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Got philanthropy?

Companies gain through giving

Corporate philanthropy not only helps nonprofit organizations. Businesses that give also reap many benefits, including consumer loyalty, increased corporate identity, targeted brand recognition and heightened employee morale.

Starting out

For a company wanting to further develop its philanthropic side, a good starting point is internal outreach. Forming a committee or committees with employees from all levels and aspects of a business, and discussing what interests them and what they are passionate about, is a great way to decide what causes best suit your company.

Do the employees want the company to only give money, or are they also willing to rally behind a cause and donate their time and resources? Given the budget for philanthropic activities, is it better for the company to support one organization, or can the funds and resources be extended to help several groups? These answers and other discussion points will give you a good roadmap.

Ethics

Ethical issues can come up when a company’s product or services do not align with a charity’s mission. For instance, a drug/alcohol rehab organization might not feel comfortable receiving a donation from a liquor company. However, a green products company most likely wouldn’t have a problem supporting an environmentally focused nonprofit. Carefully consider an organization’s goals in relation to your business before picking groups to support.

Research

When selecting an organization, companies should research nonprofits carefully using their tax ID number. Charity Navigator (charitynavigator.org) is a great place to start. This nonprofit website bills itself as a guide to intelligent giving.

With a simple search on the site, a company can find out how an organization spends donations, how much top executives are paid, what percentage goes to overhead versus actual programs, and other important information.

Red flags

Armed with data about an organization, a company can spot warning signs.

For example, nonprofits that spend more than 30 percent on overhead or fundraising costs, or have a CEO who is paid an exorbitant salary should be carefully vetted or avoided altogether. Another big red flag is not making Federal Tax 990 forms and audits available on their websites. Worse yet are organizations that don’t file annual 990s or don’t conduct annual audits.

Scam organizations are prevalent and exist solely to bilk funds from unsuspecting donors. Often such organizations adopt a name very similar to a legitimate organization to cause confusion. Before giving any funds, double check to be sure that you are working with a reputable group.

More than giving

It is no secret that companies give for more than purely altruistic purposes. Nonprofits understand that philanthropic pursuits are often part of a marketing program and should be willing to work with a company in defining and responding to target audiences.

Sponsorships of events are just one example of a great way for a company to support a nonprofit while gaining visibility. Smart nonprofits give corporate donors a ROI when they sponsor an event, and often times the cost of the sponsorship is less than the value -- a $20,000 sponsorship could be worth $30,000 or more.

Quid pro quo can be an acceptable practice when it comes to corporate giving. Don’t be hesitant in asking for something that can benefit both your business and the nonprofit. For example, it is never inappropriate to request a board position for a company employee. Nonprofits are always looking for board members, but keep in mind that board members must sign a conflict of interest statement and other documents declaring they are working in the best interest of the organization, not the corporation.

More than money

There are many ways for companies to be philanthropic in addition to just writing a check. Employees can volunteer for an organization or collect items for a holiday drive. Companies can provide pro bono in-kind services for which the nonprofit would normally have to pay. Consider donating your gently used computers, copy machines and office equipment. Open up your offices to host meetings or events in your board room.

As an organization whose mission is to support foster and adoptive children and families, the best thing a company could do for Walden Family Services is encourage their employees and customers to become a foster or adoptive parent. It would make a huge difference in the life of a child, and not cost the company a cent.

In San Diego, Qualcomm (Nasdaq: QCOM) is a great example of corporate philanthropy. Not only does the company give generously to the community, it matches its employees’ donations. In our case, Qualcomm offers employees $4,000 in adoption assistance, which helps to cover any costs incurred in the process.

No corporate philanthropy program is too small. Nonprofit organizations are always happy to receive support of any size. Your good works can help others, as well as benefit your employees and organization.

Stivers is the executive director of Walden Family Services, waldenfamily.org.

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