Corporate philanthropy benefits not only the community but your company and its employees as well. And while that’s always been true, it’s even truer today. As society shifts toward more prominent social, environmental, and economic responsibility, the importance of corporate philanthropy has increased as well. It’s become essential to business success, bringing more benefits with a greater impact on performance.
This article will explore five business benefits of corporate philanthropy and provide practical recommendations for what your company can do to achieve them.
5 Business Benefits of Corporate Philanthropy
1. Increase Employee Engagement and Productivity
Up to 78 percent of employees want to engage with corporate social responsibility initiatives. Philanthropy programs that directly involve employees help create deeper connections and increase employee engagement. Employee engagement then improves productivity and business results. Research by Gallup even found that teams with high employee engagement have 21 percent higher productivity than their counterparts.¹
How to Use Corporate Philanthropy to Boost Engagement and Productivity
To see these benefits, create a corporate philanthropy program that encourages employees to get involved. Allow employees to select the charities they want to donate to, create crowdfunding campaigns, and use paid volunteering to amplify their impact.
By giving employees the ability to choose the charity they benefit, with tools that help them make a bigger impact, you help them become more invested in the process. As they continue investing and getting involved, you’ll see correlations in engagement and productivity.
2. Improve Brand Awareness and Reputation
The second key benefit of corporate philanthropy is improving your brand’s reputation with employees, customers, prospects, partners, and the community at large. The more good you do, the better your brand perception will be. You also maximize the opportunities your audience will have to connect your brand with positive social initiatives.
How to Use Corporate Philanthropy to Improve Brand Perception
To improve your reach and reputation, consider donating funds to charities under your company’s name, from a central account that ensure your brand is directly connected with corporate giving.
You can also offer employee matching gift programs and crowdfunding tools that help amplify your impact. Matching gift programs will create a buzz among employees, promoting your brand through word of mouth. Crowdfunding campaigns that get other individuals and businesses involved. Crowdfunding is especially useful for increasing the funds you can donate as well as helping the public connect your brand with charitable initiatives.
3. Attract Top Talent
Businesses are only as effective as their employees – and employees are starting to demand attention to corporate responsibility, philanthropy included. It’s part of a larger shift in society where employees want their employer to balance the pursuit of profit. Employees are measuring the success of their careers and the businesses they work for in both advancement and positive impact on the world around them.
Millennials are one of the key drivers in this shift, but other generations are also deeply involved, making this a change businesses can’t ignore. As employees become more socially conscious, they put those values into consideration when deciding where to work. According to a Deloitte study on volunteering, Millennials were “twice as likely to rate their corporate culture as very positive” if their company participated in workplace volunteer activities.²
In addition, research shows that over half of employees will not work for a company that doesn’t have a strong CSR commitment. By positioning your company as a socially and environmentally responsible organization, you help attract and retain top talent that helps your business improve performance.
How to Use Corporate Philanthropy to Attract and Retain Talent
Achieve this corporate philanthropy benefit by marketing your program as an employee benefit. If you have software that includes 401k-style, pre-tax contributions, and matching gifts, you can include that information in job descriptions, postings, and advertisements, for example.
Use the same tactic with your current employees to encourage them to engage with your company and its corporate giving efforts. As they become more involved and see the impact they can make, they’ll be more likely to stay with your company.
4. Increase Sales
Corporate philanthropy doesn’t just help attract talent, it also helps attract new customers. Studies show that people will spend more with brands that support causes. When choosing between two brands of equal value, 90 percent of consumers are likely to switch to a cause-branded product.³
Eighty-seven percent of consumers also said they would purchase a product simply because a company advocated for an issue they care about.⁴
How to Use Corporate Philanthropy to Increase Sales
To realize this benefit, market your philanthropic activities to the public. This could be through advertisements, social media posts highlighting contributions, or other awareness-level activities. You could also take the cause-branding approach, where you link your products directly to the charities and causes you support. For every product purchased, your company could donate a certain amount to charity.
If you can’t donate continuously or consistently market your corporate philanthropy initiatives, consider doing targeted campaigns. Work with your employees to ramp up giving during the holiday season, where your company donates based on sales and employees spearhead crowdfunding campaigns to increase your impact. Market your efforts to the public during your campaigns so consumers know every purchase they make supports a company with a strong sense of social responsibility.
5. Tax Deductions
While it could take time to see how philanthropy increases employee engagement, create awareness, attract talent, increase sales or benefit your community, one thing you will quickly notice is the tax savings associated with charitable giving.
While companies shouldn’t give with the sole expectation of financial gain, the fact is, helping a charity in need does provide economic rewards. Companies typically receive tax deductions from charitable giving and should consult with a finance professional to ensure compliance with all tax requirements.
How to Use Corporate Philanthropy for Tax Benefits
Corporate philanthropy is one of the most time consuming and management intensive CR strategies, especially when it comes to documentation and taxes. Regardless, to properly handle tax needs, you have to accurately track and record your donations.
Corporate philanthropy platforms can help with this, streamlining your program by tracking corporate and employee giving activities in one location. The best platforms will also provide a list of approved 501c3 charities so you don’t have to worry about the legal issues that come from giving to the wrong organization.
Increase Your Corporate Philanthropy Benefits with an Employee-Centric Program
When carefully executed, corporate philanthropy programs can positively impact business performance, resulting in a more productive and engaged workforce, as well as a strong brand reputation that attracts talent and increases sales.
But for businesses to see any of these corporate philanthropy benefits, they need to build a strong program that empowers employees. Employees should have the freedom to choose their own causes, start their own campaigns – such as a crowdfunding campaign – and spread the word through advocacy. A solid program that incorporates all these elements and ties into your larger CSR strategy will help improve your business performance.