Corporate Giving when times are tough

As the conscience of western society has become more empathetic to the social struggles it witnesses, corporate philanthropy has shifted from a place of obscurity to being entrenched in many organizations as a worthwhile endeavour, one that is good for employees, good for business and good for the community. Once an ad-hoc and sometimes poorly planned activity, corporate giving has been embraced as a strategic business function and now adheres to guidelines, scrutiny and relishes its own place on company balance sheets.

Consequently, charities and non-profits alike have been flourishing in a way never seen before. The most recent statistics from Imagine Canada state that Canadian organizations gave over $1 billion in 2003. Moreover, 71 per cent of organizations either support or accommodate employee volunteering. The good news is that this generosity is expected to continue in the long term. However, reports suggest that this most recent economic slowdown will persist well into 2010 and is already having an impact on organizations’ ability to give. Our own sector has felt the pinch as companies reduce their capital expenditure for themed exhibit projects. The need for compelling story telling has been overshadowed by the urgent desire for many companies to gain tighter control of their finances and reduce “unnecessary” expenditure. In turn, this has many in our industry reconsidering their corporate giving activities– and we are not alone. Sadly, charities across North America and Canada have recorded fewer total donations in 2008 compared to 2007. As a case in point, one of Vancouver largest charities, the BC Children’s Hospital Foundation (BCCHF), collected 50% less in donations in 2008 than the previous year, reaching only half of the $90 million target. At a BiV Colour Series breakfast regarding corporate philanthropy last December Sue Carruthers, CEO of BCCHF, said that the downturn has hurt the BCCHF and required them to take alternative strategies to fundraising in 2008-09 and recalibrate their fundraising targets.

In the tough economic times it can seem that the most prudent approach is to reduce your corporate giving and hope for a better outlook next year. After all, giving something away for free does seem counter intuitive to good business practice. However, research by Imagine Canada indicates that many organizations view corporate giving as a value-add that strengthens brand image and reputation. According to a 1999 Cone/Roper Cause Trends Report corporate giving can strengthen a brand in many ways:

• Improve customer loyalty
• Enhance reputation and standing in the community
• Increase positive name recognition and brand awareness
• Enhance relationships with key community leaders and officials
• Develop beneficial business-to-business relationships with nonprofits.
• Create a reservoir of goodwill within the community

Importantly, all these benefits can translate to a healthier bottom line. The report also stated that 76% of consumers would switch brands or retailers to one associated with a good cause, when price and quality are equal.

So what strategies can be employed by organizations with restricted cash flow to support causes they believe in? The answer lies with employees. “It’s about what the employee is passionate about,” says Jill Schnarr, Director of Community Relations at TELUS. At the heart of it, organizations should look to their employees as the drivers of corporate giving and work with them to help them support the causes they are most passionate about. Often this is not about writing a cheque, but donating time, resources, expertise, providing time-off and making the working environment more flexible to allow employees to fit their charity work into their work-week. If your organization still wishes to donate a large monetary amount to a charity it should be thoughtful and consider how it may impact the brand and the organization. “For larger corporate gifts they need to align with the company’s corporate goals,” says Jill.