Most business owners know that being active in the community is important for success. And they do that by engaging with charities through volunteering, donations and board service. In fact, over 90% of business owners donate to charity or say that they wish they had the resources to do so. But those business owners also don't feel like they're getting maximum return on those charitable investments. Here's why: The 6 corporate philanthropy mistakes to avoid.
Mistake #1: Keep quiet
There's an interesting cultural phenomenon that frequently references the Sermon on the Mount – "don't let your left hand know what your right hand is doing." In other words, the only valuable charity work is that which is done in secret. I'd counter with, "If a tree falls in the forest..." The only way to receive any business benefit from CSR is to make sure that everybody knows you're doing it, from employees to potential customers.
Mistake #2: Forget to talk about impact
A few days ago, a little Google ad for the Bank of America Charitable Foundation popped up on a webpage I was visiting. It said something like "Last year, Bank of America gave $200 million to charity". While that's a big number, I was a little underwhelmed. I found myself wondering what it was that they bought with that $200 million. Citing an amount of cash is just too abstract – I want to know exactly how that money is helping the community.
Mistake #3: Be inconsistent
Flexible, dynamic businesses are more successful, and nobody likes arbitrary rules and bureaucracy. But just like funding a retirement account, powerful corporate social responsibility hinges on consistency. By picking a specific cause or strategy, you can actually demonstrate impact over time. Being consistent with your programs will give you much greater business benefits than just randomly sponsoring tables at charity events.
Mistake #4: Do it for the wrong reasons
Even though 86% of consumers expect business do do more than just make a profit, nothing turns them off faster than insincerity. Making a token effort to deflect attention from unethical or destructive activities will only backfire. Like the backlash when Philip Morris supported a youth smoking prevention campaign.
Mistake #5: Make it complicated
Common practice for firms that make charitable gifts is to require complicated application forms (frequently downloaded from the internet). Proponents of these forms think they do two things: discourage lazy charities from applying, and help with the decision on whether or not to pick a particular charity. But you can save a lot of time just by collecting the charity's EIN and checking it against the IRS's Exempt Organization Select Check tool, and following that up with quick checks on Guidestar and Charity Navigator. If the charity still looks good after those three tests, then you can ask for more information.
Mistake #6: Say "No" (or "Yes")
When you're deciding what to eat for lunch, do you advertise that you want something to eat, and then say "no" to everybody that responds until you find something you like? Unless you're a Roman emperor, probably not. So why is that how we do corporate philanthropy? Instead of passively responding to charity requests, go out and find something that's meaningful to you or your firm.
For more tips and tricks, check out the Valor CSR blog, or download our free whitepaper on CSR Best Practices for Small to Mid-sized Business.