Benefits of corporate giving: building blocks to better business.

• Author: Teo, Flora
• Position: CORPORATE CITIZENSHIP

When presenting to potential donors, perhaps the most important question an executive director of a nonprofit organization must be able to answer is, "What's in it for my company?" Corporate philanthropy is often guided by the company's desire to satisfy the demands of any number of groups--stockholders, managers, employees, customers, etc.--while still doing good in the world. Businesses must identify how a cause will help the mission of the company and its public relations. This makes corporate philanthropy much more interesting and challenging process than merely writing out a $1,000 check to every nonprofit in town who submits a request.

While giving money to worthy causes is noble, nonprofits must be able to illustrate to corporate leadership all of the myriad ways in which businesses can also reap benefits from community giving. While it is obvious that the nonprofits and their recipients benefit, corporate philanthropy can go a long way for companies too: creating populations of future customers, attracting top talent for your workforce, and improving the company's bottom line.

Creating Populations of Future Customers

When consumers do hear about a company's cause commitments, research shows that this knowledge helps them make critical decisions. For example, according to the 2004 Cone Cause Evolution Study, 87 percent of Americans consider a company's commitment to social issues when deciding what to buy or where to shop. Consumers tend to spend their dollars with the company who they feel supports the causes they hold most dear.

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The goal of most sales people is to keep their customers happy, as it is more expensive to attract new customers than it is to retain a current customer base. However, the 2007 Cone Redefining Cause Study shows 87 percent of Americans are likely to switch from one brand to another brand that is about the same price and quality if the other brand is associated with a good cause. While it is paramount to preserve current customer relationships, strategic giving can create an edge over competitors.

Attracting Top Talent

Companies who wish to attract top-level employees...