Lexington, KY - Supporting a charity or cause can serve a dual purpose of doing good for society and doing good for your bottom line, but few companies are successful at both. Several recent studies provide insight into how to achieve success. The takeaways? Your customers must know about your good deeds, your philanthropy must be aligned with the trends relevant to your business, and philanthropy must be integrated within all levels of your company.
Lines between philanthropy, cause marketing, corporate social responsibility, market development and branding are increasingly blurred. For example, Nike's recent report outlines "the next evolution of Nike's strategy from a risk management, philanthropic and compliance model to a long-term strategy focused on innovation, collaboration, transparency and advocacy to prepare the company to thrive in a sustainable economy ... Nike sees Sustainable Business and Innovation as an integral part of how we can use the power of our brand, the energy and passion of our people, and the scale of our business to create meaningful change."
Most companies may not be quite ready to embrace Nike's new strategies, but there is much that can be done on a smaller scale.
A 2010 study by the Committee Encouraging Corporate Philanthropy (CECP) on Measuring the Value of Corporate Philanthropy pointed out that philanthropic initiatives provide channels through which companies can meet core business goals and create long-term financial value - by increasing employee engagement, customer loyalty, reputational capital and market opportunities. Companies must define the focus of their philanthropic efforts, gain public recognition for their programs and allocate appropriate CEO time to philanthropy. It cites three keys to philanthropic success: deep involvement from the CEO and board of directors, alignment between philanthropic and business strategy, and management of philanthropy as a business investment.
A McKinsey & Co. global survey in January 2008 revealed that corporate philanthropy can be an effective tool for companies trying to meet consumers' rising expectations of the role businesses should play in society. However, the survey also suggests that companies aren't using that tool as well as they could.
McKinsey found that only about a fifth of respondents said their corporate philanthropy programs were very or extremely effective at meeting social goals and stakeholder expectations. Their companies took a somewhat different approach than others did: their programs were more likely to address social and political trends relevant to the business and to be influenced by community and business needs.
A small group of respondents said their companies were reaching beyond traditional corporate goals for philanthropy programs-such as enhancing the company's reputation or brand-to pursue more concrete business goals, such as gaining information on potential markets and informing areas of innovation.
Let's take a look at a few approaches. Online voting campaigns are hot right now. A twist on traditional grant making, they drive traffic to your site and create a buzz. Consider Pepsi's Refresh Everything campaign. Consumers go online to vote for up to ten great ideas each day for a month, with 1,000 ideas accepted per month. The Refresh Web site states: "We're looking for people, businesses, and nonprofits with ideas that will have a positive impact. Look around your community and think about how you want to change it."
Funded ideas have included large and small ideas such as "provide excellent teachers for all children," "use fresh produce to fight childhood obesity in S. Illinois schools" and "employ American Heroes," to name only a few. These are ideas to "refresh" communities, just like "every Pepsi refreshes the world." Clever, and effective.
Targeting the company's customer base and bringing those customers into stores is a focus for Macy's, best known for its sponsorship of Go Red For Women, the American Heart Association campaign for awareness and prevention of heart disease in women. Macy's stores participate in National Wear Red Day. In the past five years, Go Red has received more than $19 million from Macy's and its customers. Macy's raised more than $9.1 million in one day through its third annual Shop for a Cause charity shopping day, which has raised nearly $28 million in three years.
Speaking of red, (Red) is a pure cause marketing campaign launched in 2006 to help eliminate AIDS in Africa. Part of the proceeds (usually up to 50 percent) of every (Red) product is donated to the cause, with Apple, Nike, Gap, Starbucks and other leading brands participating.
Continuing along the color theme, perhaps the most easily identified cause marketing uses the ubiquitous pink of Susan G. Komen For The Cure. Seemingly every product in the United States now comes in pink. The latest is the KFC pink bucket of chicken. Fifty cents is donated to Komen from the sale of each bucket, with $1 million minimum pledged by KFC.
Traditional corporate giving accounts for roughly 5 percent of total U.S. giving and is on the decrease as corporate budgets strain under the recession. Many charities rely on traditional giving by local companies, but increasingly consumers can surf the Web, shop, eat and work out for a cause.
So how about your company's giving? Is it related to your brand? Does it engage your employees? If your company is doing good things, let your customers and your shareholders know. Seek out effective nonprofit partners with strong brands to work with. Make your "doing good" good for business too.
Anne E. Nash, J.D., is principal and owner of My Giving Advisor, LLC. (http://www.mygivingadvisor.com).