Philanthropy is the right thing to do. There’s no question about it, says Chad Hoffman, president and CEO of Richwood Bank. Not only does it build stronger communities where we live, work and play, it can also benefit your business.
“People in today’s society, especially millennials, like to get behind causes. If you support organizations that they follow or are passionate about, you have a better connection with that group of customers or potential customers,” Hoffman says. “There is a business benefit — people like to work with people who connect to the things they believe in.”
For example, Richwood Bank created three coffee shops to help people see the bank as a destination, a place for interaction. Customers (and noncustomers) come to the lobby and donate to one or more of the bank’s 20 community nonprofit partners. In return, they receive a gift card for “thank you” drinks based on their donation-giving tier level.
Smart Business spoke with Hoffman about the intersection of philanthropy and business.
How does philanthropy benefit businesses?
You can use philanthropy as a sales tool to create a connection, because there are so many choices. Customers often don’t buy a product for being a product; they buy from the person or business. It can be as simple as providing a service, pro bono, to a charity and then letting potential customers know so they’re more apt to shop with you.
Philanthropy can be used for recruiting. If an employee is passionate about an organization or serves on a nonprofit board, then your company could support it, too. Job candidates see you supporting the causes of your employees and know if they become a team member, you’ll do the same for them. Nonprofits also will acknowledge you, which can boost employee morale. It helps validate that they’re in the right company.
Philanthropy is an expense on your books, even though it’s tax deductible, but you can consider it marketing, too.
What are some options for a charitable giving strategy?
You’ve got to know your purpose, like it says in Simon Sinek’s book “Start with Why.” Why are you in business? What are you trying to accomplish? You want to tie your philanthropy to that mission and vision. Once you know what your company is passionate about, you can start building relationships with organizations that support or believe the same things that you do.
One of the best things you can do is help a nonprofit create relationships. If you give money, that’s good for this year. You can volunteer and that’s good for today. But if you bring that charity five people who are interested, who may give or volunteer in the future, you’re helping build a network. Also, you’ll get the largest impact by aligning the values of everyone involved, so the charity and your business work hand-in-hand. For example, let your employees pay to dress down and then put that money toward a charity with your values or that relates to what your business does.
How should business owners communicate? How do they make it informative without sounding like they’re bragging?
Make a list of the organizations that you support financially or as a board member to try to attract customers and staff, but you don’t have to share the details. Otherwise, you risk people thinking: No wonder my prices are so high; if you’re giving that much money away. Some causes are political or divisive, so avoid publicizing those. Also, don’t stretch it past what you’re actually doing or try to make it sound bigger than it is. It could come back to haunt you.
Internally, discuss your philanthropy on an ongoing basis to keep your employees engaged. Also, list your efforts on your website. You could proactively promote it to the community on an annual basis, letting people know what nonprofits you supported for the year, while making sure that it was true and significant support.
How can companies set up a charitable foundation, trust, scholarship, etc.?
Community foundations can help you set something up, handling the technical aspects. Organizations like The Columbus Foundation, Union County Foundation or Delaware County Foundation hold it for you, so you can direct the funds. They make it as easy as possible to support a good cause and benefit your business at the same time.
Insights Banking & Finance is brought to you by Richwood Bank