I think most people would agree that Belinda Stronach, the former CEO and current executive vice-chairman of Magna International, knows a thing or two about competitive advantage. Under her leadership, Magna had record sales and profits each year, and a few of her business honours – just to name a few! – include:
- being named the most powerful businesswoman in Canada by the National Post
- being named a “Global Leader of Tomorrow” by the World Economic Forum
- being ranked #2 on Fortune Magazine’s list of the most powerful women in business
- making Time Magazine’s list of the world’s one hundred most influential people
As such, it is no surprise that I was very excited for the chance to hear Belinda speak recently at the Canadian Business Leadership Forum here in Toronto. I was particularly intrigued by the topic she planned to discuss: philanthropy as a competitive advantage in business.
Belinda spoke convincingly about the power of philanthropy to improve a company’s bottom line. Social responsibility is becoming a key criteria by which consumers and employees judge companies. As people become increasingly aware of their global citizenship, they want to feel good about where they work and what they buy. From the coffee they drink in the morning (fair trade?) to the food they order at a restaurant for dinner (local?), people want to spend their money in a responsible way.
As people are increasingly free-moving global citizens, they want to work for a company that is committed to the community in which it operates – and one that encourages employees to get involved. The companies that do this right have higher brand equity, lower turnover, and happier, more productive employees. In fact, a study showed that for every dollar a company gives to a charitable cause, it sees an average increase of six dollars in revenue.
That is an incredibly powerful and quantifiable metric that any smart company cannot afford to ignore. So how can you maximize the impact of your corporate philanthropy initiatives to ensure you maximize the return of your efforts? Through something Stronach calls “enlightened self interest”. Give back to the causes that most affect your business.
Oil companies were the first corporate leaders to invest in fighting malaria and AIDS because their workers abroad were getting sick. Tim Horton’s and Starbucks give back to the coffee growers with whom they work, educating them so that they can become better at operating their businesses.
And if you’re a small company, you can still get creative and give something other than money. Start a program that gives employees time off for volunteer work or recognizes their efforts in another way. Have your own company employees team up to participate in charitable efforts. Instigate challenges to spur inter-departmental competition in fundraising efforts. Make it your own.
At Espresso, we are committed to spending about 15% of our time resources working with local pro bono clients including United Way and The White Ribbon Campaign, helping each of them with efforts around brand identity, social media strategy, specific promotions, and overall digital platform so that they can in turn attract more donors and volunteers, as well as increasing awareness of their initiatives. As an employee, seeing immediate positive impact of the work that you do to help your community is extremely rewarding – and is definitely also a great way to strengthen your internal team.
The lesson that Belinda reminded me about during her speech is that, big or small, every company can and should be engaging in some form of philanthropy. It’s not just good for the causes and community. It’s simply good business.
What charitable causes have you seen companies engage in that have caught your eye?
Entries
November 16th, 2009 at 12:19 pm
Exquisite Safaris Philanthropic Travel has raised over 1 million dollars since 2005; 100% has been donated to our high impact NGO partners in destinations in the USA and around the world.
November 16th, 2009 at 12:41 pm
I love what Century 21 is doing with their Kids to Camp campaign for Easter Seals. Real Estate Agents from across the country using whatever works in their home town, be it a parade in Cambridge, a Silent Auction in Halifax, or online fundraising in White Rock. Everything anchors itself with an online website to inspire peers in their hometown to get involved.
The program sent over 150 kids living with disability to Easter Seals camps last year. The Goal is 250 this year and new ideas are being inspired every day between the social network that has been created.
Amazing program not only benefiting Easter Seals kids but also inspiring productivity and team unity for CENTURY 21 franchises across Canada.
November 16th, 2009 at 12:54 pm
Ooh great example Jason! I love when organizations let some control go to harness people’s creativity and ability to create local programs that resonate. I think the idea that small changes make a big difference is really powerful, escpecially when getting young people involved. Another great example of this is SickKids Change Crusaders program in which kids of every age can get involved by creating programs to collect change for SickKids.
Thanks for commenting!
November 16th, 2009 at 1:23 pm
Wow, that is great – what is the site? I’d love to see it!
November 16th, 2009 at 1:49 pm
I have stalked down Jason’s Kids to Camp example, site here: http://century21.easterseals.ca/
And SickKids Change Crusaders is: http://www.changecrusaders.com/
Any other great examples?
November 16th, 2009 at 6:12 pm
There are two right now. http://www.century21.easterseals.ca is soft launched now. That site will showcase all the lovely community giving programs initiated around the country and what worked in what communities. http://www.century21kidstocamp.ca is for the realtors using the Online system. The site is powered by Artez Interactive (excellent online fundraising software provider out of Toronto). The site gives offices/individuals their own fundraising tools to allow for account management, donation tracking, resource sharing, all that loveliness.
Everything is going through a face lift to welcome year 2 of the program January 1st, but this past year’s work is well documented.
Care: Totally agree about the harnessing of local programs, we’ve found that no one town works the same, as you’d expect. The diversity in the Century 21 population is very much a microcosm of the country at large, and it is great to see personalities take a unified brand and make it work perfectly amongst their own home town both for the charity as well as their personal brands.
November 16th, 2009 at 9:13 pm
Aw. I love that. Localization of a national concept = very smart.
November 17th, 2009 at 6:54 pm
Great piece!
Any chance you can provide a reference for the study you mention here: “a study showed that for every dollar a company gives to a charitable cause, it sees an average increase of six dollars in revenue.”
Thanks
November 19th, 2009 at 12:03 am
Hi Lea,
Great question, I have this written down as a direct quote from Belinda and did not have a chance to speak to her directly to inquire. I’ve done some digging and the only article I can find is this one from WSJ published in 2007:
http://online.wsj.com/article_email/SB116805166852669014-lMyQjAxMDE3NjA4OTAwNTkxWj.html
It states that for every dollar donated a company should see profits increase by $2-$3 dollars. Perhaps average $6 increase in revenue turns out to be approximately $2-$3 in profits? Either way I do not have the source from my original statement so this may be a good one to reference.
I love the due diligence!
December 18th, 2009 at 5:14 am
Often we forget the little guy, the SMB, in our discussions of the comings and goings of the Internet marketing industry. Sure there are times like this when a report surfaces talking about their issues and concerns but, for the most part, we like to talk about big brands and how they do the Internet marketing thing well or not so well.
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