| It’s inevitable. As soon as your company
becomes profitable – often before it becomes profitable
– someone comes knocking on your door for a charitable donation.
The ask can take numerous forms: A customer
who bought over $200,000 in products last year asks for your
company to sponsor a hole at a golf tournament for $5,000. An
employee of long standing approaches you to provide the cost of
bus transportation for his daughter’s high school band’s trip
to the Thanksgiving Day Parade in New York City. The battered
women’s shelter down the street from your plant requests a
donation.
What’s a business owner to do?
Your reaction to each of these scenarios can
result in a positive or negative effect on the company’s bottom
line.
Consider the first case of the golf
tournament. What questions should you ask yourself when responding
to this request? Do we have $5,000 to donate? If not, what
amount do we have? How important is this customer to us?
Was that $200,000 a one-time transaction, or can we expect future
orders? How much do we depend on them to provide referrals? If we
give this year, will they expect us to do it every year? Which
charity will benefit? How much of that $5,000 will be
tax-deductible? What will our company receive as a result of the
donation? Will there be media coverage that will give us positive
visibility? Are there other sponsors with whom we might want to do
business in the future?
With all these questions, there still is the
issue of who will represent your company in the tournament, time
factors, and other issues internal to your company that you may
have to address.
What about the employee request? This raises
another set of questions. Is this the first time this employee has
asked for the company’s support, or has he asked you to do other
projects like allowing him to take Christmas wreath orders from
other employees for his son’s Boy Scout troop? Will the children
of other employees be involved in the trip as well? While the band
will get great national exposure, what kind of exposure will your
company get, nationally or locally? Let’s not forget to check
the tax-exempt status of a school band either!
What started out as a simple request turns
out to be a project with implications for personnel, finance, and
the marketing and advertising departments.
As for the battered women’s shelter, what
does that have to do with your widget manufacturing
business? Think again. As you look at your employees, you realize
that 80% of your assembly line are women, 100% of your clerical
staff are women, too. And of your sales and management team, 40%
are women. Your human resources staff has posted flyers from the
shelter in the lunchroom and by the timeclock. Could it be that
the H.R. staff thinks that some of your employees might need to
use the shelter some day?
A little altruism tempered with enlightened
self-interest might not be such a bad thing when it comes to
keeping valuable employees.
How can you address these situations so that
they become win-win for all involved?
Here’s how one Minnesota company tackles
the issue of good corporate citizenship. The company, a high-tech
firm in the Twin Cities suburbs with some 200 local employees and
another 50 in five locations around the country, recently
developed a plan to deal with donations and volunteerism. This is
how they might address the scenarios described above.
Golf tournament If the client is one
with whom they’ve established a "preferred client"
relationship, they will honor the request to a maximum of $2,000.
If the charity is one of those on the company’s own priority
charity list, they’ll add another $1,000. If neither of these
criteria is met, then they will make a token $100 donation to the
charity in the client’s name. This way preferred clients are
cultivated, priority causes get support, and all customers get a
positive response.
Band sponsorship The company agrees
to donate $500 if four other businesses donate the same amount.
The company will donate an additional $100 for each $100 donated
by the employee or other employees for the project. The band must
agree to put a sign on the bus announcing that the names of your
company and other trip sponsors. This way, the money can be
disbursed from the advertising and marketing budget. By issuing a
challenge to other potential donors, the money they donate is
leveraged several times. All of this is contingent on the
condition that the employee has not requested donations from the
company in excess of $500 in that fiscal year already.
Battered women’s shelter The
shelter is not one of the company’s priority charities, but the
corporate citizenship committee has agreed to conduct a volunteer
effort on the shelter’s behalf. Working with the shelter’s
development officer, volunteers from the company will make
fundraising calls from the company’s customer service center
after hours. This should raise far more than the token donation
they requested in the first place, save the shelter the telephone
costs, and give your employees a meaningful and enjoyable
experience together – especially with the pizza and pop you’ll
provide for volunteers!
The company is able to comply in one way or
another with all the various requests put before them because they
have a corporate citizenship plan. The plan allows them
- to prioritize the projects they consider
for support,
- allocate finite financial resources,
- address the various constituencies
seeking donations.
The outstretched hand seeking donations will
return. Two things can happen then. They might want the palm
greased again. Or, they may extend it in sincere appreciation of
the generous and constructive way you gave to help the charity and
support the interests of your customers, employees, and neighbors.
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