Everybody’s Interests
By Doris Rubenstein, PDP Services
Minneapolis Star Tribune, February 11, 2001
In the January 25, 2001 issue of the Star Tribune,
Patrick Kennedy reported that the Minnesota Council on Foundations and several other local
philanthropic organizations have created the Building Business Investment in Community
(BBIC) project. Part of the collaborative’s mission is to research the amounts given
and the giving styles of Minnesota companies, from one-person shops to multi-national
corporations.
The resulting report will either confirm or deny the
concerns of many that the State is losing social capital as prominent headquarters
companies depart Minnesota, taking their philanthropic dollars with them. This information
will expand on and complement three important national reports issued during the past
year, all containing important information for Minnesota businesses who want to succeed in
the new economy. The authors of the national studies offer empirical proof indicating that
corporate citizenship programs can only enhance the bottom line.
If this is so, why aren’t astute entrepreneurs
instituting them in their companies? One reason is that lenders and investors don’t
require it to be a part of a business plan. With the evidence clear that corporate
citizenship is a winning strategy, perhaps they may start requiring it in the future.
Making a successful, strategic plan requires knowledge and
guidance. The opportunities for learning are available. Hamline University and Augsburg
College are both offering short courses in designing corporate citizenship programs. The
Minnesota Council on Foundations offers the Tool Kit for Giving. Equipped with the
know-how of giving, it’s now up to Minnesota’s new entrepreneurs to do even
better in business by doing well for their employees and our community.
Let’s look at some of the information and conclusions
offered in the existing reports:
In 2000, the Conference Board issued Consumer
Expectations on the Social Accountability of Business, America’s Charities
published Employee Workplace Campaigns at the Crossroads, and the Council on
Foundation reported on Measuring the Business Value of Corporate Philanthropy. One
fact came through loud and clear in all three reports: Both consumers and employees expect
business to actively help build a better society and reward those that do.
The reports found that customers favor businesses with good
corporate citizenship programs. As a result,
- They are likely to continue doing business with the company,
- More willing to recommend company offerings,
- Less susceptible to switching to a different company for a
better financial deal, and
- Say that they would choose the company again if picking for
the first time.
The assumption that a low bid is the end-all in gaining
contracts and sales is somewhat of a fallacy. The fact is that 46% of those surveyed in
the Conference Board report stated that they were strongly influenced in favor of a
particular company over another because of its positive social image. On the other hand,
49% refused to do business with companies that did not meet their standard of social
responsibility.
In fact, combining all factors that influence the
public’s opinion of business, the surveys showed that consumers care more about brand
quality and company image and reputation than they do about a company’s management or
business strategy.
This is something that company managers and company
investors should heed carefully because it is the consumer who ultimately decides a
company’s success.
This lesson is particularly important for newer, mid-market
businesses who are still building product and service lines, and facing stiff competition
from larger, well-established firms that have brand recognition and the advantage in
offering a higher level of security and benefits to employees.
Employees have come to view corporate citizenship programs
as part and parcel of a benefits program. Nearly two-thirds of employees surveyed believe
that their companies should sponsor a corporate citizenship program of some sort.
The reports concur that good corporate citizenship provides benefits to business as
employers by improving employee relations in terms of recruitment, morale, loyalty,
motivation, and productivity.
Still, America’s Charities reports that there has been
a decrease in the percentage of companies with workplace giving programs, down to 25% last
year. What is the reason for this decline?
The report points to the growth in medium and smaller
firms. The real growth in employment is in smaller, entrepreneural businesses that lack
the history of corporate citizenship, particularly in workplace giving programs like the
United Way.
This fact is illustrated in the stagnant membership figures
for the Minnesota Keystone Program, our community’s famous Two Percent and Five
Percent Clubs sponsored by the Greater Minneapolis Chamber of Commerce. Keystone’s
membership has hovered around the 260 mark for close to five years, and as the program
approaches its 25th year, it has set a goal of 300 members at its anniversary
celebration. Right now, 23% of Keystone member companies have over 500 employees and over
50% represent just two industry sectors: Business/Professional Services and
Finance/Insurance. This is disproportionate to the role these kinds of companies play in
Minnesota’s current business economy.
The Keystone Program offers good corporate citizens with
recognition and visibility. The Council on Foundations cited two additional overall
benefits of good corporate citizenship, in addition to the benefits of improved employee
morale and improved customer relationships already mentioned. They found that such
programs, particularly when visible and rational
- Improve business performance, citing improved bottom-line
returns, increases in competitive advantage, and encouraging cross-functional integration;
and
- Enhance marketing efforts by helping to create a positive
image, support higher prestige prices, and boost government affairs activities.
The BBIC will need the cooperation of all parts of
Minnesota’s business community to create an accurate picture of where the State
stands in terms of business philanthropy. What Minnesota needs is for their results to
reflect a positive, growing culture of business philanthropy that is consistent with our
State’s long history of leadership in this field. |
