Supporting community groups and nonprofits returns goodwill and visibility to your business.
Mike Horner may never see a dime for all the good he does in the world, but he knows his social conscience is paying off for his business.
As chairman of the board of Tom Sawyer Camps, a California children’s camp with 10 full-time and 170 seasonal employees, Horner is visible throughout the local nonprofit world. He serves on boards, gives financial support to local schools, and writes checks to various nonprofits.
None of this drives business directly, but all of it helps in the long run. “Word of mouth is our most effective method of marketing, and I suppose doing these good works keeps that alive. It keeps us in front of people, but that this isn’t why we do it,” he says.
Horner’s take is typical of many small business owners. They do good for the sake of doing good, and look for indirect returns in the form of good will and visibility.
To get the most out of corporate citizenship, a business owner has to balance good works with self-promotion. Too much of the latter outweighs the former.
“Business owners definitely need to focus on doing good deeds for the good of those they’re serving , and not solely for the benefit to their own reputations,” says Marianne Carlson, a leadership development expert in Orlando. “But photos of them handing over a giant check, or swinging a hammer at the Habitat House, can have the desired effect without too much self-promotion. They can mention in a newsletter that their people raised $ 1,000 for the local food bank, and make it all about their employees’ work, not just the owners’.”
For those who can strike the balance, community involvement can pay off in the form of good will, according to a philanthropic study by Cone Communications. The study found 85% of consumers have a more positive image of a company when it supports a cause they care about, and 90% want companies to tell them the ways in which they are supporting causes.
When it comes to the bottom line, 41% of respondents said they had purchased a product because it was aligned with a cause or issue.
Bottom Line Results
How can philanthropy boost that bottom line? In a paper on the social impact of corporate giving, Terence Lim of the Committee Encouraging Corporate Philanthropy highlights these benefits:
- Employee engagement. When employees take part in philanthropic initiatives, they feel a closer sense of identification with the organization.
- Customer loyalty. A company’s commitment to communities and causes builds brand perception, repeat business, and word-of-mouth promotion.
- Manage downside risks. Philanthropic initiatives give companies a counterbalance to negative perceptions or ways in which the company may not be meeting public expectations.
- Business innovation. Through philanthropy, business owners may come to forge new relationships, creating opportunities to find, test, and demonstrate new ideas.
To reap these rewards, it’s important to support an appropriate cause, Carlson says. "Aligning with the right charity is key. Business leaders need to know their target market, and align themselves with charities that are attractive to their customers," she says. "A veterinarian could align with a local animal shelter, for example, because their customers are animal lovers. And the animal shelters can use the expertise that a veterinarian has to offer, so it’s a perfect match."
Such strategic pairings can occur in a range of industries. "Plumbers and roofers that align with Habitat for Humanity can show their community involvement and also give a deserving charity the benefit of their special expertise," Carlson says. "Orthodontists can align with PTAs, Little League teams, and Boy Scout troops, because those organizations are important to the parents whose children become their patients. Knowing which charities matter to the target market is critical to a successful cause-marketing strategy."
At Tom Sawyer Camps, Horner is ever mindful of both the rewards and the rationale that drive his philanthropic efforts. "We do get positive notoriety, people know our name," he says. "But primarily we do it because we feel it is part of our civic responsibility. We want to support groups that are doing important things in our community, especially involving children."