Doug’s Leadership Book Review
Volunteer work, cash donations, and in-kind donations have always been part of the Portland Internetworks culture. But, as we came around to making a targeted, strategic effort to make a measurable difference for a local not-for-profit services provider and the resulting impact on its community, I searched for guidance as to how other companies have made similar shifts in their “giving back” strategies.
Smart Giving is Good Business, while written for an audience of companies much larger than Portland Internetworks, helped me understand how we could identify goals we wanted to achieve, a profile of the organizations we wanted to support, and the resources which we could afford to sustainably extend.
The author, Curt Weeden, consulted and worked for several Fortune 500 companies such as Johnson & Johnson, General Motors, Merck, Xerox and Bank of America to build and improve the corporate philanthropy programs to benefit charitable organizations (and society) while also providing tangible business value.
Weeden tackles common and impactful questions such as: • Is it the role of business to support charitable efforts, or should business be merely focused on profitability and leave the decision to support society on the shoulders of the shareholders?
- What is the amount that a company should give?
- Should companies give products, services, cash or all of the above?
- How should businesses select which nonprofits get funded based on what criteria?
- Where do solicitations for special events (e.g. golf outings, gala auctions, special dinners) fit into a company’s giving strategy?
- How should a company prepare for and give in response to natural or manmade disasters?
- Should a company fund the United Way, American Red Cross, or similar umbrella or quasigovernmental organizations?
- How should a company communicate its contributions while avoiding “bragging” or negative reaction?
- When profits are negatively impacted by economic or business events, what should be the impact on a company’s philanthropy?
I hope that you’ll consider reading this book, and I’m happy to send a copy to the first 20 people who request it. But, I’ll also share a few nuggets that I think were key takeaways.
1) Weeden prescribes a minimum “ante” or “table stakes” that companies should give no less than 1% of pre-taxable income in cash to charities. Donations of products or services, contributions related to special events, employee donation matching, and worksite giving campaigns (such as United Way) all should be in addition to, not part of the 1%. And, 1% is simply a minimum (for example, Target gives 5%). Weeden also points out that smaller companies (what I consider SMB) statistically give a much higher percent of pre-tax income to charities.
2) A 2006 study by accounting professors at New York University and University of Texas concluded that charitable contributions by U.S. companies actually enhanced future revenue growth.
3) If all US Corporations gave at least 1 percent of pre-tax income to charity, it would mean an increase of $7 billion to $8 billion in funding to the non-profit community.
There’s plenty more in this book to help convince business leaders to consider organizing a philanthropical effort to benefit society and their own business successes. I look forward to sending out several free copies and talking about what your own takeaways are!