Today’s employees want to work for companies they admire. They want to feel good about where they work and what their employers do both in the marketplace and for their communities. This means that if your business wants to hire and retain the best talent, putting in the time to develop or expand upon an existing corporate philanthropy program is imperative—besides, it’s the right thing to do!
In this article, we consider the business benefits of corporate giving and provide an overview of five types of corporate philanthropy programs. Let’s dive in.
Why Corporate Philanthropy is Important
Great leaders understand how important it is for businesses to do their part to make the world a better place, even while maintaining healthy profits and achieving other business objectives. Employees want to work for companies that support causes they care about and increasingly customers want to purchase from companies that give back. So there is a clear business case to be made for developing a corporate philanthropy strategy.
Aside from the fact that businesses have the power to do a lot of good in the world—and with great power comes great responsibility—there are also some serious business benefits to corporate philanthropy:
- Companies that prioritize corporate giving create positive work environments where employees see themselves as part of something bigger.
- Participation in philanthropic initiatives increases employee engagement and with increased employee engagement comes improved performance.
- Partnering with local nonprofits gives companies the opportunity to demonstrate how much they care and appreciate their communities. This can boost a company’s positive public image.
- Companies that support nonprofits and causes that customers care about also have more solid customer relationships.
All of this shows the importance of putting in place a strong corporate philanthropy program. But what types of corporate giving make sense for your company?
5 Types of Corporate Giving
Each type of corporate giving initiative below has pros and cons. You will want to do some further research and explore each type carefully before deciding what makes the most sense for your business.
1. Matching Gifts
This is the most popular form of corporate philanthropy. According to one analysis of matching gift participation, 65% of Fortune 500 companies have matching gift programs. Companies with matching gift initiatives match the dollar amount of funds given by eligible employees to eligible charities and nonprofits. For example, a company may have a matching gift policy for employees who donate to their colleges or universities.
Companies with such programs typically set parameters on the amount being donated, e.g., matching gifts up to $2,000, or create a group incentive, e.g., if employees together raise $5,000 toward a particular cause, then the company will match the amount raised.
Advantages/Disadvantages: Corporate matching gift programs are a great way to get employees to donate more to eligible nonprofits. However, do keep in mind getting employees to participate depends on internally promoting these programs.
2. Volunteer Grants
Volunteer grant programs are the second most popular form of corporate giving. Companies with this type of initiative donate a set amount of money to nonprofits in exchange for employees putting in volunteer hours with the same nonprofit. For instance, Microsoft offers a volunteer grant program matching up to $15,000 in employee contributions.
Typically volunteer grant programs are created with thresholds in mind, rather than an exact hour-to-donation ratio. For example, once employees have volunteered for 20 hours, the company will donate $500. This makes it slightly easier to track and report.
Advantages/Disadvantages: Volunteer grant programs promote volunteerism in communities near corporate offices and enable employees to gain recognition within their communities. Employees need to be aware of the threshold of required hours and any applicable deadlines for submission. You can make this step simpler by creating a page on the website or internal employee communication system.
3. Employee Grant Stipends
Some corporations award grants to employees, which are then donated to the nonprofit of their choice. Companies implement employee grant stipend programs in several different ways. So this one has some flexibility built-in.
Some businesses choose a handful of nonprofits to support each year and employees can apply to support one. At other companies, employees fill out a form with the details of a cause they wish to support and if approved, the company will send a check to the nonprofit in the employee’s name.
Advantages/Disadvantages: Allowing employees to choose where to direct donated funds can increase engagement and morale. But there is a risk that funds may be directed in ways that do not create the biggest impact.
4. Community Grants
Companies, rather than employees, initiate community grants. Community organizations apply to companies with such programs in place detailing how the grant would support their nonprofit missions. While community grant programs are often in place at larger corporations, companies of any size could implement such a grant.
Advantages/Disadvantages: There is a risk here that funds will be disproportionately granted to friends and relatives if outreach efforts do not reach beyond the networks and contacts of those involved in the selection process. It’s best to promote community grant opportunities far and wide.
5. Volunteer Support Initiatives
Finally, corporate philanthropy need not be about donating money exclusively. Volunteer support initiatives allow companies to partner with nonprofits to provide material support or specialized services that only those companies can provide.
A company specializing in cybersecurity, for instance, might dispatch employees to a community health center to ensure that all patient data is being securely stored and all anti-theft software is up-to-date. Under this volunteer support initiative, the company may provide the service free of charge or at discounted rates.
Advantages/Disadvantages: Smaller businesses especially may have a workforce that is already stretched too thin to offer volunteer support. Make sure that you have the bandwidth to extend such an offer to nonprofits.
All of the above programs could work for a business of any size from small businesses to Fortune 500 companies. If your company is interested in expanding corporate philanthropy, explore the pros and cons of each type before committing to one. Also, keep in mind that it may be a blend of two or more types that yields the best results.
Corporate philanthropy is a great way to encourage employees to give back to their communities while helping companies meet their business goals. At Potomac Recruiting, we not only help leaders develop a driven team that works together like a dream, but we also assist in successfully implementing new corporate programs. Contact us to discuss your corporate philanthropy and other business strategy needs today.