Giving for Growth (eBook)

Chapter Two

TRENDS IN CORPORATE PHILANTHROPY

A while back, I had the chance to interview my friend, Richard W. Smith, who is Regional President of The Americas and Executive Vice President for Global Support, FedEx Express at FedEx. Richard is son of FedEx Founder, Chairman, President, and CEO, Fred Smith. I asked Richard if there were important lessons he learned from his father that he could pass along as advice to others. One of Richard’s answers was an adaptation of the famous military adage, known as the “7 Ps”—“Proper Planning and Preparation Prevents Piss Poor Performance.” This adage has myriad variations now with the “5 Ps” and Fred Smith’s personal “6 Ps;” but just like the famous Boy Scout Motto, “Be Prepared,” proper preparation is an indispensable key to success in life and business.

For this reason, it’s important to understand the trends taking place in corporate philanthropy and cause marketing. It’ll help you construct the proper framework for leveraging these trends to make sound decisions for today and for the future. You’ll find these trends can be applied to you as an individual and to your organization, as well.

SOCIAL IMPACT AND PURPOSE IS NOW MANDATORY

In the past, corporate philanthropy primarily entailed writing a check. Today, however, business leaders and consumers alike have become much more discerning with heightened expectations for strategic reinvestment, physical engagement, and community impact. This means businesses must be proactive by reaching out, building partnerships with nonprofits, and leading charitable efforts, rather than being reactive and waiting for an organization to ask for support. It also means corporations must explore ways they can leverage ALL available resources for the greater good. This includes financial capital, human resources, and physical assets like buildings, conference centers, and equipment—all of which can be valuable to organizations serving the community. So, corporate philanthropy today is much more proactive and strategic, combining both financial funding and physical engagement to make a quantifiable impact in the community.

The significance of this supports the first of The Three Truths—understanding that money is a desired resource, but that people are needed to physically solve problems. Due in part to our country’s financial and economic crisis back in 2007–2008, consumers have realized the need for business leaders to take a far more encompassing approach in thinking long-term and addressing larger social issues that government alone cannot solve, such as health and wellness, education, and the environment. Corporate philanthropy has made many national headlines, but the bottom line is that consumers are now looking at Corporate America to be a part of the solution for our local and national problems. In fact, I’ll take it a step further and say consumers now fully expect businesses to help create sustainable solutions; and they want to see proof of it, that is, at volunteer events and on social media.

With cityCURRENT, we host Samaritan’s Feet Shoe Distributions in both Memphis and Nashville, which provide the perfect example of the importance of being an active, visible participant in charitable efforts. Hundreds of adult volunteers come out to these events to wash the feet of youth and provide them with new socks and shoes. These volunteers are business and community leaders, college students, athletes, active military personnel, and retired individuals; it’s a wonderful cross-section of our cities. At one of the events, a Human Resources Manager from a very large company headquartered in Memphis was commenting on how much he loved attending the events because they were filled with compassion and joy. He then added, “And I love seeing who else is out here serving with us because these are the types of people we want to hire and do business with.” What a powerful testimonial to the importance of being directly involved and being seen actively giving back to our community!

This type of open engagement in the community creates not just goodwill, it also holds significant financial implications. With increasing frequency, today’s consumers are deciding where to purchase goods and services based on social impact. Tom Shadyac, the Hollywood producer and director of such mega hits as Bruce Almighty, Ace Ventura: Pet Detective, Liar Liar, Nutty Professor, and Patch Adams says it simply comes down to “love.” He notes: “Wal-Mart will become All-Mart and Starbucks will become Ourbucks because if they aren’t giving back, another business will. And by the natural heartstring pull, we will choose to do business with the one focused on love. Every single one of us will shop at All-Mart or Ourbucks because it shares its resources with the community. It’s not going to create a super wealthy class; it’s going to create wealth by giving back to the community. All-Mart and Ourbucks are places we’ll shop because we’ll know our dollars are staying to educate kids. That doesn’t mean the CEO of All-Mart and Ourbucks aren’t going to do incredibly well. The CEOs will get everything they need to rock their lives. We want diversity in life and business, but the All-Mart and Ourbucks CEOs will go the grave with a 9.9 on the happiness scale because they shared their love.”

Sharing love and having a purpose that focuses on others is powerful! If you and your company are not helping others, then, at some point, another company—perhaps one of your competitors—WILL, and consumers will follow their hearts and choose to do business with the entity exhibiting a higher purpose, the one sharing and showing “love.”

My wife and I are examples of consumers who make purchasing decisions based on social impact. Before making a purchase, we search online to find places that have a focus on giving back and supporting charitable efforts. We purposefully buy certain products like shampoo, food, clothing, and accessories because that purchase will benefit a nonprofit. We’ll eat at certain restaurants on nights where a percentage of the meal’s cost or proceeds are donated, and we’ll intentionally select gifts that have a unique storyline and higher purpose.

In light of this trend, business leaders would be wise to take to heart a comment made by Brent Bushnell, a lifelong engineer and entrepreneur who is currently the CEO of Two Bit Circus, Inc. His dictum appeared in Evan Kirkpatrick’s Forbes column entitled “3 Key Elements of Capitalist Philanthropy.” What was Bushnell’s statement? “Companies without social impact culture will soon be obsolete.”

Even more food for thought is presented to us by this quote from Forbes publisher Rich Karlgaard’s recent book, The Soft Edge: “For the first time in history, impressions of openness, sincerity, and authenticity are more important to corporate reputation in the United States than the quality of products and services.” Karlgaard’s observation is connected to this chapter’s topic because it ascribes the human qualities of “openness, sincerity, and authenticity” to businesses. No longer impersonal entities narrowly focused on producing quality goods and services, companies have “evolved” and are now viewed as citizens within a community. Consequently, they will be held to similar expectations that we have for each other, as humans, as citizens, as neighbors. It is expedient, then, that companies welcome this new role in society and embrace the spirit of giving back.

Changing attitudes about business-community relations are not limited to consumers. Today’s jobseekers, especially those of the millennial generation, are now choosing where they want to work based on a company’s social engagement and impact. Part of their expectation is having the flexibility to use company time for their volunteer service rather than to sacrifice precious time for family and friends during the weekend or after work. If your business hasn’t yet encountered such a request, be forewarned. It’s coming!

We’ll explore tactics for corporations in a later chapter, but this expectation of flexibility from employees necessitates changes, especially if you hope to compete for top talent. As a result, businesses are now offering things like modified work schedules, where employees can volunteer in the morning and arrive at work later or they can leave work early and volunteer for the last hour of the workday. It also entails hosting things like food, clothing, and toy drives at the office, raising money with “Casual Days,” and scheduling a variety of nonprofit tours, action projects, and other activities that make a difference. To attract and retain the best talent, progressive business leaders understand that they must exemplify and encourage physical engagement and social impact. The good news is that studies show when companies offer these types of programs and opportunities, employee morale and productivity increase. That’s a tangible benefit for the business!

Looking at the traditional marketing mix model, you’ll always see the four Ps, representing Product, Price, Place, and Promotion. The model has been expanded to include People, Process, and Position, but the next extension will include “Purpose” because purpose is no longer just the icing on the cake. Purpose has become one of the fundamental ingredients for success. Consequently, the key to growth is in determining your purpose. Give your company, product, service, and even yourself a competitive edge by defining your purpose and then setting out to find ways you can breathe life into that purpose...