It Does The Business Good

Philanthropy could help your family as much as it benefits others.

The first bullet point on Fleeger's Pro Hardware's mission statement, "We strive to have relationships that are open, truthful, understanding, courteous and loyal with each other, our customers and our community," telegraphs a great deal about the company's commitment to its community-and offers a tangible goal that all family businesses would be wise to reach for.

Fleeger's Pro Hardware, a 55-year-old family-owned hardware store in Toledo, Ohio, has articulated what family firms know almost instinctively: Family businesses are different; as such, relationships with their communities are critically important. "Community relations is not just part of their job-it's fundamental to their existence," says Craig Aronoff, director of the Cox Family Enterprise Center at Kennesaw State University in Marietta, Georgia.

Family businesses' emotional commitments to their communities stem from their longevity. Parents, grandparents and the present generation typically live in the community or in one nearby. If everything goes according to plan, future generations will stay in the area as well. That longevity creates a connection with the public that family businesses can't afford to ignore. In an age when competition is fierce-and more far-reaching than ever, thanks to the Internet-family businesses need to seize the opportunity to create the deeper bonds with their customers that local involvement offers.

Family businesses often contribute money to their communities via family foundations, where members work together on projects that will have an impact on the area. Their contributions to such worthwhile causes and organizations are made for a variety of reasons-to gain personal satisfaction, to support philosophical and religious beliefs, to memorialize the lives of loved ones, or to affirm their values and act as role models for subsequent generations.

Some foundations are also set up so individual members have funds to distribute among causes in which they have individual interests. The impact of such giving is enormous.

"Because of their high profiles in the community, family members also have a tremendous amount of power and influence," says Ellen Remmer, director of the family practice of The Philanthropic Initiative, a consulting firm in Boston. "They draw attention to the issues they're supporting, and they're able to build bridges between unlikely parties," she says. For example, if a family law firm decides it wants to do something about domestic violence, it can exert its influence in numerous ways. "In addition to donating money to nonprofits that help victims and offer legal serv-ices on a pro bono basis, the company could provide office space for advocates and play a role in convening conferences on the subject," explains Remmer. "And their involvement will attract other people and money to the issue."

David K. Welles Jr., chair and CEO of Therma-Tru Corp., a residential entry door manufacturer and family business in Maumee, Ohio, adds: "Of course you want to live in a nice community and be one of the positive forces of change in it. All the family members who are shareholders in our business, and that's roughly 30, know how important community involvement is, and they're proud the company is part of it. I haven't ever heard anyone complain that our philanthropy was eating into their dividends." Aronoff and Remmer point to several positive effects of community involvement:

It's a powerful way to pass family values from one generation to another.

It develops family cohesiveness, especially when relatives are working together on meaningful projects that accommodate each generation's interests.

It promotes fairness. When working together on a project, authority isn't hierarchical. Generations relate to each other in a way that allows power sharing among them.

It prepares the upcoming generation for its stewardship role-in the family business as well as in the community.

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This article was originally published in the April 2001 print edition of Entrepreneur with the headline: It Does The Business Good.

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