Just one year ago, in 2019, U.S. corporate philanthropy increased by 13.4% over 2018 to $21.09 billion. However, those donations represented a mere 5% of the nearly $450 billion in total U.S. giving.
Today, the world has changed and we are experiencing the triple whammy of the uncontrolled coronavirus, the long-overdue expansion of the racial justice movement and the deepest economic crisis of our lives. Now is the time when the help of the many businesses that are still profitable is urgently needed. Not only will enhanced corporate philanthropy support nonprofits in the communities in which their employees and customers live, multiple studies demonstrate that strategic community engagement enhances the bottom line.
With massive unemployment, business failures, political giving in this election year, the recent changes in income tax laws and more, the nonprofit sector is facing unprecedented losses. Over half of nonprofit fundraising professionals expect to see decreases in giving in both 2020 and 2021. Thousands of nonprofits – particularly mid-sized and smaller local ones that are dependent on individual donations – will be forced to reduce programs and services and, in many cases, close their doors for good.
Consumers want companies to get involved in important social issues
Research shows that 78% of U.S. consumers want companies to address important social justice issues. 87% will purchase a product because a company advocated for an issue they cared about and, conversely, 76% will refuse to purchase a company’s products or services if it supports an issue contrary to their beliefs.
Moreover, 75% of people are likely to start shopping at a company that supports an issue they agree with. And, fewer people (44%) say price is the main reason they support a company compared to evidence of environmentally friendly business practices (71%), social responsibility (68%) and giving back to the local community (68%).
The majority of consumers expect companies to take a stance on social issues. Almost 60% of the public wants companies to give an opinion specifically on racial equity, social justice and anti-discrimination; almost half want the same for the environment/climate change.
Younger employees want to work for community-engaged companies
Millennials, people ages 24 to 39 in 2020, comprise 35% of the global workforce and, by 2025, that number will rise to 75%. In one study, 83% of millennials claimed more loyalty to a company that helps them contribute to social and environmental issues, compared to 70% of the entire multi-generational U.S. workforce. A whopping 88% of millennials say their jobs are more fulfilling when they have the opportunity to work for these companies.
Many ways to help beyond making donations
In addition to the holy grail of making cash donations to local nonprofits, companies can increase financial support and opportunities for employee volunteerism; establish or increase a program to match employees’ donations to local charities; donate employees’ unique skills and services to the nonprofit sector; contribute products and services to nonprofits in need; shift production lines to meet pressing needs in health care or education; host internal charitable drives for food, clothing, books, etc.; expand support for mental health care for employees balancing the stress of the pandemic with family and work responsibilities; and, of course, increase pay and health care benefits.
To be effective in making philanthropic decisions, businesses should develop an articulated, coherent plan that will
- Engage all internal stakeholders
- Consider the views external stakeholders, including members of the communities you wish to serve
- Identify the reasons for giving
- Use the United Nation’s SDG’s (Sustainable Development Goals) as a roadmap
- Align all of the company’s resources
- Develop an authentic communication plan
- Design and execute a strategy for impact
No matter the size of the company, the community or the contribution, businesses increasingly understand that a reputation as a good corporate citizen helps them recruit, engage and retain employees; create better relationships with vendors and regulators; satisfy investors’ objectives; and deepen ties with customers, all while making a difference in the world. These efforts increase the likelihood of improving businesses’ triple bottom line – taking care of people, protecting the planet and enhancing profits.
This post originally appeared in the Denver Post on 8/9/2020. It is reposted here by the author with permission.