Make Giving Part of Your Business Strategy

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SPECIAL REPORT

Corporate Philanthropy

• Make Giving Part of Your Business Strategy
• Pro Bono Work for Entrepreneurs
• Partnering with a Cause
• Book Shelf: Good for Them, Good for You
• Quark Founder Tim Gill On Giving
• Slide Show: Why Leading Entrepreneurs Give
• Video: Small Business Volunteering

A client's melanoma diagnosis insipired Linkow RAY NG

Turpin gives you local nonprofits that support the arts COLBE LYSNE

Conti donates monthly to New York's Partnership for the Homeless JORDAN HOLLENDER

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Jason Linkow, founder of the upscale Metafolics Salon in Denver, found his philanthropic inspiration in a client. Although Metafolics regularly makes in-kind donations to community fund-raisers, the 12-employee, $500,000 company's major philanthropic work focuses on melanoma research. "A client of mine was diagnosed with Stage IV melanoma five years ago," says Linkow, whose grandmother also died of the disease. "It really was the catalyst that motivated me to make a difference."

Linkow launched his annual "Cuts for a Cure, a Lifetime of Health" event in 2004, offering a free spa service, a full-body skin cancer screening, and a goodie bag to customers who donated $100 directly to the University of Colorado Foundation, which supports one of the country's top melanoma research facilities. Spa employees donate their time to the event, local dermatologists provide the skin cancer screenings for free, and much of the gift bag contents are donated by the salon's vendors. Linkow has even organized "challenge matches" with 10 Denver area foundations. If the salon meets its goal of raising at least $5,000 during the event, those foundations will match its contributions to the University of Colorado Foundation. The result: For a mere $200 out-of-pocket cost, the salon was able to raise $65,000 last year.

Once you've settled on a cause, think about the various nonprofits that support it, and ask which would help you best achieve your business goals. "There is a way to be strategic and get business value out of your giving, and still do it in an authentic way," says Susan Hyatt, founder of philanthropy consultant Business Nonprofit Connections. Are you trying to raise visibility? In that case, choosing a small organization to which you can become a major benefactor would be a good strategic move. If you're looking to improve recruitment and retention or to boost morale, canvas employees for their opinions about worthy causes. For those looking to increase sales, it's worth asking if a nonprofit's other patrons might be potential clients.

You'll also want to evaluate the nonprofit itself. Speak to other business owners affiliated with the organization about their experiences, and consult the Web site of the Better Business Bureau, which ranks nonprofits at bbb.org/charity.

Premier Relocation Solutions worked with a number of charities before finding the right partner. The $17 million company, which rents out luxury corporate apartments in New York and New Jersey, launched its giving program in 2000, donating gently used furniture and household goods to the Salvation Army. But the Salvation Army preferred to cherry-pick a few pieces at a time and couldn't manage Premier's volume. Next, says Carla Conti, one of the 19-person company's founders, Premier tried to donate to local churches, which would then sell the furniture at flea markets. Turned out the churches could take goods only on a seasonal basis. Eventually, in 2004, Premier joined with the New York-based Partnership for the Homeless, which helps families who are leaving homeless shelters. The company usually donates a truckload of furniture each month. The Partnership needs goods year-round, and, says Conti, has ample warehouse space in Brooklyn.

Don't forget to do some budgeting. Analyze what the value of your giving has been to date. Is that sustainable, or should it be scaled back? Can it grow? Is it primarily cash, pro bono work, or in-kind donations? The national average for small companies, says Professionals in Philanthropy's Wedding, hovers around 1% of pretax income, but each business will be comfortable with a different level. "A lot of companies don't know exactly what they're giving, which is ridiculous," says Hyatt. "If philanthropy were a business unit, you would know what you were spending to the penny."

Then establish some metrics. That means preparing to track what your employees are doing and how much time they give, and the value of in-kind gifts and pro bono services. If you're giving cash, ask your organizations to tell you how they spent your money, and consider the payback. Did you gain greater visibility or any new clients? You don't need to quantify the returns on every dollar spent, but if you don't keep track of what you're doing, it's hard to know the benefits either to you or your cause.