Companies that give back through philanthropy and volunteerism strengthen the communities in which their employees and partners live and work.
But for growing companies, fitting community giving into their go-to-market plan means ensuring resources are being allocated to the right organizations, and for the right reasons.
Smart Business spoke with Jon Park, chairman and CEO of Westfield Bank, about community giving strategies for growing companies.
How does a company determine where it should devote its philanthropic efforts?
Companies should first look to align their giving with their areas of focus, taking into account their resources and capabilities.
Aim to address three or four general areas of focus. Develop criteria for support to determine who to support and why their mission fits with the mission of the company.
Companies that are already supporting organizations and causes in their communities should take an inventory of their giving and discuss the efforts internally. Look closely at where money and time are being allocated and whether the organization — employees, management and leadership — all still feel that the causes being supported still align with the company’s values and interests. This will help the company decide how it will move forward with its giving and volunteerism.
How should companies track their giving?
It’s important for companies to track the dollars they spend on community outreach. The bigger the gift, the more the company should dial in on the efficacy and performance of the organizations receiving the money — smaller, one-time donations likely don’t need to be tracked, or at least not as closely.
Larger gifts should come with definitions of the scope of use for the donation, as well as metrics the organization will use to measure as it allocates those funds. Assign an employee to stay engaged with the organization and monitor its performance. It’s not always exact, but it makes clear that there are expectations for results and should raise the bar of performance.
As part of its measurements, companies should look at how much of what they give to an organization goes to programming and how much goes to its administration. Companies need to make their own determinations regarding their comfort level with the percentage that goes to each.
How should companies measure the return on their philanthropic investments?
It’s difficult to measure a direct return on donations. There are, however, compelling intangibles that can be tracked, such as how well the connection between the company and organization is promoting and reinforcing the company’s brand and image with customers and prospects.
When it’s determined that the company’s donations have been effective, consider giving more. Those organizations that underperform expectations should receive less.
How can companies ensure that giving and growth coexist?
Set a percentage of income that the company is willing to give. Allocate the money as part of the budgeting process and set it aside.
At the same time, urge employees to volunteer and actively support civic and social organizations. Encourage them to not just participate, but to take leadership roles within those organizations.
Consider granting employees paid time off for community volunteer efforts. That has the twofold effect of boosting the company’s engagement with community organizations while also increasing employee morale. It’s especially important in growing companies where employees are often working hard and might not have the free time to participate in a meaningful way. Giving employees time off for volunteerism also sends a strong signal of the company’s commitment to community involvement.
How should companies talk about their philanthropy?
Companies should share their efforts through social media, taking pictures and posting them as they work in the communities. It builds awareness in the community of a company’s values while also promoting a culture of giving, which can attract employees.
Insights Banking & Finance is brought to you by Westfield Bank.