided to donate to each one.
Corporate social responsibility is more than just another box for businesses to check off. It attracts, strengthens and empowers company stakeholders, including employees and customers. Everyone tells you to “do what you love and you will never work a day in your life,” but not everyone has that opportunity. In the corporate environment, in the absence of that ‘greater good’ charity work motivates and fulfills that void. Through corporate social responsibility, employees and customers can feel good about working with an ethical and philanthropic company.