Here’s the situation: you’re a small business owner, an executive at a large corporation or a retiree trying to decide what to do with your spare time and money.
You’ve decided you’d like to start trying your hand at philanthropy, and may even have selected a few causes you’d like to support in some way. But you’re not sure how to get started or which way to give.
Do you start volunteering? Would it be better to set up a family foundation or start a fund at an existing foundation? Should you organize a volunteering program to encourage your employees to get involved? How?
There are multiple paths each budding philanthropist or community-minded business can take to start giving back, and no one way is perfect.
Regardless of the path they choose, local business leaders are finding it’s important to start giving or contributing whichever way they can.
“We’ve seen an 11 percent increase in the last two-and-a-half years in corporate programs and corporate foundations,” said Jill Van Calster, president and chief executive officer of the Wisconsin Philanthropy Network.
The reasons vary from company to company, she said, but overall, there are a couple things driving the uptick in corporate giving.
Corporate citizenship
“They want to be good corporate citizens,” Van Calster said of the WPN’s corporate clients. “They want to be seen as concerned, as involved in the community. And they want to do it effectively.”
Being a good corporate citizen can have multiple benefits for a large corporation. It can give the company a friendlier image among consumers, forge lasting relationships with community partners and even support its overall business strategy.
“It’s not that members of the C-suite have suddenly discovered altruism,” wrote Daryl Brewster, chief executive officer of the Committee Encouraging Corporate Philanthropy, in a 2015 study examining corporate giving trends. “Rather, today’s instantaneous, transparent and hyper-connected exchange of data has spawned a new reality. In a world where all stakeholders – customers, neighbors, regulators and shareholders – can see inside the enterprise, leaders in the corporate sector have committed to an enlightened self-interest in societal investment.
“Conceiving and executing a ‘giving’ strategy need not entail a zero-sum construct that opposes ‘making money.’ Indeed, when corporate societal investment harmonizes with a company’s business strategy, the whole becomes greater than the sum of its parts.”
In other words, some companies have found that aligning their corporate giving with causes or initiatives in fields related to their own businesses can actually help their bottom line down the road.
Through its involvement with a nonprofit organization to tackle issues such as illiteracy, environmental problems or skills gaps, a company can discover new markets, improve a community’s pool of potential employees, or supplement its own research and development efforts.
Employees volunteering with an outside charitable organization in a related field may find themselves using their experiences to solve a supply chain problem or approach their work in a more innovative way.
Volunteering in a related field can also boost a company’s reputation in a given industry and give it more authority among consumers.
For example, national big box home improvement retailer Lowe’s Cos. Inc. has given $63 million to Habitat for Humanity since 2003 to repair or rehabilitate homes in struggling neighborhoods around the country. Lowe’s gave a $250,000 grant to Milwaukee Habitat for Humanity in June to fix up 25 homes in Washington Park.
On the local level, several manufacturing companies, including Milwaukee-based Monarch Corp. and Menomonee Falls-based Bradley Corp., have invested in workforce development programs at local schools to eliminate the skills gap in the local workforce.
The programs they support are helping to address important economic disparity issues in the City of Milwaukee by giving students and adults access to training that could help them land well-paying jobs. But those programs also are helping to fill their own employment needs.
Another example: WPN member Direct Supply Inc., a quiet but rapidly growing employee-owned company on Milwaukee’s northwest side that has become a major player in the senior living industry, has made giving to causes that address health and wellness issues among the elderly a priority. The issues employee volunteers or partner organizations encounter among seniors could help inform the design of existing products or spark the creation of a new product line.
“That’s the type of thing that’s always interesting to see – how their business model integrates with their giving model,” said Laura Worcester, WPN’s director of development. “It’s fascinating for us to see relationships like that.”
Recruitment
Van Calster said corporations that approach the WPN to develop or improve their giving mechanisms usually do one of two things: start a corporate giving program in which they give money to organizations their employees say they’re interested in, or set up a corporate foundation to begin awarding grants through a competitive application process.
And it’s no coincidence there’s been an uptick in the number of corporations that have approached the WPN for help getting started. In addition to a genuine desire to give back among some corporate leaders, getting involved with philanthropic initiatives is becoming a bigger deal when it comes to recruiting top-tier talent.
“Especially when you look at millennials,” Van Calster said. “They’re looking for companies that are corporate citizens. If you just pick maybe five or six businesses, go to their website, there will almost invariably be a community involvement or corporate responsibility section.”
To name a few, Kohl’s Corp., WEC Energy Group, Johnson Controls Inc., Rockwell Automation Inc. and MillerCoors LLC all have links to corporate responsibility, ethics or sustainability sections on the home pages of their websites.
In a recent survey of millennials in the U.S. – roughly 73 million people born between 1980 and 1996 – conducted by Gallup, participants reported a desire to not only have a stable, well-paying job, but also to be emotionally and behaviorally connected to the companies they work for.
“Millennials want to have high levels of wellbeing, which means more than being physically fit,” the report reads. “Yes, millennials want to be healthy; but they also want a purposeful life, active community and social ties, and financial stability.”
And according to the statistics, most employers have been struggling to engage millennial workers. Of the respondents to the Gallup poll, only 29 percent reported being engaged at work, defined as “emotionally and behaviorally connected to the company.” Worse, 16 percent reported being actively disengaged at work, meaning they were out to do damage to their own company. Around 55 percent reported not being engaged or being “checked out” at work, meaning they were not putting much energy or passion into their jobs.
And with 21 percent of millennials reporting changing jobs within the past 12 months, companies have been looking for different ways to both retain young talent and better engage the talent they have.
One way to do that is by increasing the company’s commitment to corporate giving.
“The concept of corporate responsibility is something that a lot of businesses take very seriously,” Van Calster said. “They really want to promote to their employees that they’re good corporate citizens as well.”
Getting started
Businesses can create programs to incentivize their employees to get out and volunteer. Some send out large groups of employees to participate in charity events such as runs, walks and bike rides.
Others have taken to giving employees a certain amount of paid volunteer time each year. Companies can choose to create their own foundations and hire an employee to manage it and administer grants.
If that’s too costly or time consuming, some corporate executives or company leaders may establish a fund within an existing foundation, such as the Greater Milwaukee Foundation, that will manage it for a fee.
Still other organizations join groups like the Wisconsin Philanthropy Network to get advice on which path to take or how to improve their existing philanthropic efforts.
“We get calls frequently from businesses, particularly when they have corporate giving programs as opposed to corporate foundations, and their giving program is not well structured,” Van Calster said. “I think they’re seeing a need to learn how to structure their program. Some of the individuals that are overseeing these programs may be new to this type of role. They’re coming in from other parts of the organization without a strong background in philanthropy.”
There are a number of different routes businesses can take to start giving, and regardless of how or why they chose to do so, there are always ways to improve.
But the most important thing is to get started.
