How Corporate Philanthropy Can Grow Your Business
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Episode 116 Transcript:
Chris Curran: Growth Igniters Radio with Pam Harper and Scott Harper®, Episode 116: How Corporate Philanthropy Can Grow Your Business. This episode is brought to you by Business Advancement Incorporated − enabling successful leaders and companies to accelerate to their next level of growth. On the web at BusinessAdvance.com. And now, here’s Pam and Scott.
Pam Harper: Thanks, Chris. I’m Pam Harper, Founding Partner and CEO of Business Advancement Incorporated, and right across from me, as always, is my business partner and husband, Scott Harper. Hi, Scott.
Scott Harper: Hi, Pam. And as always, it’s wonderful to join you again for another episode of Growth Igniters Radio with Pam Harper and Scott Harper®. For our first time listeners, our purpose is to spark new insights, inspiration, and immediately useful ideas for visionary leaders to take themselves − and their companies − to the next level of growth and success.
Pam, our regular listeners know that we keep up with emerging trends for being first, fast, and foremost in business. One of the trends we’re seeing more as we speak with CEOs is that an increasing number of companies are actually integrating corporate philanthropy into their core business strategies. This goes well beyond corporate giving.
Pam Harper: That’s right. Whether they’re partnering with community organizations to employ the disadvantaged, or supporting environmental causes or some other philanthropic purpose, they’re seeing impactful results for their companies as well as for the world.
The key, though, is to put this together in a way that stakeholders inside and outside the company can embrace. And then, of course, it’s essential to make things happen in a way that’s a win for everyone.
Scott Harper: That’s sometimes easier said than done, I suppose.
Pam Harper: Exactly. So today, we’re glad to welcome back as our guest Karen Eber Davis, author of the book 7 Nonprofit Income Streams: Open the Floodgate to Sustainability! Karen is president of Karen Eber Davis Consulting, which helps businesses use philanthropy as a propulsion tool to grow their profits and performance. She’s known as a catalyst and architect of meaningful income growth. She’s also the leading authority on ways that nonprofits and for-profits can engage with each other to create dynamic partnerships. You can see much more about Karen’s bio by going to GrowthIgnitersRadio.com, episode 116, and scrolling down to “Resources”. Karen, welcome back to Growth Igniters Radio.
Karen Eber Davis: Thank you, Pam.
Pam Harper: Let’s start out talking about some of the latest trends relating to businesses and philanthropy. Now, we’re seeing that with governments facing pressure to decrease spending on all types of what they’re calling non-essential causes, there are more businesses that are picking up the slack in 2017. What do you see on that?
Karen Eber Davis: I’m seeing very similar conversations, but what I find is interesting is there’s some gap in understanding about the size of this “slack,” that would be picked up by businesses.
Pam Harper: Tell us more about that.
Karen Eber Davis: Well, just to give you a big picture, the nonprofit world is about $1.5 trillion a year. Of the six cash sources for nonprofits businesses are the smallest. They provide only one to two percent of that. Governments provide about 21% of nonprofit funding, so that’s a lot of “slack” that a business would even think about picking up. This leads us to the question of “How do we as businesses leverage what we’re doing to create better impact?”
Scott Harper: How, in this environment as we’re talking about it, how have customers’ and employees’ and even government expectations changed about how corporate philanthropy figures into the picture of creating benefit in the world and creating benefit for the company?
Karen Eber Davis: I think historically, we thought about philanthropy as something nice to do. This is becoming more about something that, if we want to conduct business, it’s essential to do − and do well.
Scott Harper: Right.
Pam Harper: It’s an essential part of functioning as a world. So let’s take that a step farther, because I think there have been more changes going on in terms of customers’ and employees’ expectations about corporate philanthropy. How have you seen this change since last year?
Karen Eber Davis: What I’m seeing is that people are grasping or recognizing that if they don’t act and do something, their employees − directly, immediately − are going to be really impacted. Let’s pick on Meals on Wheels, which has been in the national headlines about funding cuts.
Pam Harper: Okay…
Karen Eber Davis: Say that I’m an employee of yours; if you have 500 employees, you probably have maybe even 50 people who have either elderly parents or someone who is served by Meals on Wheels. At midday, you know they’re getting this touch by the community, and they’re getting this hot meal, whether they’re in your town or whether they’re across the country. All of a sudden, this goes away, so your ability to embrace work and be at work goes down. So what does that mean for an employer? “How do I keep my employees focused if they’ve got things pulling them off task?”
Scott Harper: Right. Well − how do they?
Karen Eber Davis: Well, that’s an interesting question − how we’re going to do that. Perhaps we as individual businesses aren’t going to impact everything, but by picking one or two causes that resonate with employees and the community, we can do something. And we can have greater impact by creating multiple wins. Can I give you an example?
Scott Harper: Absolutely.
Karen Eber Davis: Okay. An insurance company in town sells commercial insurance; they have about 500 businesses as clients. They recognize that employees who are parents can get puled off task when school days are interrupted, like when it’s summer, or there’s missing the Friday off, like many of us will have this week.
Scott Harper: Okay…
Karen Eber Davis: What happens to parents of children is there’s this distraction going on. So what this insurance company has chosen as their cause and their investment area is helping fund excellent afterschool care like camps and things like that. What they’ve found is that yes, it helps their employees, because it helps them to shortlist who’s a good provider of these services. But also, their 500 customers also have employees with the same challenges, so there’s another win. It’s a win for our employees; it’s a win for our customers’ employees. It also acts as this vetting process for other businesses who might want to support causes like this. There’s a million and a half nonprofits, so where would I invest my money. “Oh, this trusted partner who does insurance, relates to money, trusts this nonprofit; therefore, my gift might follow that as an option.” In the case of this specific company, a conversation like that led to a million dollar gift for a nonprofit. So it’s that kind of “I choose well for my reasons as a business. I see customer benefits, and all of a sudden, I see I’m a leader in this.”
Pam Harper: Yes. Also, of course, employees care about where they work, and a company that is actually giving back to society in some meaningful way has a powerful tool for recruiting and attraction and retention, as well.
Karen Eber Davis: Absolutely. Some recent research from the Case Foundation, which was funded by the AOL founders, said that it’s the third reason Millennials will choose a company. Number one is what a company does. The second is work culture, and the third is causes it supports.
Pam Harper: It’s very compelling. And so all of this is going on, and yet one thing that, at least, we’re seeing is that there are still leaders who are trying to figure out how to justify the return on investment of corporate philanthropy. Now, you talk about something called “return on philanthropy” − “ROP”. Can you tell us a little bit about what you mean by that?
Karen Eber Davis: Well, of course, what you could achieve with ROP is endless and, you know, varied and huge. But what I see is that the common returns on philanthropy are improvements to branding, i.e. getting customers, having people know about me, the classic “I will put my name on the banner outside the big event.” The second is this whole employee engagement − “I can solve my employee problems” − like we just talked about with the insurance company. The third is “What kind of place do I want to live in?” A clear example is “I believe that every community should have an orchestra, because I love music and I like customers who like music. We have that in common, and if I want to gather employees in my location, I want an orchestra to be here.” That could be a shaping the community kind of approach.
Those are returns. The data shows individuals who give money actually improve their wealth, so as an individual, if I do this, I benefit in multiple ways. But the company data also shows a positive correlation. It’s not as clear, however, and my interpretation of why it’s not as clear is that everyone’s lumped together. It’s not distinguishing companies who are being strategic about their philanthropy, and how that impacts your bottom line, not short term, but a long-term process.
Pam Harper: Right. Having that clarity about how it all fits with what you’re trying to do as far as growing your company is a very important thing. We’re going to talk about that in the second segment, but first we’re going to take a quick break. When we come back, we’ll talk more with Karen Eber Davis about how companies can increase their return and growth through corporate philanthropy. Stay with us…
Scott Harper: This is Growth Igniters Radio with Pam Harper and Scott Harper. We’re brought to you by Business Advancement Inc., and we’re on the web at BusinessAdvance.com. We focus on enabling visionary leaders to dramatically increase momentum in their companies to accomplish game-changing results.
Pam Harper: Does this topic resonate with you? Check out related episodes to expand your perspectives and take away even more immediately actionable ideas. Just go to GrowthIgnitersRadio.com, select episode 116, and scroll down to “Resources.”
Scott Harper: And while you’re there, sign up for our weekly alert of upcoming episodes so you’ll always be up to date.
Pam Harper: Welcome back to Growth Igniters Radio with Pam Harper − that’s me − and Scott Harper. We’re talking with Karen Eber Davis about how corporate philanthropy can help you grow your business at the same time you’re doing good. You can find out more in the “Resources” section for this episode by going to GrowthIgnitersRadio.com and selecting episode 116. Karen, can you tell us how people can find out more about you and your book and the things you offer?
Karen Eber Davis: Sure. I’m at kedconsult.com, or even just Google Karen Eber Davis; It should come right up. I have an eBook that’s called Can Philanthropy Actually Help Your Bottom Line, and I’ll be providing you a link and a free copy for people for the next 30 days.
Pam Harper: It’s an excellent resource, Karen. I encourage listeners to download this through the link in the “Resources” section for this episode.
Now, let’s go back to our conversation. We were talking before the break about return on philanthropy. You have a very particular way that you look at this, and I know it starts with strategy. How does strategy fit into increasing a company’s ROP, in your experiences?
Karen Eber Davis: Strategy is the starting place. Again, we talked about this huge number opportunities to get involved; you have to be focused. Even if 1.5 million nonprofits aren’t going to call you, you could easily have two or three hundred contacting you; you might already have that. My argument on strategy is that you should “start selfish”.
Pam Harper: Start selfish?
Karen Eber Davis: What is it that you care about? What is it that would help your company?
Pam Harper: Okay. Let’s expand on that. What’s a great example of starting selfish, and being strategic about it?
Karen Eber Davis: Say that I’m looking to solve my business challenges − how can I do that in a way that also benefits the community?
Pam Harper: Okay.
Karen Eber Davis: Counter-intuitively, starting selfish is about “why I would stay in for the long term,?” Why, in the fall of time, would someone say “Of course, if they’re in this business, of course they’re helping this nonprofit.” Again, you can easily separate your personal giving and do it for totally internal reasons that you love and that have nothing to do with your business’ but if you’re doing it for the corporation, I would argue to start with your company’s needs in mind.
Pam Harper: Of course; that makes a lot of sense. Do you have a story that you can share with us about a company that did that?
Karen Eber Davis: Sure. One of my favorite stories is about Southwest Airline and a group called Opportunity Village. If you ever fly into Denver on Southwest, and if you’re coming from the east coast like me, the first thing you do is you find the bathrooms. You will notice in Denver at the airport that every employee there is maybe a little different; they’re developmentally disabled. And so what Southwest has found by working with a nonprofit is that they can have their bathrooms kept very well, but also they can support people who need jobs who wouldn’t be able to necessarily get jobs in the regular part of the world because of their disabilities. Another piece of this may appeal to people who are concerned about cleaning crew security at night. If you can work with your local nonprofit, you can often find cleaning crews who are made up of people who are developmentally disabled. What Opportunity Village has done is they create crews where one person is a star at the garbage cans and getting those cans emptied. Another person is the star of doing the vacuuming. Where that leads to is this opportunity for people to be employed; they are a low security risk, and that they love their jobs. There’s no turnover.
Pam Harper: That’s very interesting that you mention that, Karen, because so many CEOs that I’ve been speaking with talk about how difficult it is to find talent. Here you’ve, you have a company that is actually creating that talent and solving their issues of finding work, too. I mean, it’s a wonderful win-win.
Karen Eber Davis: Yes
Scott Harper: And here they are fitting the right people with the need that other people might not be attracted to.
Karen Eber Davis: Right. I mean, most of us wouldn’t want those jobs, but if you are someone who understands how important it is that garbage is collected everyday, and that’s where your skill level is, and you do that really well, you have a lot of pride, and it really helps the community.
Scott Harper: Okay; so it really takes some different thinking to create opportunities like this. What we’re talking about is innovation; applying innovation to get more return on philanthropy is another thing you talk about. Can you expand on that a little bit?
Karen Eber Davis: Sure. In this case, with the Southwest and the Opportunity Village story, that’s replicable across the country. But many times, the model you might look at, in the array of models you can choose, might be already taken. CVS, for example − if you remember, about a year and a half ago they stopped selling cigarettes. What happened is they began to see themselves as a health -encouraging organization. They lost sales from the cigarettes, but they began to increase sales in other parts of their business, which got, turned the ROI into a positive thing. But if you were Walgreens, you probably don’t want to go down the same road. You want to find a way to express your corporate philanthropy that’s fresh.
Scott Harper: Ah-ha…
Karen Eber Davis: You might want to change those snacks that sit where you check out at Walgreens or other places; “this is not so healthy.” You could put something healthy there and say, “We’re the company where you can shop with your kids and make sure they get something healthy rather than candy.”
Scott Harper: Okay, so how can companies that want to go down this route generate more innovative thinking that helps them come up with the ideas that create greater good for the company and for society?
Karen Eber Davis: First, look at the infrastructure of other successful ideas and then get with a likely nonprofit partner and move towards “How can we do this together? What stuff is here that no one has touched, where we have assets that aren’t being used?”
Pam Harper: Okay. Building on that, you also talk about what you call “smart tactics”. Can you tell us what you mean by this, and how this works into increasing that return on philanthropy?
Karen Eber Davis: Sure. You start with a strategy, which is where you want to go, your overall plan of how you’re going to tackle this opportunity. You figure out some innovative way to do it. But if you don’t do good tactics, you might be helping somebody else or, you know, or causing unintended results.
Pam Harper: Yeah.
Karen Eber Davis: Often, companies want something that is low work and low risk, and so making ways that you’re not going to suddenly open up your email tomorrow and have 500 requests from 500 nonprofits would be important. Doing that well takes a lot of tweaking and thinking about it. It’s not just the write the check and go away.
Pam Harper: Right, and of course, the other thing is that too often, at least, I’ve seen people enter into tactics because they’re easy, you know? The tactical kinds of things are easy to do; they don’t require as much thinking. Then, they have to work backwards and go “Now what was I doing this for?”
Scott Harper: You have to link the tactics to the strategy, and to to engaging the people who are actually going to pull it off. All of those things − they fit together. It takes thought and real design to do it well.
Pam Harper: And that’s what you’re saying, I assume.
Karen Eber Davis: Yeah. I [always say we all want the end result, but most of us don’t like the process. But taking the time to build a strong strategy really is the fastest way to get to the end results.
Pam Harper: Okay. We’re going to take another quick break, and when we come back, we’ll talk more with Karen Eber Davis about ways you can start exploring how to maximize your company’s return on philanthropy in this new environment. Stay with us…
Scott Harper: You’re listening to Growth Igniters Radio with Pam Harper and Scott Harper, brought to you by Business Advancement Inc. − on the web at BusinessAdvance.com. We want to thank those of you out there who’ve reviewed and rated our podcast series on iTunes so more people can find us. But sometimes, people have told us that they’re not quite sure how to do it; it’s not intuitively obvious. So I’ve created a short video that removes the mystery from the process. Go to GrowthIgnitersRadio.com and look over at the sidebar on the right of the page. You’ll see a headline “Subscribe to Growth Igniters Radio”. Click on the blue button underneath that that says “How to Review Growth Igniters Radio in iTunes”, and you’ll open up an 84-second video that shows you everything you need to know. And thanks again for helping spread the good word about our podcast.
Pam Harper: Welcome back to Growth Igniters Radio with Pam Harper and Scott Harper. We’re talking today with Karen Eber Davis about new ways for-profit companies can partner with nonprofits to grow their businesses. Karen, can you tell us again how people can download your eBook?
Karen Eber Davis: Sure. You can go to Pam and Scott’s Growth Igniters Radio spot, and that they’ll have a link for you. But if you can’t find that, you can come to my website at Karen Eber Davis, and right now it’s available. It’s also available on Amazon.
Pam Harper: Of course, you can download the eBook and find out more about Karen by going to GrowthIgnitersRadio.com, selecting episode 116, and scrolling down to “Resources”.
Now, let’s go to the immediately useful ideas section of this episode. It’s great to have great ideas, but you have to put them into action. Do you have an immediately useful idea for maximizing ROP in this new environment?
Karen Eber Davis: Okay, so one thing you can do is start with nonprofits that you know. If you’re a member of a chamber, but even better, an association that supports your business, are there any nonprofit members? They get that businesses are good partners, so they’re already kind of tuned in to the right place.
Pam Harper: They could be affiliate members, perhaps other associations?
Karen Eber Davis: Depends on how your association rules run. Maybe they just come to meetings whenever they’re allowed.
Pam Harper: So, making sure that you write those organizations down, and maybe even speak with the person who is the executive director of the association.
Karen Eber Davis: And have a coffee.
Pam Harper: Exactly.
Scott Harper: If you’re thinking strategically, of course, one of the first things is to come up with what outcome to I want to accomplish and how can I better accomplish that outcome by working in a philanthropic way or collaborating with a nonprofit.
Karen Eber Davis: Here’s a smart tactic, too. I’d have that coffee with that likely person, CEO of the nonprofit, and I would say “This is my goal, and I know it’s not the amount I give. It’s what my gift does. How can we leverage some gifts?” So, I’m also coming to the table with cash, a little bit of cash to try.
Scott Harper: Okay. The thing we were talking about earlier, about innovation and coming up with new ideas − what is a down-to-earth tactical approach that someone can take to spark innovation and get those ideas out on the table so you can begin to figure out how are we going to actually make them work?
Karen Eber Davis: Here’s a non-business, higher risk approach, okay? You’re sitting with coffee, and you say to the CEO “What is your hardest problem?” you know, “What is it that … ” They’ll say money, because that’s what a nonprofit does say, even though they’re nonprofit.
Scott Harper: Yeah.
Karen Eber Davis: But then you say “Now, what … Now, if you had money, what is it that you would do, you know, what kinds of things?” Every nonprofit seems to have something that catches them up, so you want to take that and bubble that, maybe even at that point or on the way back, and saying “How could we do something together that solves that problem or helps improve that situation for them?”
Pam Harper: Okay. Just to clarify, now you’re at the point where you’re sitting … If I’m the CEO of a for-profit company, I am going out to coffee with the CEO or the executive director of the nonprofit to ask that question?
Karen Eber Davis: Sure. Yeah, or they’re in your office. They’re happy to come and do this, believe me.
Scott Harper: All right.
Pam Harper: Right, but the idea being to go deeper, it sounds like, and not just having a superficial conversation.
Karen Eber Davis: Correct. Most nonprofits will tell you what their most appealing need is, and sometimes, the real benefit is to dig in. One company I’m working with is really working on retention, so what we’re doing is having employees work with the passion of the business owners, which is helping children. They’re finding ways that this technology could be used to help their staff recruitment, and its serving children. Is there some way that technology can solve some of the challenges to make turnover less, if that makes any sense?
Pam Harper: It does.
Karen Eber Davis: In that case, the project is more of in-kind, but it’s helping employees address a hard problem that they know benefits families.
Pam Harper: It’s so important to get to that trust level where people are being open and they’re building on a conversation instead of just the superficials. I can’t emphasize that enough. It’s easy to miss an opportunity if you say superficial.
Scott Harper: Or defensive. “I know they’re going to ask me for more money, and I don’t want to get into that…”
Karen Eber Davis: Yeah, yeah.
Pam Harper: Right. This is great, Karen. You talk about, again, the tactics, these smart tactics. What would you say is an actionable step that could help leaders bring their tactics to the next level for this purpose?
Scott Harper: …You’ve got the great idea. Now, how do you actually pull it off?
Karen Eber Davis: How can you start as simple as possible?
Pam Harper: Right.
Karen Eber Davis: Well, I think this is the “date, don’t marry” recommendation; you know, you want to try that. Many nonprofits do wonderful work, but not all of them are managed in ways that will help you do your business. One of the complaints I hear from people who are doing sponsorships, is ” After I give them the money, they disappear.”
Pam Harper: Oh my gosh.
Karen Eber Davis: So, you know. You need to do dating before you get married.
Pam Harper: Okay. Is there are first sign that things are going well and that you should keep on going? Is there a signpost that it’s okay … Or maybe it’s not?
Karen Eber Davis: Well, I think, Pam, one of the ideas I love from you is you recommend to look before you start and say “What are the things that I want minimum? What are the things I want maximum? What is a medium return, and are you seeing that?” For example, are you being part of an event where, you invite your customers, and they invite their donors, and you have this great evening? Did you leave that evening having touched 10 of your customers and meeting five people? This is not bottom line yet, but it’s signs of bottom line.
Scott Harper: It’s what we call critical success factors, so yeah.
Karen Eber Davis: Correct.
Pam Harper: That’s right. Well, it’s the milestones. It’s the checkpoints. It guides you to where you’re trying to go.
Scott Harper: Interim outcomes.
Pam Harper: That’s right. So, ultimately, what does this take us to? What are some final thoughts?
Karen Eber Davis: Meaningful business philanthropy drives success, because it means you graduated to “What’s my bigger purpose?” mindset, and you’re moving into that sphere, and you begin to say “It’s not, you know, can I make money, but can I make a difference.”
Pam Harper: I like that. Karen, thank you so much for being our guest again.
Karen Eber Davis: It was a pleasure.
Scott Harper: Thanks, Karen, and thanks to you out there for listening to Growth Igniters Radio with Pam Harper and Scott Harper. To check out resources related to today’s conversation with Karen Eber Davis, share on social media, find out about upcoming episodes, read her bio, or open a conversation with us, go to GrowthIgnitersRadio.com and select episode 116.
Pam Harper: Until next time, this is Pam Harper …
Scott Harper: And Scott Harper …
Pam Harper: … wishing you continued success, and leaving you with this question to discuss:
Scott Harper: How can we start to create more good in the world and grow our business by taking a new approach to corporate philanthropy?