Corporate philanthropy is a powerful tool for companies to give back and engage more fully with the communities around them. It also comes with a wide range of benefits. Philanthropy improves reputation while helping to establishing trust and drive loyalty. Furthermore, giving back often helps a company get additional recognition in the community while improving overall employee satisfaction.
While these benefits encourage many companies to start corporate philanthropy programs, they may not know where to start. Below are some of the basic steps to take when establishing a corporate philanthropy program for the first time.
1. Take stock of current resources.
One of the biggest pitfalls that companies can fall into when establishing philanthropic engagement is to create a policy before actually taking stock of their resources. You can only give what you have. Creating a policy first can lead to disappointment.
Importantly, resources do not refer solely to money. Many individuals think primarily of philanthropy through monetary donations. It is important to recognize that both time and skills can also be donated.
Companies willing to give employees a day off each month to volunteer have a lot to give, as do those with specialized knowledge that could benefit charitable organizations, such as accounting expertise. Understanding what the company has to offer can help guide final policy decisions. Just be aware that the longevity of a program of this type hinges on employee availability and enthusiasm.
2. Outline program motivation clearly.
Companies may undertake philanthropy for any number of reasons. When a program’s intentions are clear, companies can better evaluate whether the goals of the program are being met. Without taking stock of these goals, the program may prove ineffective and fizzle out before very long.
Motivations can vary quite a bit. Some businesses may be focused mostly on the boost to morale and reputation. Others may want to address a particular issue in the community, especially if is it directly tied to the organization’s work. Companies should identify the benefits they hope to see from the program and then use this list to judge efficacy over time and make changes as appropriate.
3. Engage in due diligence.
Once a company understands the resources it has to offer and the goals that it hopes to achieve, it can start doing due diligence to identify potential community partners. Ideally, businesses start locally, especially if it is the first time that the people involved are spearheading a philanthropic initiative. However, it is also possible to build partnerships with larger organizations.
Companies should thoroughly understand a charity, from what they have accomplished and how to where they hope to go next, before establishing contact. This knowledge will facilitate the start of a healthy, mutually productive partnership. Due diligence also entails researching any local regulations that may apply to a new corporate philanthropy program.
4. Talk to peers.
Entrepreneurs generally have extensive professional networks. Reaching out to peers can provide newcomers to the charitable scene with information about best practices associated with corporate philanthropy programs.
Colleagues may have insight about the organizations that are easiest to work with or offer suggestions about unmet needs within the community. Often, companies can work together in complementary ways to increase the impact of each.
Also, peers can provide insight on what policy structures worked the best, especially if companies are unsure how to proceed. For example, sometimes it makes sense to pool resources and focus on one issue. Other times, it is more feasible to have multiple pursuits. One’s professional network is a great resource for practical answers.
5. Pay attention to the tax implications.
The benefits of corporate philanthropy include tax deductions. However, there are clear policies about what kinds of contributions are eligible. Companies should make sure that they are making effective and appropriate choices with their philanthropy.
Contribution limits may change from year to year. Sometimes that information can impact how companies shape their efforts. Companies should also consider how matching employee contributions can affect tax claims.
Sometimes, it makes sense to put restrictions on which organizations are eligible for employee contribution matches. That way, the company only donates to charities that align with its core values and goals.
6. Communicate with employees.
The success of a program depends in large part on employee engagement. Companies should try to involve their employees as much as possible in the creation of a new corporate giving program so that they feel invested in it.
However, the communication does not end there. The company should send their employees regular updates about the impact of philanthropy undertaken by the company. This lets individuals appreciate the difference they have made and may push them to do even more in the future.
Companies should also leave the conversation open. Employees may have new suggestions about future projects as well as valuable feedback about the current philanthropy program.