Here we are again, smack in the middle of the giving season. At no other time of year is there so much pressure on companies to give back to the communities in which they operate. While I wholeheartedly believe in philanthropy, I find myself increasingly frustrated by the obligatory nature of and expectations around corporate giving.
Obligatory giving is a reflection of limited-range thinking. Rather than Corporate Social Responsibility, I would prefer Corporate Social Opportunity. That’s because the best corporate philanthropy doesn’t just make a social impact — it also effectively adds to a company’s bottom line — in many ways.
In my world, giving and getting go together. Businesses should expect a return on their charitable donations. And for those who might disagree with me, think about this: charitable giving that reaps an economic return creates stronger companies that can make more meaningful contributions to their communities in the long run.
Unfortunately, business executives remain largely divided about their role in the social sector. In a 2010 Compas Inc. poll of Canadian executives, nearly half said that charitable giving should be left to shareholders. A mere one-third agreed corporations should support charities — as long as it was consistent with corporate objectives and employees’ desires.
Here’s an even more interesting statistic from a 2008 Imagine Canada survey of corporate community investment: The median cash donation was $2,000 (1.25% of pre-tax profit), while 25% of businesses didn’t contribute at all.
Ironically, businesses that unreasonably limit their charitable giving budget are also failing to explore how corporate philanthropy can help grow their business. When I co-founded FirstEnergy Capital Corp. in 1993, my partners and I decided from Day 1 to give 2.5% of pre-tax profits to charity. Thus, before we opened the door for business, we arguably cut the value of our firm by 2.5%. Around that time, fewer than 3% of Canadian businesses claimed any charitable donations, on average giving less than 1% of pre-tax profits. We wanted to do more —a lot more — for many reasons.
First, we truly used charitable giving as a marketing tool. Every time we made a contribution, we were very open about the fact we expected something in return. We wanted fair accountability and reasonable recognition. We also organized some of the most sought-after client events in the city — and turned them into successful fundraisers. Those parties included the highest quality entertainment, food and fun. They were always “free” events to clients with the “price” of admission being a cheque in the amount of the client’s choosing but payable to the charity of our choice. No cheque, no entry.
When you’re planning your giving, think about how you can engage your network of colleagues and use some creative marketing ideas
Second, we wanted our charitable giving to make an impact. It would be nearly impossible to measure the number of lives that have been touched — and dramatically improved — by FirstEnergy’s philanthropic work. Since inception, FirstEnergy has provided close to $10-million in donations to some 500 charities and community organizations, and has been one of the countless corporate players to help make Calgary a great community where people feel connected to each other and enjoy a great quality of life. Every business has a vested interest in creating stronger communities. As business guru Don Tapscott noted, “Businesses cannot succeed in a world that is failing.”
We have also engaged our broad client network to join with us in many aspects of the philanthropic process. In 1997, the Red River Flood caused enormous damage. In response, FirstEnergy allocated all of its trading commissions on a given day to Manitoba flood relief. At that time, a good trading day would have generated a bit more than $100,000 in commissions. But on that day, we raised more than four times that — closing at
more than $450,000. We also raised money for the 1998 ice storm in Quebec, the Alberta drought in 2002 and the Slave Lake fire disaster of 2011. In total, we raised several million dollars with all four of these initiatives.
What did we gain for our efforts? There was immeasurable public recognition and co-branding with larger companies, and significant recognition within the charitable community. There was also goodwill with customers, suppliers and staff, all of which collectively helped FirstEnergy dramatically increase its profile, develop new partnerships and grow its client base. In the past 20 years, FirstEnergy has enjoy incredible growth built on relationships and goodwill all developed, at least in part, by its charitable giving strategies. There is no doubt its commitment to community has been a core building block for the foundation of the firm’s overall success.
Your efforts don’t have to be as elaborate as these, but when you’re planning your giving, think about how you can engage your network of colleagues and use some creative marketing ideas to make your efforts stand out from the crowd, benefit your community, and return untold dividends to the cause and your company. That’s the opportunity in corporate giving.
W. Brett Wilson is one of Canada’s most successful businessmen and innovative philanthropists. His book, Redefining Success, is available from Penguin Books. @WBrettWilson