In the early years of the decade the economy was booming and people were generous in their charitable giving. Companies also started showing that they could be good citizens and give back to the communities that helped them thrive by starting a corporate philanthropy program. The programs took the form of foundations, giving programs and employee volunteer programs.
In addition to making executives feel good, it was good business.
76% of consumers indicate they would switch brands or retailers to one associated with a good cause, when price and quality are equal; and
87% of employees at companies with philanthropic programs feel a stronger sense of loyalty to their employer.
What companies did not realize was that along with such programs came the competing interests of their stakeholders. Suddenly, executives that funded the programs (directly or indirectly) wanted a say in how funds were distributed, employees wanted to know if programs sponsored by executives got preferential treatment and customers started asking how to request funds for their favorite charities.
When faced with this situation recently a corporate foundation client of mine decided to change the nature of its program. Ten years ago company executives founded a foundation and supported it through payroll deduction. As revenue increased so did gifts to the foundation. The foundation grew quickly, but so did the number of requests for funds from community organizations, employees and clients. The result, more grants denied than approved. With each turn down came the inevitable question: Why? It is touchy to explain to a good client that his favorite charity did not live up to the administrative to program expense ratio formula that the foundation required.
The solution: No longer accept grant requests. Sounds like overkill, but the internal result has been profound. Instead of accepting outside requests, the company now has a completely bottom up employee volunteer program (executives still count as employees). The program encourages and rewards employees through supporting gifts and matching funds from the foundation. Within weeks of adopting the change there were 4 “projects” in the works.
For this financial services firm: The first project--- “JA in a Day”. For the upcoming event, twenty-five employees have signed up to teach for a day at a local elementary school. Other projects with pending requests include a team of 30 signed up for a walk supporting a local cancer support group and a group of 20 outfitted in jeans and hammers for the day.