Charitable giving isn’t easy

Written by Chris Daniels

Keith Seel has seen it happen all too often. The Calgary-based consultant, a specialist in helping companies manage their charitable activities, says well-meaning firms set out to do some good, only to stumble into quicksand. It’s easy enough to get stuck in the muck: as soon as you put out the word to the charitable community that your firm is interested in giving — or as soon as the word gets out that you’ve given to one charity — you’re buried in proposals. “You can try to spend 15 minutes with each reading through 500 proposals from non-profit organizations,” he says. “But it’s not going to happen. It would literally take you months.”

You can sink even deeper. Over-whelmed by all the proposals, you hastily pick a few, seemingly respectable charities to donate to. You figure philanthropy will have a positive impact on your business, perhaps helping with staff recruitment or raising your company’s profile. Yet what seems like a sincere effort to help others, and in turn your business, can look insincere and opportunistic.

Not that Seel, director of the Institute for Nonprofit Studies at Mount Royal College in Calgary and a consultant in the trickier-than-it-seems world of corporate giving, thinks it’s a bad idea to give back. Aside from assisting important causes, well-managed giving can benefit your business in several ways, such as boosting employee loyalty and generating customer goodwill. Seel says charitable giving is “not a trap for organizations that know what they’re doing. In fact, it’s quite a powerful partnership.”

But to achieve those benefits, you need a solid donations strategy that will help you avoid choosing the wrong partner or promoting the partnership too opportunistically. How do you get it right? Naturally, you’ll want to learn more about your potential beneficiaries, including — gulp — Canada’s 80,000 registered charities. Seel advises letting your employees tell you what’s important to them, so you can pick a few causes they’ll take pride in supporting. A short survey on community issues is an effective tool for collecting opinions.

“I’ve never seen response rates from those surveys of less than 60%,” says Seel. Then, he recommends, contact community organizations that can help match you with appropriate charities. That’s what premium bread-maker Ace Bakery did. For a modest fee, the Toronto Community Foundation researched organizations that would fit Ace’s charitable objectives. Ace, which employs 125, wanted to give 10% of its pre-tax profits to food and nutrition programs that assist low-income families, as well as financing culinary education and supporting organic farming initiatives.

“The foundation did all the research and came back with written suggestions and useful information on the charities, including why we would be interested in them and how they fit our mandate, right down to the exact amount we should give,” says Linda Haynes, co-owner of Toronto-based Ace. “It would have been absolutely impossible for a small company like ours to do that research.”

Sheila Corriveau, president and CEO of Porter Novelli Canada, a Toronto-based PR agency with a division that helps companies leverage their charitable involvement, says too many firms make assumptions about what the charitable partner can do for them. “Assume nothing,” she advises. “Find out exactly what each other’s corporate vision and values are, and how the two of you can integrate together.” Also, she suggests, make sure you and the charity agree on how you can promote the partnership, such as using its logo on your marketing collateral.

But be careful not to take too much credit, even if you’re being enormously generous. Corriveau says firms can sometimes look like they’re taking advantage of a worthy cause, or inadvertently position themselves as more important than the charity itself. “That can damage the credibility of your brand,” especially if you haven’t made a relevant connection between it and the charity. “If it doesn’t tie in to your overall business objectives, it could appear opportunistic. “You always have to ask, ‘Does this make sense for the objectives of my company?'”

Asking that question helped steer Salt Spring Coffee Co. in the right direction. While it does make cash donations, much of the Salt Spring Island, B.C.-based firm’s support to charities is in the form of its organic coffee. Salt Spring donates coffee to 25 to 40 organizations a year, from local sports teams to AIDS societies, which sell it to raise funds. “Consumers get to sample the product, and we also get exposure from signage at the events,” says Mickey McLeod, president of the 38-person company. And, because Salt Spring’s involvement is appropriate to the charities — many donors, after all, are coffee drinkers — it’s not seen as muscling in where it doesn’t belong.

Mediagrif Interactive Technologies in Longueuil, Que. has a politically savvy solution to winning recognition: its employees and business partners decide how to direct the donations. Mediagrif donates to a huge spectrum of charities. About 30 of them share an annual pool of $70,000 to $100,000, which equals 1% of Mediagrif’s after-tax profits. Each year, it changes the list of recipients.

If one of Mediagrif’s business partners comes knocking, the operator of e-business marketplaces has the flexibility to donate to causes dear to that partner’s heart because it’s not locked into only a few specific charities. “It makes the relationship with our partners more than just a simple business arrangement. If you can get into a more personal relationship with your partners, it helps in the long term,” says Denis Gadbois, chair and CEO of the 400-person company. “That’s the benefit of being a good corporate citizen.” It’s also the benefit of devising a donations strategy that — whether or not you adopt Mediagrif’s approach — ensures that by trying to do some good you don’t end up doing harm to your own company.

© 2004 Chris Daniels

Originally appeared on PROFITguide.com