Corporate giving is a key metric and a vital component of an effective Corporate Social Responsibility program. This is particularly true for businesses in energy exploration and production because of the heightened public scrutiny their operating methods receive. Strategic corporate giving goes beyond making a donation. It is an investment. Helping build vibrant, healthy and safe communities in which a company operates is foundational to securing and maintaining that always-important social license to operate. An effective giving program also enhances a company’s overall position and brand awareness. This, in turn, supports employee recruitment and retention, attracts and retains investors, makes it easier to enter other markets, and creates goodwill a company may need in times of difficulty.
For the purposes of this article, “corporate giving” is an umbrella term that incorporates, one, giving to enhance the community for a direct business value, and two, charitable giving or philanthropy. Corporate giving takes place in two distinct geographic areas: the communities in which companies have operations and the community in which the corporate office is located. Companies often focus on the former and forget the latter – they forget their administrative employees are also part of the community. By neglecting their ‘home turf,’ businesses can miss out on the opportunity to deploy ambassadors—employees—to fully demonstrate a company’s commitment to the greater good.
The elements of an effective corporate giving program include:
1. Company Perception – Before launching a giving program, executives need to understand how the company is perceived and confirm its reputation and overall position in the market. This can be accomplished through a variety of research tools that can be formal, such as quantitative polls or facilitated focus groups, or informal, such as conversations with community leaders. This research will help determine if the perceptions of the company’s target audiences are in alignment with the position or reputation company executives desire. These audiences can include customers, investors, employees, community leaders elected and non-elected, and perhaps the broader community. Each will view the company’s giving efforts in a different way. Taking these perspectives into consideration is essential to creating an effective corporate giving program.
2. Community Needs – It’s important for executives to determine what issues are important to the company’s target audiences. Traditionally these might include education, health and wellness, infrastructure, community development, or arts and culture. This analysis is important for developing a giving strategy that will be appreciated by the community.
3. Synergy – What impact does the business want to have in the community? Combining this with areas that are important and of interest to the company, leaders can then compare their interests with those of the broader community or specific target audiences. Where is the alignment? An effective giving plan must balance the need to support target audience issues and the priorities of the company. This does not preclude giving to organizations or issues that are a high priority to the company but not necessarily to a key audience. It is important to note that donations to support industry-wide issues or educational outreach programs should not be considered a part of the giving program.
4. How Much to Give – A company should identify an annual giving budget and prioritize the issues and organizations that are most important so they get the lion’s share of available funding. To help determine how much funding each organization might receive, consider the opportunities each donation gives the company for positioning, brand extension, relationship building and employee engagement.
5. It’s More Than Writing a Check – To maximize any monetary contribution, a company should actively support volunteer leadership, like board service and employee volunteer time. A giving program provides opportunities for not only relationship building but also the chance to be active in the community “on the ground.” This helps to humanize the company, which in turn helps build trust, support and credibility. This is especially important in rural communities.
6. Long-term Commitments – In order to build stronger relationships and have maximum impact, it is wise to make long-term commitments in your key giving areas. Long-term commitments are an excellent way to create a lasting effect on the organization and community. They also demonstrate the company’s commitment to helping the local community over the long-term, which helps build community trust and support. Many communities, especially those experiencing energy booms, have experienced energy busts. Quick exits by companies can leave community residents and leaders wary of new developments. If you’re making a significant financial investment in operations in a community, have that reflected in your corporate giving.
7. One-time Donations – Sometimes one-time gifts make strategic sense. A common example is buying a premium table at a fundraiser. When purchasing a table or getting one as a sponsor of an event, determine who will be at the table before you make the commitment. Too many businesses lose relationship-building opportunities by not thinking ahead.
8. Measurement – For each gift, identify a metric to determine impact or success. Those metrics can include specific milestones for a program, number of people served in a given time, defined community improvement, additional funds raised, number of employees engaged, etc. It is also wise to circle back to the first element —determining how the company is perceived —every few years to measure the effect a corporate giving program is having on reputation.
Finally, if a corporate giving program is going to support the company’s commitment to Corporate Social Responsibility then it needs to reflect the character and ethical standards of the company. It should demonstrate the commitment the company is making to run a successful business that provides a safe and productive workplace, is respectful of all people, demonstrates good stewardship of the land and resources, and is a valuable addition to the communities in which it operates.
Being strategic in giving reaps rewards for the company and the community. Maintaining a license to operate is critical for companies in all aspects of energy production and development. By being smart in its corporate giving, a company can ensure the support of its communities for many years to come.
Jeffrey P. Julin is the President of MGA Communications. To learn more about MGA Communications click here.