As manufacturers and retailers, we have the power to bring people new products, to influence their buying choices, to save them money and to make them feel good about themselves. We actually have a lot of power — and today, more and more companies are using some of that power to do a different kind of good in the world, by giving to meaningful organizations and causes.
When it comes to running a profitable business, giving away money isn’t the first thing that comes to mind, but it can actually be a great way not only to enact change in the world, but to inspire confidence in consumers and appeal to potential new customers. Research shows that shoppers want to support companies and products that contribute to worthwhile causes. Perhaps more than ever, consumers are looking to feel they are making a difference by putting their money toward brands that are socially responsible.
Philanthropy is a terrific opportunity for any business to leverage its power for good, and a great way to inspire customers' confidence in your brand.
That’s why, today, we are going to talk about philanthropy. What it is, how it can benefit your business, how you can engage in it effectively even when money is tight and what pitfalls to look out for. Get ready to put your money where your mouth is, as we learn all about philanthropy.
What is philanthropy?
Philanthropy is charitable giving to worthy causes. As we will discuss, this can take many forms. Philanthropy is a powerful way for a company to contribute its time, resources and influence to improve people’s quality of life, strengthen communities and much more. It’s a terrific way for companies to make a difference in a meaningful way.
That’s a worthy goal in itself, but by demonstrating social responsibility, philanthropy can also improve a brand’s image and reputation. Customers and employees appreciate social responsibility, and often gravitate more toward businesses that care about and support charitable causes.
Philanthropy also sets a business apart from its competitors. This differentiation can help a company stand out in the marketplace, generating brand visibility and even boosting employee morale.
When budgets are tight
Philanthropy sounds great, but with so many businesses struggling just to make ends meet, there may not be much extra cash to spread around. The good news is that while money is one important resource to contribute, there are many ways to practice philanthropy with limited budgets and revenue. Here are some alternative approaches to consider:
- Crowdsourcing is a powerful way to involve community members, customers and employees in donating to special causes without putting your bottom line, well, on the line.
- Fundraising events like auctions, dinners, raffles and sporting events are all excellent ways to funnel donations to a cause while boosting brand visibility.
- In-kind donations like products, services or expertise are also ways to share resources in lieu of monetary donations.
- Volunteering. There are plenty of organizations that welcome people who want to contribute their time and skills to help a cause.
- Mentorship and education are highly valuable tools to help others achieve success. Every thriving business has a success story to tell. By using their public platform, businesses can help elevate others around them by sharing their experiences, bestowing the knowledge they’ve gained. Many organizations hold events, conferences and online education courses where business owners and industry figures can donate their time teaching others how to grow their own success stories.
As you can see, there is an array of ways you and your business can contribute to meaningful causes, even if your contributions aren’t monetary. With that in mind, how do you figure out how much time/money/resources/etc. you do have, and with whom you should share it? How do you avoid shady organizations and make sure your efforts to do good actually make a difference?
When embarking on your company’s philanthropy journey, there are some important steps you must take to ensure you are supporting a legitimate, worthwhile cause that will make good use of your contributions. This process is well worth the time and effort. To get started with philanthropy, follow these steps:
- Make a plan: Make sure you outline philanthropic goals that best meet your strategic vision so you can focus your efforts accordingly.
- Budget: There needs to be an established budget within your strategic plan that outlines the company’s capabilities for philanthropy. If your philanthropic goals include volunteering, in-kind donations or other nonmonetary contributions, like the ones discussed above, include them as part of your philanthropic “budget.”
- Screen beneficiaries: Once you know your goals and your budget, you can identify potential organizations or groups you wish to work with. In doing so, look for an organization whose mission aligns with your own, with a strong reputation and established track record, as well as transparency in regard to its strategic plan, fund allocation and program impact. Make sure to avoid organizations with poor communication, lack of transparency, high-pressure solicitation tactics or excessive administration costs — though some overhead is needed to support organizational infrastructure.
- Track impact: Before your philanthropic efforts get underway, be sure there’s a system in place to track and measure their impact, analyzing where your resources go and the outcomes they support.
- Stay transparent: Transparency and accountability are key, both for keeping your plan effective and maintaining your customers’ trust. If you say a certain percentage of sales will benefit an organization, you need to be able to show that you followed through on that promise.
Philanthropy is a terrific opportunity for any business to leverage its power for good, and a great way to inspire confidence in your customers. By taking a little time to make sure you are doing it right, you can make sure you are embarking on a philanthropic journey that is beneficial for everyone involved.
Verna Meng is the co-founder and CEO of Blush, and the recipient of the 2018 International Women’s Entrepreneurial Challenge Foundation Award.