When it comes to supporting charitable causes, businesspeople have a history of being generous. According to Charity Navigator, a New Jersey-based nonprofit organization that tracks individual and corporate charitable giving in the U.S., corporate contributions to charities totaled $12 billion in 2004.
Helping national causes is sure to capture media attention, but many companies look closer to home for worthy nonprofits. And, increasingly, their charitable works involve more than just opening their checkbooks.
“In the past, community involvement might have meant paying for the shirts for a local T-ball team,” says Rick Hull, president for Sky Bank’s Western Region. “Now companies are getting away from the mindset of simply writing a check to a charity. There’s an effort to fill real and tangible needs within the community.”
Smart Business spoke with Hull to learn how companies can use community relations policies and programs to transform their communities and reap business benefits along the way.
How can effective community relations programs be established?
You start by identifying community improvement projects sponsored by institutions such as the Salvation Army, the United Way and others. Also, ask organizations such as Habitat for Humanity, local food pantries and domestic violence prevention initiatives if you can be of assistance. Finally, you can also ask employees what local causes they are passionate about, and you can network within the community.
Funds should be set aside to support worthy projects, and employees should be assigned to work with organizations sponsoring the projects.
How do you choose projects?
You can form a committee of staff members to investigate possible community improvement projects and to recommend others on a case-by-case basis. You should evaluate each project on the basis of its longevity, its legitimacy, the legitimacy of its leadership and whether it is fulfilling its mission in the community.
Also, the process should consider the project’s benefits to both the community and to the company.
How are community relations commitments carried out?
Employees volunteer to serve on boards of organizations or devote voluntary time — for example, to pack holiday food baskets or perform some other service. Companies can track employee involvement in community projects and present awards and incentives for outstanding community service.
How often should a company re-evaluate its community relations program?
It’s a good idea to do so twice a year. Reviewing projects is necessary to ensure the community projects are still viable, and that the need for them continues to exist. Over time, support for some projects may no longer be needed. For example, an organization may become stable enough to sustain itself; construction of a house built through a nonprofit organization may be completed; or a local major hospital expansion may be finished.
Projects should be reviewed to examine what the company has spent on each, and what the business and the community have each reaped from the investment.
Re-evaluation is also a way to introduce new projects can take the place of beneficiaries that have reached their goals.
How do businesses benefit from community relations initiatives?
When most companies reach a certain size, the only thing that differentiates them from their competition is their relationship with customers and community. So investing in community relations becomes a part of branding. The return on the investment is generally better than returns from other promotional spending options.
There are also other organizational benefits.
- A shared philanthropic philosophy encourages low employee turnover. Employees view themselves not only as part of a business, but also as a concerned member of the larger community.
- A reputation for community involvement tends to draw potential employees with the same community-conscious mindset to fill positions where turnover does exist.
- Customers and potential customers recognize the company’s community improvement efforts. Customers who view a company as an active member of the community are generally likely to support it with their business.
Does community involvement require a long-term commitment?
Yes. Eventually, the tendency toward community involvement becomes part of the corporate fabric. Both employees and customers identify the company with good service and good citizenship.
It’s not pie-in-the-sky. Businesses are still commercial operations, not philanthropic ones. But they have an obligation to the community as well as to their shareholders, employees and customers.
Having happy employees, satisfied customers and solid involvement in the community is good for business.
RICK HULL is president of Sky Bank’s Western Region. Reach him at (330) 258-4434 or [email protected].
