Charitable donations by corporations
grew by a record 22.5 percent in 2005
(the last year for which figures are available), according to the Giving USA
Foundation, which also found that 59.5
percent of corporations increased their
contributions. Even after the large increases, corporations still make only 5.3 percent
of all charitable contributions in the U.S.,
compared to 76.5 percent for individuals,
with foundations (11.5 percent) and
bequests (6.7 percent) accounting for the
rest. Hurricane Katrina and other natural
disasters motivated much of the increase
in corporate donations. But it doesn’t take
tough times to create good opportunities
for corporate philanthropy.
“There is a direct return on investment on
corporate philanthropy,” says Dan Mahurin,
chairman, president and CEO of SunTrust
Bank Tampa Bay. “Your business benefits
by investing in your community to make it
a better place to live, work, play and grow.”
Smart Business asked Mahurin how philanthropy provides ongoing opportunities
for businesses to help themselves in a variety of other ways and how companies can
manage successful programs.
What does corporate philanthropy mean to
business development?
With proper planning and forethought,
philanthropy can have a direct impact on
how you grow your business. It leads to
improved standing in your community,
improved stature with people you’d like to
hire, and it provides many networking
opportunities.
Do you have any tips for targeting and narrowing opportunities?
We recommend investing in interests
related to your company, your employees,
customers or others that you want to influence. Business is all about relationships.
When you find common interests with
employees and customers, it gives you a
chance to build relationships. Philanthropy
may start with an employee volunteering
for an organization, which could evolve
into the employee gaining corporate sponsorship, and a long-term relationship
between the employee’s company and the
organization they volunteered for.
You have two primary choices: direct
donations or corporate sponsorships.
Often you can manage your sponsorship,
which means you have more control over
your involvement and investment. These
sponsorships also provide many opportunities for relationship-building but require
your time and involvement.
In these tough times, what is a priority?
First, really get to know the organization
you’re dealing with, understand exactly
what they do and make sure it aligns with
your company’s values and philanthropy
goals. It’s also important to look for organizations that give a good return on what
they’re providing. Expense ratios are an
important indicator. The United Way, for
example, gives back 87 percent of what it
collects, which is very good.
What are the pitfalls of a company philanthropy program?
The biggest is not planning the program
and setting goals for what you want it to
accomplish. Planning is more than setting a budget and then responding to requests
as they come in. It’s much better to play
offense than defense, meaning go after
what you want to do versus responding to
what others want you to do. Corporate philanthropy should have a guiding philosophy and should be managed according to
the philosophy.
Another big mistake companies can
make is not getting involved. They may
think they don’t have the time or budget to
make a difference, but that is a mistake.
They can make a difference. And don’t forget what a little bit of money can do with a
lot of involvement from your employees.
A third common mistake is not doing
enough work on the front end to learn
about the organizations you’re getting
involved with.
How will a business owner know that this
effort is paying off?
Deep in your heart, you know philanthropy is worthwhile because it’s the right thing
to do.
Sometimes there is a direct correlation.
I’ve seen examples where new business
could be traced back to sponsorships, at a
ratio of about $4 in business for every $1
spent on sponsorship.
The impact of philanthropy is usually not
so clear. You may see it when clients say
‘thank you’ for supporting something that’s
important to them. You may see it when
prospective employees want to work for
your company, because it is known for
being a good corporate citizen. You may
see it with your existing employees, who
feel good about coming to work for a company that helps their community.
Frankly, sometimes it can take a long
time for philanthropy to pay off. If the community grows because of your support of
it, the pie is bigger and you’ll get a bigger
slice of it. You build your business by building your community.
DAN MAHURIN is chairman, president and CEO of SunTrust
Bank Tampa Bay. A 30-year SunTrust veteran, he recently started
the SunTrust Forum, which makes expert financial advice and
insight available free to the community. Reach him at (813) 224-2021.
