SmartWoman Magazine

July/August 2006

How many times have you seen an advertisement on television about a special project that a company is involved in? Or seen a company sponsor an event in our community, and felt good about that company? I notice the good work that companies do every day, and have made purchasing choices based on a company's community involvement.

And I am not alone.

Research has shown that the vast majority of Americans have a positive image of companies that support the causes they care about, and many consumers say they would switch to a brand associated with a good cause. Moreover, 86% of us actually want companies to talk about their good works.

And because of this, philanthropy can be an effective strategy in successful public relations and marketing initiatives. Companies know that contributing funds and time in the community is the "right" thing to do. But can it be the "smart" thing to do, too?

Corporations Partnering with Nonprofits

More than ever, it seems nonprofits need business – and business needs nonprofits.

Nonprofits need the financial and in-kind support offered by businesses, and businesses need the philanthropic association with nonprofits to underscore commitments to community, employees, customers, even shareholders.

These two sectors are increasingly regarding each other as partners in service. There are a number of benefits for both a company and the nonprofits when a strong partnership is formed.

Benefits for the Company:

· Brand differentiation

· Enhanced employee recruitment and retention

· Building new and deeper community networks

· Fostering talent and teaching new skills to employees

· Improved relations with regional and federal governments

· Credibility through association

Benefits for the Nonprofit Organization:

· Advancement of mission

· Increased revenue

· Enhanced visibility of the cause or the nonprofit's message

· Exposure to new audiences

· Connections to the corporation's network of employees, suppliers, distributors, and other contacts

· Access to corporate expertise in marketing and strategy development

Example: Teach for America and the Sylvan/Laureate Foundation developed a beneficial partnership, where TFA invited foundation representation on its advisory board and involved and recognized Laureate Education as a sponsor at major events. They also invited company representatives to meet with Teach for America candidates and kept Laureate Education fully informed on activities and plans. The Sylvan/Laureate Foundation made a multi-year commitment to Teach for America and in addition, created a special fundraiser for TFA called "The First Year," which is a documentary film about first-year students.

Certainly public relations is not the most important consideration in a partnership between a nonprofit and a corporation - but if done right, it can help advance the corporation's goal to be a good citizen by associating itself with a cause or organization that will reflect well on the company, its employees and it's stockholders – and assist the community.

Cause-Related Marketing – Another Way to Partner

Public relations professionals and corporate marketing executives often talk about "cause-related marketing" or CRM, which is defined as the public association of a for-profit company with a nonprofit organization, intended to promote the company's product or service and to raise money for the nonprofit.

The phrase "cause-related marketing" was first used by American Express in 1983 to describe its campaign to raise money for the restoration of the Statue of Liberty. American Express made a one-cent donation to the Statue of Liberty every time someone used its charge card; the number of new card holders soon grew by 45%, and card usage increased by 28%.

In order to diversify and enhance their funding bases, nonprofits have embraced CRM. The practice has evolved to include a wide range of activities from simple agreements to donate a percentage of the purchase price for a particular item or items to a charity for a specific project, to longer, more complex arrangements. Corporations too have been drawn to CRM due to the competition of the expanding global marketplace and the need to develop brand loyalty.

Example:   In the upper left hand corner of the return payment slip of a Verizon bill is a simple check box that says: "Yes! I want to be a Literacy Champion. Sign me up for a $1 monthly donation to Verizon Reads." Verizon's "Check Into Literacy" donation program is an invitation for individuals to join along with Verizon's philanthropic mission, which focuses on programs that create awareness, raise funds, and encourage collaboration among literacy providers. "Check Into Literacy" is a unique charitable fundraiser that allows customers to make a philanthropic contribution through a national billing system. Verizon believes that the check-off is an easy way for customers to join with them to improve literacy.

According to Tara Potter, Assistant Vice President of External Affairs for Verizon Maryland, "Check Into Literacy is a very easy way for Verizon customers to come together with Verizon to improve in the communities in which our customers and employees live and work."

Generating Media Attention for Companies' Altruism

As corporate citizenship has emerged as an increasingly important business tenet, many companies have explored how best to communicate about their corporate philanthropy.

And the media are paying attention. The Wall Street Journal recently created a column devoted to philanthropy, and locally, The Baltimore Business Journal lists the top corporate givers in their annual "Book of Lists" and the Daily Record has a bi-weekly column called "Adventures in Philanthropy." And SmartWoman devotes this bi-monthly column specifically to philanthropy!

As in all areas of proactive media outreach and coverage, creativity and persistence are essential when highlighting corporate philanthropy. And the benefits of success - adding dimension to the company's status as a good corporate citizen, while further building corporate reputation - truly provide a strong return on investment.

Example:  Good play on and off the field is a priority for the Ravens. The Ravens All Community Team Foundation's donation of home and away football uniforms for Baltimore City Public High School football programs was a clear win for all. The Ravens presented the student-designed uniforms at a M&T Stadium ceremony, with the players emerging from the tunnels, announced Game-Day style with a spotlight on the SmartVision board, while being cheered on by school representatives and fellow Ravens football players. Naturally, this generated a great deal of well-deserved media attention.

So, it's simple. Good corporate citizenship can – and should – lead to business success. And corporate philanthropy makes good business sense for all.

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Buffy Beaudoin-Schwartz is the Communications Director at the Association of Baltimore Area Grantmakers, the region's premier resource on philanthropy, dedicated to informing grantmakers and improving our community. ABAG members include representatives of more than 130 private foundations and corporations with strategic, ongoing grantmaking programs. She can be reached at: bbschwartz@abagmd.org; www.abagmd.org