Why Doing Good for Others Does Good for Your Business The sooner you incorporate social good into your business plan, the better.
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When Monica Royer decided to launch her online baby clothing boutique, Monica + Andy, last November, she immediately sought to align the company with organizations that benefit infants and children. For her first fashion show, she partnered with the Chicago-based organization More than Milk -- that provides opportunities for moms and their families to participate in charitable activities with a variety of local organizations. Royer also partnered with the Little Giraffe Foundation, a local organization that funds neonatal research and supports families in the NICU.
"We always had a vision for working with charities," says Royer. "As moms ourselves, we felt passionate about reaching out into our community and other communities across the country to help children and families."
Monica + Andy is an example of the latest trend in new businesses who are seeking to align their corporate mission statement with philanthropic goals. Jamie Jaffee, managing partner at The Philanthropic Initiative – a non-profit consulting firm that advises corporations on how to get the greatest impact from their charitable dollars – says she's seen an increase in small businesses embracing social entrepreneurship and argues those that incorporate philanthropy into their company's business plans in the early stages reap the greatest rewards including higher employee satisfaction, recruitment and retention, job performance and customer loyalty.
Employee engagement. "When employees feel their work is having a lasting impact in the community, it gives added value to their work," says Jaffee. While in the past, corporate philanthropy typically consisted of annual "done in a day" events such as community cleanups and seasonal giving drives, companies looking to maximize the impact of their corporate giving dollars are taking a 360 view of the organization and aligning philanthropy with the year-round goals of the company. Connecting philanthropic initiatives with the mission of the company is key to maximizing the benefit of charitable giving. "When employees are doing well in the community in an area that they're experienced in, it's even that more dynamic and meaningful for the individual and the company," says Jaffee. Infant clothing retailer Monica + Andy's alignment with charities that support infants gives greater meaning to their work than participating in a one-day tree planting day would.
Recruitment and Retention. Generation X'ers and Millennials have brought new demands to the workplace. Volunteering and charitable giving "is no longer perceived as something you do after you've worked and when you've retired. Young people … want to be connected to the community. Giving back is part of their authenticity," says Jaffee. Not only are Millennials and Gen X-ers pursuing volunteer activities outside of work, they're demanding them from their workplaces as well. A 2013 Deloitte Volunteer IMPACT survey showed 62% of employees felt more positively about an organization that encourages volunteerism, and recent research from PricewaterhouseCoopers showed a whopping 90% of recent graduates seek employers whose corporate responsibility behavior reflects their own.
Improve Job Performance. It's no secret that boosting employee morale results in better job performance. Whether providing employees with an opportunity to volunteer for their own causes during work hours, or participating in activities as a team, getting involved in the community can provide leadership and learning opportunities which can result in the development of new skills and ultimately lead to a more successful workforce. While some employers may worry that involvement in philanthropic initiatives will distract from work goals, Jaffee says the opposite is true. "Employees become more driven and more productive," she says.
Build relationships with customers. Engaging in philanthropic initiatives can improve how the company is perceived by the community and build relationships with customers. A recent report conducted by the European School of Management and Technology found that philanthropic initiatives helped serve as ice breakers and points of conversation between front line employees and customers.