November 19, 2008
Companies Expected to Tie Giving More Closely to Business Goals
By Marty Van Der Werf
San Francisco
Corporate grant makers are going to increasingly focus their giving on programs closely related to their businesses, said several experts at a conference here on corporate citizenship.
“We see corporations more and more want to align their philanthropy with their business model, with their core competencies,” said Charles H. Moore, executive director of the Committee Encouraging Corporate Philanthropy. “Companies want to be part of a solution.”
He said corporate philanthropies are giving more multi-year grants, and focusing giving on causes where the company has specific expertise. He said companies also are increasingly encouraging their employees to volunteer for activities where they can bring specific skills to solving entrenched problems.
Mr. Moore, whose organization includes more than 175 corporate chief executives and chairmen, also predicted that corporate giving would increase in 2008 despite the economic downturn.
However, another speaker said that is highly unlikely.
“Companies that have eliminated jobs and cut dividends will find it hard to justify to shareholders and employees that they are increasing philanthropic giving,” said Andrew D. Plepler, president of the Bank of America Charitable Foundation.
He agreed with Mr. Moore that corporate foundations, like the one he heads, are becoming more focused on giving that could potentially help the bottom line. Mr. Plepler said that Bank of America’s long history of supporting community groups in struggling areas and supporting low-income tax credits helped give it the credibility to absorb Countrywide Financial Corporation, a lender that had been at the epicenter of the sub-prime lending crisis which has precipitated steep declines in the stock market.
“The holistic story” of Bank of America’s involvement in the community is “what carried the day” at Federal Reserve Board hearings about the bank’s acquisition of Countryside, said Mr. Plepler.
Paul Brest, president of the William and Flora Hewlett Foundation, agreed that it is wise for companies to encourage employees to volunteer in ways that use their professional skills. “To the extent that you align volunteerism with activities your employees are actually good at, that adds tremendous value,” he said.
The conference, “Corporate Citizenship: Building a Sustainable Business,” is being held by The Economist magazine. The Chronicle of Philanthropy is a supporting organization of the conference. The event, which attracted about 150 guests, concludes today.
Doing Good and the Bottom Line
Much of the talk at the event has centered on the idea that doing good work in the neighborhoods they serve and the environment is good for a company’s bottom line.
Ray C. Anderson, founder and chairman of Interface Inc., a Georgia carpet manufacturer, has become a leading acolyte for environmentally safe production since a revelation he had in 1994 that “I was a plunderer,” he said. The company has a goal of eliminating “any negative impact Interface has on the environment by 2020.”
“Certainly there is more to business than to make a profit,” said Mr. Anderson, author of the recent book, Mid-Course Correction, Toward a Sustainable Enterprise: The Interface Model. “I can’t imagine a businessman who plans to stand before his Maker and talk about shareholder value.”
Marty Van Der Werf is director of Chronicle Information Services, a unit of The Chronicle of Higher Education and The Chronicle of Philanthropy.
Comments
Commenting is closed for this article.
Previous: As Endowment Values Plummet, Some Institutions Consider Suing Over Investment Advice
Next: Focus on the Family Eliminates 202 Jobs
Companies seeking to leverage their impact in strengthening communities are encouraging and supporting the involvement of their executives on nonprofit boards of directors – globally, nationally, and regionally. However, the key for this to be effective is for executives to be matched thoughtfully and purposefully to boards where there is a mutual interest based on a careful needs assessment. See “Bespoke Boards: Find the Nonprofit That Fits” in Directors & Boards, Winter 2007 and also http://www.fastcompany.com/blog/alice-korngold/leading-companies-good-0
— Alice Korngold Nov 19, 09:38 PM #
FYI. This is an interesting article.
— Terri Morton Nov 20, 01:17 PM #
Leaders of nonprofits and fund raising programs need to make sure that the benefits of service and giving are clear to corporate supporters and volunteers. Demonstrated organizational impact combined with an articulate message on how corporate involvement is mutually beneficial, is essential for nonprofits today. It is not enough to have a good mission and be well managed, though these continue to be critical responsibilities of nonprofit leaders and boards. Ensuring that the organization strives for efficient and effective results is required as well. Effectively managed corporations and their executive teams will be more willing to align with organizations that not only enhance their business plan, but are respected stewards in the community. A focus on good business practices and accountability creates a strong community partnership opportunity for both the corporation and nonprofit.
— Jeannette Archer-Simons, CFRE, Consultant Nov 20, 02:50 PM #