NONPROFIT: A Good Strategy for a Slow Economy
Column by David Miller
These past few years, you've probably been focused on making sure your business survives in the down economy. So why is now a good time to think about philanthropy?
Giving to the community is good business. When your business gives to community causes, you buy goodwill that can't be purchased with advertising or marketing. Firms with strong community reputations grow faster and are better able to withstand setbacks.
Customer loyalty. There is widespread evidence that giving by a business creates customer loyalty and accrues to the bottom line. Customers, especially younger customers, increasingly look at a company's philanthropy before making purchasing decisions. The success of Ben and Jerry's Ice Cream is one of hundreds of such examples.
Employee loyalty. During the economic downturn, we've been asking employees to do more with less -- often taking salary cuts or adding responsibilities without extra pay. While the slow job market may keep employees from making as many moves, we all know that the best employees often have opportunities, even during a recession. So how do you keep your employees happy and loyal? Evidence shows that workers are attracted to companies that are engaged in the community. The cost of high turnover from dissatisfied employees far exceeds the investment in philanthropy that will increase employee retention rates.
A stronger community. The contributions of local businesses make Metro Denver a better place to live through improved education, health care, human services, and cultural offerings. Improving our community attracts new businesses and workers to locate here which in turn strengthens our local economy.
How to get started. Once you've committed to giving back to the community, how should you proceed? There's no right or wrong way. What's good for one business doesn't make sense for another. You may choose to invest deeply in one area, such as education, or to spread your giving broadly. Some businesses will link their charitable activities with their business activities -- such as a restaurant that gives coupons for free meals to charity auctions - while others will give to the places where employees or owners have a personal connection.
We've seen many of the most successful businesses involve their employees in deciding how to connect to the community. Some businesses give small gifts to the charities where their employees volunteer, or give employees release time to volunteer at their children's schools. The return to the bottom line comes when these employees remain loyal and become the best boosters your business could ask for in the community.
There are many different tools and vehicles available to help businesses manage their giving. One such option is a business advised funds at The Denver Foundation ... visit our website to learn more: http://www.denverfoundation.org/donors/page/business-advised-funds.
Mark Berzins of the Little Pub Company has created the "Little Pub Fund" to manage his giving. He tells us that he used to just cut checks from his company's checkbook to give to charities, but he - and his accountant - prefer having the Foundation handle the back-end and keep track of his charitable activities.
Regardless of the vehicle you choose, don't wait for the economy to pick up to get involved. When customers and employees see you taking actions (even small ones) now, they know you're committed to the community for the long haul. Feel free to contact The Denver Foundation for ideas on how to give.