When corporations give to nonprofits, it can show up in many ways, whether on food pantry shelves or in employee-driven projects that improve lives in their communities.
But the decisions that go into determining the nonprofits and causes these businesses support often involves a high-level thought process that is increasingly seeking out long-term solutions where companies can drive successful outcomes.
That’s according to Robert Collier, president and CEO of the Council of Michigan Foundations.
Collier said companies often consider giving that helps with the creation of a talent pipeline, seeks input from employees, sustains an education continuum, and makes long-term investments so projects can have adequate resources.
“What we’re seeing is a change in corporations who may have always been involved in corporate sponsorships, but not necessarily the more traditional support of events like golf outings,” he said. “More and more they are asking the tough questions and want to see how their support is making a positive difference.”
While it’s true that companies engage in philanthropy as a way to help their communities thrive, the profit margin is always a part of the giving equation.
“I’ve worked with a lot of corporations over the years with their philanthropy. What I’ve learned is that everything a company does is motivated by the desire to earn a profit,” said Matthew Downey, director of nonprofit services for the Johnson Center for Philanthropy at Grand Valley State University. “Corporations are approaching philanthropy in a very self-interested way.”
He said corporate America views philanthropy in a much more strategic and sophisticated manner as it looks for opportunities to explore and grow those efforts. Rather than supporting nonprofits so they can succeed, they are now looking at it as a two-way relationship where they can derive mutual benefit.
“Companies use philanthropy to build their local brand or community relations. All of those goals help a company succeed,” he said.
Downey said an increasing number of companies also are looking at nonprofit leadership opportunities for their employees as a viable professional development opportunity.
TRAINING BETTER BOARDS
Many businesses have started to consider how they can make that board participation for their employees a more valuable experience. To that end, the Johnson Center offers a Nonprofit Board Certification Program that teaches employees how to serve on boards.
He said the first time Amway Corp. made the program available to its employees, it was filled within eight hours of the announcement going out.
“At Amway, it’s become part of the corporate culture to go through this board certification,” Downey said.
In addition to Amway, the program has been tried at Merrill Lynch in Troy and Spectrum Gerber Memorial Hospital in Fremont.
Downey said officials with Spectrum Gerber identified leadership opportunities for inclusion in their employees’ performance appraisals because they recognize the importance of this training for their team.
Participants in an internal Executive MBA program offered by Spectrum through the Seidman College of Business at GVSU received the board certification training because “Spectrum recognizes the importance of grooming new leadership with the new executive MBA folks,” Downey said.
Meanwhile, Amway and Steelcase Inc. executives are working on a broader community response to establish a better pipeline to get employees onto nonprofit boards. Downey said Steelcase also is taking into account the capacity of nonprofits to ensure a quality experience for their employees.
At other corporations such as Herman Miller Inc., all corporate giving decisions are made and carried out by an employee committee.
“It’s a strategy of philanthropy that’s not dictated by corporate leadership,” Downey said. “They’re getting the benefit of philanthropy in their community, but also have empowered employees to be a part of that corporate philanthropy. This is a great employee retention effort.”
EXPECTATION OF VOLUNTEERISM
As corporate donors look for mutual benefits, they’re also wanting their engagement with nonprofits to go beyond being an entirely financial relationship, Downey said.
“From a generational perspective, the millennials come into their adult workforce years as always having been involved in volunteerism and philanthropy,” Downey said. “The millennials’ idea of volunteerism, leadership and philanthropy is something they were exposed to in kindergarten and they’re ready to come into the workforce to do that.”
Collier said companies realize that while making the long-term investments in areas such as education, they also must be responsive to the immediate needs in their community. He said they frequently ask their employees for input to see what their areas of focus should be.
“Millennial research finds that there is a correlation between jobs and companies that are engaged and have corporate social responsibility and millennials are looking for companies that are engaged. A number have matching gifts and corporate distributions committees,” Collier said. “They’re listening to what’s on the minds of their employees. Millennials in particular want to be engaged and make sure that they’re having an impact.”
EMPLOYEES AS ADVOCATES
Downey said there is a greater recognition of the role a symbiotic relationship between the nonprofit sector and business community has on the overall economic viability of a community. He said organizations that deal with societal issues provide space for those relationships to be maintained.
The cultivation of those relationships yields goodwill for the company while also laying the groundwork for future successful “asks.”
Nationwide, businesses gave more than $18.45 billion in 2015 to support philanthropic efforts, according to the most recent report from Giving USA.
“You don’t approach the corporate office for a financial gift that you’ve pulled off the street,” Downey said. “You’re better off engaging employees through volunteer capacity. Have them volunteer to walk into the corporate giving office with you. It’s better if the employee is representing you.”
