Benefit from
Learning How To Give
By Doris Rubenstein, PDP Services
CityBusiness, March, 17, 2000
The Dec. 19, 1999 Star Tribune reported that Minnesota's traditional reputation as a leader in philanthropy was beginning to erode. According to the Newtithing Group, as quoted in the article, Minnesotans could contribute an extra $1.5 billion without much pain. So why aren't they?
Part of the reason might well be that some Minnesota businesses just don't know how to do it.
Minnesota business leaders like General Mills Inc., Dayton Hudson Corp. and 3M Co. have been in the giving business for nearly as long as they've been profitable enterprises. Over the years, they have learned the business of philanthropy and have been instrumental in defining it through their foundations.
Other businesses prefer to work through community foundations or to give directly from annual profits. They give large grants to build hospitals and libraries and small contributions to Scout troops and community food banks.
All of these companies give because they know how to. In other words, giving is a part of their annual financial plan.
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So why don't many other businesses know how to give?
First of all, most entrepreneurs start businesses in order to make money. Giving money away is not part of their business plan.
Secondly, making giving a part of doing business is not something that appears prominently in the curriculum of most business schools. It's not taught.
Thirdly, smaller businesses may think there is nothing in giving for them. This is where they are wrong; they can truly benefit from learning how to give well and wisely. Then they can take what they've learned, incorporate it into their business plan and do well by doing good.
What can any business, large or small, accomplish by making a plan for giving?
On the most fundamental level, giving to qualified non-profit organizations generates tax deductions. All businesses give to charities on an involuntary basis, whether they know it or not. Some of their tax dollars are granted by government agencies to a variety of non-profit groups. Voluntary donations are tax-deductible and give you the choice as to how your donation is used.
A rational giving plan also can make a real difference in employee morale.
When the boss makes all the decisions without a formal policy, giving can be seen as arbitrary, and it well might be so. On one day, the boss agrees to support an organization brought to her attention by one employee. The next day, she declines to respond to the request of a second employee for no other reason than she wasn't in the mood. The result? At least one employee comes away disappointed, angry, puzzled or demoralized.
Well-defined policies and procedures eliminate vagaries and the appearance of favoritism.
Additionally, firms uneducated in giving may be inefficient in the way they use personnel to administer what grants they do make. That may cost them more than the value of the grants they make to charities.
Smart giving can transform business philanthropy into social investing. Wise, planned social investments will reflect the company's values and goals, help to create a community that offers a better quality of life for employees, and builds an economy that will provide a stronger market for the company's products and services. Is the company strictly local in its production and sales? Do particular institutions provide entry-level employees? Make social investments that make sense in these areas.
A basic tenet of ethical business is delivering value for the purchase price. Purchasing managers comparison shop to make sure that the company is getting the most for its investment. Why should it be any different when a company is making a social investment? Putting money into a sure thing avoids the risk of the organization losing or abusing the investment. On the other hand, a wise social investment could help make or break a new initiative.
Are you sure you are getting everything you deserve for your investment? The National Society of Fund Raising Executives has issued a Donor's Bill of Rights. Find out what they are and make sure you are getting them.
How about publicity and recognition for giving? If a company wants visibility, that should be part of its giving strategy. Those who give over 2 percent of their pre-tax profits can qualify for the Minnesota Keystone Program. Trade and business associations grant awards to good citizen members.
Learn how to give. Learn what organizations exist that promote your company's mission. Learn from the example of others that have successful partnerships with non-profit groups. And learn your donor's rights. Then make a plan to give and stick to it. When all parts of the business community give, not just the traditional leaders, we will recover and maintain our proud philanthropic reputation.
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