Making Worthwhile
Worth It For Company
By Doris Rubenstein, PDP Services
The Business Journal, June, 2002
It’s a question that most
business ask: Is the money we’re giving away to charities making
a difference for our company? It’s a hard one to answer
empirically.
Companies of all sizes spend
millions of dollars annually in grants and the administration of
corporate foundation and citizenship programs. No well-run
business would invest this kind of money if there weren’t some
form of benefit coming back to the company itself. Or would they?
Evaluation should be part of every
good corporate citizenship program. Often, evaluation only
addresses external successes: measuring results of the
grant on recipient organizations and their beneficiaries: How many
inner-city kids went to summer camp; what was the attendance at
the concert, etc.?
Companies with formal corporate
citizenship programs build external evaluation of the project
supported into the application process. In Highland Bank’s new
community involvement program, it is clear in both their
guidelines and application form that detailed reports are required
on major grants. If fundraisers don’t provide these data, they
shouldn’t waste their time applying for a renewal or a second
grant for a new project.
Can business measure the direct
dollars-and-cents payback to the company for the grants and gifts
made to charity?
The Contributions Academy (www.contributionsacademy.com
), a South Carolina-based educational consulting group, offers
some interesting guidelines. Curt Weeden, President, was quoted
recently in the on-line magazine issued by Changing Our World (www.changingourworld.com).
He made two strong recommendations to help businesses measure
corporate citizenship’s impact on the bottom line:
- Know what it is that you want
measured.
- Develop the terms of
measurement.
An important part of doing this
successfully, according to Weeden, is finding the right partners
to cooperate in measuring.
The first partner is the non-profit
grantee. Information about administrative and fundraising costs on
all 501 (c) (3) charities can be
gleaned from the IRS Form 990, but those data might be incomplete
or misleading. The December 9, 2001, issue of the StarTribune reported
that while experts in the non-profit field admit there is no real
conspiracy to hide financial facts, many small charities simply
don’t keep good enough records to accurately distinguish
non-program costs. Business donors should therefore determine that
the charity they are supporting is capable of giving them the
cold, hard cash facts before writing the check in the first place.
For Highland Bank, it’s easy to
measure one thing they want from their partner organizations:
visibility. Visibility can be demonstrated by plaques and
certificates, mentions in newsletters and articles, listings in
programs and announcements. Organizations receiving funds from
Highland Bank will send them copies of all these devices, and
invite Highland Bank representatives to events where they will be
acknowledged publicly. What does it bring to the bank? An
accurate image of the bank as a good citizen, one where people
will want to do business.
Companies who are serious about
corporate citizenship designate a staff person to evaluate the
programs. Companies adhering to the Baldrige Award criteria for
total quality management, as promoted by the Minnesota Council for
Quality, subject their grants programs to the same stringent
examinations as for the rest of their operations.
Some internal results are easier to
quantify than others, and don’t require outside assistance to
identify. Employee matching gifts programs and employee
volunteerism can be easily measured: just count how many
volunteers participate. These kinds of programs are important
indicators of employee morale and commitment to the company.
Larger companies often call on
independent evaluators as partners to determine a grant’s
internal effectiveness. Independent evaluators can be an
educational institutions like the University of Minnesota, or
private firms such as Rainbow Research in Minneapolis. The
Committee to Increase Corporate Contributions
(www.corphilanthropy.org
) and Business for Social Responsibility (www.bsr.org)
also offer guidance for evaluating internal effectiveness.
Most experts in the field agree,
though, that the real benefit of corporate citizenship cannot be
broken down to bottom-line figures. The fact that so many
companies are deeply involved in these activities shows that the
benefit to the company, regardless of the bottom-line, is the
satisfaction of being a responsible member of the greater
community.
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