There’s no question that giving charity, especially at the corporate level, is a wonderful thing.
But with so many nonprofit groups to choose from, how can donors be sure they are giving to the right charity?
“It’s a great question,” Las Vegas Jewish Federation CEO Elliot Karp said. “And it defies necessarily simple answers.”
Indeed, choosing one or more outlets for a company’s philanthropy can prove downright bewildering at times, especially in a town like Las Vegas.
“We are a community that has a tremendously wide breadth of different types of community organizations and charities,” said Cara Roberts, senior director of communications for the Las Vegas Chamber of Commerce. “There is a wide range of types of organizations to which to give here.”
A good first question to ask when choosing which charity to support is the same question to ask when picking a career.
“The first thing has to be, what are you passionate about?” Karp said. “Second is, what are your objectives, both personally and businesswise, that will dovetail off of your passion? In addition, does it make sense in terms of your charitable giving? Is it something that is, in some fashion, simpatico with your business objectives?”
Roberts agreed.
“Many businesses choose something that the owners or employees are passionate about, yet may potentially be something that would gel with their type of business or their customer base,” she said. “Or perhaps something that is located in the neighborhood in which they do business with a population friendly to their product or service.”
A company located in an area with lots of homeless people, for example, could connect with a soup kitchen. Or a firm whose founder’s passion is helping seniors can support an organization that provides wheelchairs or oxygen tanks to clients.
“If you are a landscaper, you may want to do something that is environmentally oriented,” Karp suggested.
Or “your objectives both personally and professionally could be different,” he said. “You could say, ‘I’m a landscaper, but I care about kids.’”
The experts suggest choosing an area of philanthropy in which you can make a real difference. Seeing results can motivate a person to do more.
Donors also should consider who will benefit from their giving.
“When it comes to philanthropy, people give to people.” Karp said. “Who are the people who are important to you, personally and in your business? That should be one of the factors that you evaluate.”
Moreover, giving is often contagious. Your good deed could inspire others to give back.
“If you call me up and say, ‘I really care about X,Y and Z,’ I’ll say, ‘You know what, I think that’s great.’ It’s not really my cause, but because you picked up the phone and asked me, I’m going to help you,” Karp said.
Do Your Homework
A little research goes a long way in philanthropy.
“The most important thing to consider is you need to fully vet the charity,” said Ryan Mathews, founder and CEO of Black Monk Consulting, a Royal Oak, Mich., strategic planning and communications consultancy group that works with businesses and nonprofit groups. “You need to know whom it is that you’re giving money to and what it is they do with the money. You want to then make sure that whatever the use of that funding is is consistent with your brand and your corporate values.”
“You’ve got to do your due diligence,” Karp added. “First and foremost, you go online. There are lots of websites that will tell you whether or not a charitable organization is a 501(c)(3) (tax-exempt organization). There are also sites that will tell you the relative efficiency of a charity. Of every dollar they raise, how much is being spent on overhead and how much to program and services?”
Research is particularly important if a company or business owner plans to ask employees or customers to take part in giving. Organizations such as the United Way can help, as they vet groups and provide information about how donations are spent.
Mathews noted the flap that occurred earlier this year when the Susan G. Komen for the Cure foundation decided to stop giving grants to Planned Parenthood because Congress was investigating charges the group used federal money for abortions. The foundation later reversed course after an outcry from the public.
“It illustrates how you can get jammed up easily as a corporate donor,” Mathews said.
Mathews said he is shocked that most donors don’t do a better job investigating charities.
“Whatever donations they make should be consistent with whoever they are,” he said.
Part of that should involve looking at the ratio of administrative costs to actual charitable payouts.
“You obviously want to always be in a position where the greatest proportion of your money actually goes to recipients and not to build someone a new headquarters,” Mathews said.
And while charity ideally won’t be given with the goal of helping a business increase sales or gain a competitive advantage, the reality is that benefits do accrue for companies that choose well.
“There are certainly customers who may look at what a company or business is supporting and how they’re choosing their charities,” Roberts said. “There is definitely good public relations to be gleaned if you are in a position to help your community.”
Deciding how much to give is a key component.
“What is it you want to do on an annual basis?” Karp asked. “How much can you afford, and how should you apportion it? Do you want to give one cause all your money? Do you want to pick 10 causes and give them each 10 percent?”
Beyond Charity
Charity doesn’t have to involve money, either. Time and expertise can be equally valuable, the experts said.
“Some people like to say, ‘I can’t give money, but I can give you my time,’” Karp said. “Others say, ‘You know what, I don’t have any time, but I’ll give you money.’ It’s what we in philanthropy call the ‘Three W’s’ – wealth, wisdom and work.”
And philanthropy can be as simple as being a good company in general. That’s the argument authors Watts Wacker and Jim Taylor make in their book, “The Visionary’s Handbook: Nine Paradoxes That Will Shape the Future of Your Business.”
“Giving to charity isn’t the issue anymore,” Wacker said. “What’s coming about is what I call the ‘Goodness Business Model.’ It’s not corporate giveaway. It’s not cause-related marketing. It’s do right and do well.”
Case in point: In late June, the Panera Bread Foundation opened its fourth nonprofit community café, Panera Cares, in Chicago. The menu has no set prices. Customers pay what they can afford or work in exchange for food.
“It’s not about charity anymore,” Wacker said. “It’s about goodness as a business model.”