Managerial Volunteers
Case for Philanthrophy
Strategic Planning

Sandra Larson Consulting

Managerial Volunteers—A Radical Resource for Change
The Business Case for Corporate Philanthropy
Strategic Planning Takes Planning
The Decision-making Board
Constructing Decision Styles
What to do While Waiting for Your Board to Raise Money
Unique Nature and Struggles of Traditional Small Nonprofits
Rounding Up Board Policies

The Business Case for Corporate Philanthropy

According to the Minnesota Council on Foundations, corporate contributions in the state grew more than 90% between 1987 and 1996 to more than 193 million. In 1996, the MN Keystone Program recognized 252 companies in the state for contributing between 2 & 5 % of their pre-tax earnings for charitable purposes, up from 184 in 1994.

Become Corporate Citizens

The concept of becoming a “corporate citizen”, i.e., playing a leadership role in social problem solving by funding long-term initiatives is growing more powerful in the 1990s. This entails cultivating a broad view of the business’ own self-interest while instinctively searching for ways to align self-interest with the larger good. This is a paradigm on the rise in corporate America.
Already powerful in the U.S., “corporate citizenship” promises to bring even more success to U.S. companies international, especially in countries which are still uncluttered by social initiatives. Here even small well-conceived grant programs can have a large impact.

IBM’s philanthropic efforts in Japan have given it, according to a recent poll of Japanese citizens, a reputation second only to Sony in respect due to its reputation for social responsibility. Its leaders have access to the inner sanctums of Japanese business enjoyed by few U.S. executives. (Harvard Business Review of May-June, 1994)

The success of Hewlett Packard and other such companies belies the notion that businesses that are socially responsible can’t also be fiscally responsible. In fact, the opposite is true. A business can’t do much good if it isn’t any good at what it does.

It’s no coincidence that these same companies have been able to embrace the leading management trends of the past decade: flat organizations; bottom-up management; empowerment; customer-focused, just-in-time manufacturing, and total quality. These philosophies demand a flexible and dedicated work force not locked in battle with management.

As a CEO put it, “This is not do-good stuff. This is the way you make money.”

According to Tom Kochan, a professor of management at M.I.T.’s Sloan School, “if firms do these kinds of things (socially responsible measures), they will get an economic return for their investment and a higher quality work force that is more loyal and productive. It is a virtuous cycle.

Businesses have another constituency, of course, one that, given the choice, generally prefers cash to virtue. Happily, in the world of business it is becoming increasingly possible, if not necessary to get both.” (Harvard Business Review, 1994)

Rationale of companies such as The St. Paul Companies: “We view it as a long-term strategy for supporting a group of organizations that collectively have an important long-term impact on the community.”

Increase Name Recognition & Reputation

AT&T is among a number of blue-chip companies, including General Motors, Eastman Kodak, and Coca-Cola, that rely on the prestige value of their products and have taken on larger philanthropy expenditures than their lean, mean, and lower-priced competitors. Within each of these companies, internal advocates successfully argued again drastic cuts in philanthropy on the grounds that competing on price and corporate citizenship is a smarter strategy than competing on price alone.

“It wasn’t until the Exxon Valdez oil spill in 1989 that the shortcomings of the style of philanthropy (which doesn’t tie giving to business interests) were fully exposed. Without ties to environmental leaders nurtured by the foundation, then Exxon Chairman Lawrence G. Rawl had nowhere to turn for advice on handling the crisis. In the end, strategic alliances can prevent public controversies that might irreparable damage a company’s reputation and its business. Philanthropic initiatives should help advance business interests through strategic alliances with marketing, governmental affairs, research and development, and human resources functions . And by putting corporate resources and know how into problem solving, the community also benefits.

More than anything, the government affairs staff at A T & T wanted AT &T to be a leader in public policy discussions regarding the “information superhighway”. By having CEO Allen work on the well-being of children with Clinton-Gore administration, he was invited by them to be at the table regarding the decision to make the superhighway a private rather than public initiative.

The Council of Foundations reported that 60% of the CEO’s they surveyed said that contributions to charity helped to attract good people to the community and company. Approximately 98% of the larger firms cited this as one of their rationales for giving.

Galaskiewicz also found that companies which gave more to charity were regarded by business leaders as more successful business enterprises (New York Law School Review 1997)

The Toro Company: “We view philanthropy as a way to build relationships with customers more than to sell products. It goes beyond your products. Corporate giving can enhance the best part of your family name.”
ReliaStar uses its corporate philanthropy to help raise awareness of its educational brand. “We use our community tools to enhance our name recognition and brand awareness efforts so that when people think of ReliaStar they think of the financial education company.”

Today cause marketing, which includes promotions in which a portion of the purchase price is donated to nonprofits, is the fastest growing type of marketing.

The most obvious case was American Express Corporation’s partnership with the Statue of Liberty. Card usage increased 28% over the previous year, the number of new cards issued rose 45%, and the Statue of Liberty restoration fund received $1.7 million from American Express. Other research has shown that cause related marketing increases public awareness of the cause, expands the nonprofits base of support, and generates a more positive image of the nonprofit and company among the public. (New York Law Review)

Many companies also view cause-related marketing and other marketing-related philanthropic initiatives as valid and effective ways to let people know about their good works. A recent survey of 1,500 households, conducted by Boston College’s Center for Corporate Community Relations, showed that more than 75 percent of respondents felt that a company’s philanthropic activities made a difference to them when deciding whether or not to do business with the company. (MN Council of Foundations Giving Forum
In an increasingly tough business environment, philanthropy is a way for a company to distinguish itself from the competition.

Improve Human Resource strategies

Aid Recruitment

By donating equipment and providing scholarships to the academic programs where they recruit, companies add value to their efforts to entice new employees.

Increase loyalty

In a study commissioned by Chivas Regal, 53% of employees say their loyalty to their employers is strengthened when they are involved in the companies’ philanthropic programs. (New York Law Review & other sources.)

Improve employee benefits

By using philanthropy to create new day care and elder care options in plant communities, companies ease the dependant care burdens of employees.
AT&T by supporting child care in their neighborhoods has increased available child care for their employees.

Improve Employee Performance

What’s more, people who volunteer make better employees, according to a recent survey of Pillsbury employee volunteers.

*91% of employee volunteers report that volunteering enables them to develop managerial, teamwork, problem-solving and strategic management skills

*89% of supervisors say that employee volunteers engage in positive work behaviors more frequently than do non-volunteer employees.

*Employees who volunteer are more satisfied with their work, identifying more with the company, and have more confidence in management than do employees who do not volunteer. (Giving Forum MN Council of Foundation, 1998)

Contact Information
Sandra Larson Consulting |
11472 Fairfield Rd. West, Suite 302
Minnetonka, MN 55305
952-595-0432 | 612-964-4389 (Mobile)


Managerial Volunteers
Case for Philanthrophy
Strategic Planning










© 2006 Sandra Larson Consulting