Friday, January 7, 2011

Business Doing Better at Doing Good- 2011 Trends in Business Philanthropy

The month of January is named after the god Janus, the god with two heads, one looking behind and one looking forward. Apparently the god Saturn, gave Janus the introspective ability to see into the past and the gift of seeing into the future. I can make no claims of having god-like abilities, but in reviewing the past year's stories and tweets, it seems that there is trend is to find newer and better ways for business to do good.

And these are the trends I see that will be significant in the year of 2011 for creating positive new directions in business philanthropy.

Using the Social Sciences to Understand the Dynamics of Giving Behavior

More and more studies in social psychology and behavioral economics have been addressing the question of what motivates people to give. Businesses hoping to use cause marketing and to engage their customers in giving, and non-profits seeking to find ways to get more value from their corporate sponsorships should tap into these research studies more. Take for example, the recent study about amusement park goers who paid more for their photos on a ride when they could choose their own price and the profits went to charity. Sceptics of the Panera Cares Business Model, (we profiled their first cafe opening, St Louis Bread Company Cares) which is an example of this kind of approach, should check out the video on CBS News.
For more research studies on consumer giving behavior check out: Ways Your Company Can Give More Bang For the Buck.

CSR's Umbrella

Last year I predicted that Cause Marketing and Corporate Giving would become more differentiated. Well I was wrong. The lines have gotten even blurrier between CSR, Employee Volunteerism, EVP, Cause Marketing and Corporate Giving. Is it more that they are distinctions or that they justifiably fall under the CSR umbrella? More and people cite all of these in the context of each other and often interchangeably. Beth Kanter suggests in her blog post.Corporate Altruism: The Blurring of the Lines Between CSR and Cause Marketing that perhaps the lines do not distinguish one fore another but that it is more of a continuum. CSR this past year has been struggling with finding a definition of itself, but more than being a continuum, I like the image of an overencompassing arc, like that of an umbrella..

Employee Drive Philanthropy

Yahoo employees do it, Blackbaud's employees do it and GiveSomethingBack's employees do it: various forms of employees recommending charities; designing the giving programs often in forms such as competitions,scholarships; sitting on the grants committee; and other forms of direct emplyee involvement.
Employers are seeing that when giving back to the community is a company grassroots effort, not only is there more by-in from the employees, more total giving in time and money, but also more loyalty given back to the company.

Skills Based Volunteering 

While providing extra hands for bagging food or assembling backpacks will never go away as an important function of Employee Volunteer Programs, more meaningful ways for employees to help communities are
emerging.  Bea Boccalandri of the BCCCC, has been advocating that businesses create more of these kinds of asset based opportunities for employees volunteering as a way for companies to provide their employees with more engaging and rewarding experiences that help build the capacity of the non-profit organization  in more sustainable ways. Skills based volunteering also serves as great employee training opportunities for the companies involved. Her suggestions may seem radical, and so she acknowledges that these changes need to be small at first and that both types of volunteering can co-exist. And she cites examples of companies like Aetna and Hasbro and Levis that have been doing so.

Directed Giving Through Voting and Liking

Using social media to involve the public in making the decision for a company's giving is going to get bigger and bigger. It's an approach that appeals to many as it can engage thousands in feeling that they can contribute in some small way by voting for their favorite charity or "liking" a facebook page, that results in an award or donation given by a business to the winner. Witness the Pepsi Refresh Project, (which I mentioned in last year's trends picks, The Classy Awards, (where two of our featured businesses, Sweets Trucks and GiveSomethingBack were finalists, and the American Express Small Business Day, where just a vote on a  website or a Facebook "like", brought about large corporate funding towards specific projects and causes.

More Public Scrutiny

As businesses will continue to involve the public in their giving programs, so will the public be more involved in the judgment of corporate giving. Witness the outcry over the Punk Buckets for a Cure, BOBS Shoes and Target's funding of political campaign. While some of the public will want to be more included in corporate giving, others like Michael Hiltzik of the LA Times (who gave us a cool shout out) may want to be left alone to their own philanthropy.
Whatever a company does, you can be sure the public will be watching to make sure that a company's giving is neither insincere, nor causing harm in any way other way, nor just plain dumb.

New Forms of Philanthropic Business Models 

While many were dubious of Panera's business model, more and businesses are coming up with innovative philanthropic business models. Even staid Nordstrom is planning to open a philanthropic department store in Manhattan with all profits going to charity. We have seen the B corp becoming recognized as a legal entity in several more states. Several forms of "buy one give one" business models, and more businesses like Panera with "set your own pricing schemes" have sprung up.
It is possible, of course, that some of these innovative philanthropic businesses will fail, but perhaps at no higher rate no than other start ups. And if so, so be it,  innovation requires taking taking on the risks of failure, but also the rewards of success and of leading the way in developing a whole new sector.

In spite of what I consider my one missed prediction for 2010, I think that last year's predictions, which you can read here, have proven to hold up and will grow to have even more importance in 2011. Business giving in partnership with consumers, non-profits and communities, will be evolving and will create better solutions to local and global problems.

I look forward to bringing more of these stories here in 2011.



Bill Ryan said...

Excellent post! Thank you.

I completely agree with your statement that when employees volunteer it's "a way for companies to provide their employees with more engaging and rewarding experiences.” We study this from a marketing perspective, and find that the benefits to the employer from this kind of service can be actually be even better when a little publicity is added.

When a business volunteers time or resources to serve the needs of the community, and then ties in some publicity, it’s called "civic marketing" - not cause marketing. Cause marketing is about fundraising and aligns the brand with a specific cause or charity. Civic marketing is not about fundraising. It's about serving the community, and doesn't necessarily align with a non-profit organization.

We find that by adding the publicity, the employees usually feel that the experience was even more rewarding. They also usually gain a renewed respect for each other, and for their employer - Especially if the project is something that the employees believe in.

Employees that have had problems getting along on the job sometimes find that working together in a volunteer setting helps them learn to get along and work together in new, more productive ways - Another important benefit to the employer.

The publicity from a civic marketing effort can also generate excellent brand building results, and public relations people find that civic marketing is a great source of material for press releases.

People in the community being served often become advocates for the brand, spreading the brand message with valuable word-of-mouth advertising.

Civic marketing is an important part of the future for marketers, and it's very compatible with the principles of corporate social responsibility (CSR).

Thanks again for the great post.

Lalia Helmer said...

Hi Bill,
I am truly excited to learn more from you about civic marketing. You have done a great job outlining the benefits to the community and the volunteers of marketing these citizenship efforts.
Thank you so much for bringing this up in the post.