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Cynder Sinclair: Best Practices and Pathways to Successful Corporate Philanthropy

[Noozhawk’s note: This article has been updated with additional information.]

Leaders from small business to large corporations are trying their hand at corporate social responsibility. Some are a little unsure about what CSR is, whether it helps boost the bottom line or just something to make you feel good about giving back. Others have jumped on the CSR bandwagon and, seeing its multifaceted value, have created foundations with full-blown strategic corporate giving plans. Many of those who embrace CSR are finding that a well-thought out philanthropy plan brings their company higher visibility, increased customers and more effective branding. It’s also a great employee retention tool, creating increased morale, pride and higher productivity.

More than 100 business leaders convened at Fess Parker’s DoubleTree Resort last week to hear from three representatives of companies known for setting the bar high with their corporate philanthropy practices. The expert panel included Eduardo Cetlin, director of corporate philanthropy of Amgen; Wendy Hawkins, executive director of the Intel Foundation; and Sara Miller McCune, founder of Sage Publications and the McCune Foundation.

Ron Gallo, president and CEO of the Santa Barbara Foundation, welcomed everyone to the April 10 event and introduced Peter Karoff, founder of The Philanthropic Initiative.

The Corporate Philanthropy Roundtable, an affiliate of the Santa Barbara Foundation, sponsored the event. Karoff, an acclaimed expert in the art and science of philanthropy, facilitated a robust discussion with the panelists and audience. What follows is a summary of comments from panelists.

The Key to Business Success

Karoff noted successful businesses today include a clear CPR program in their business strategy. Making philanthropy more systemic in their business models is the key to success. Intel said CSR must intentionally evolve within the company culture. Intel Foundation went from giving $1 million in 1990 to more than $110 million in 2013, in the process learning how to say no to some requests to sponsor events. Intel favors more strategic forms of philanthropy that build the company’s reputation and extend its brand. Leaders of nonprofit organizations are wise to work closely with businesses to create CSR opportunities that strategically support company goals rather than just add to the nonprofit’s revenue. This means they must take the time to get to know the company and its business model to identify ways they can add value.

SAGE Publications gives its donations to programs related to education, using employee involvement in its U.S. and United Kingdom giving. However, corporate priorities are still largely determined by senior executives based on input from employees and managers, as well as executive teams in the United States and overseas. The McCune Foundation priorities are determined by its directors (including family representatives, social scientists and corporate representatives — since much of the funding comes from SAGE). The focus is on building and enhancing social capital as a route to long-term social change.

At more than $250 million in sales, SAGE will celebrate its 50th anniversary in two years. The company also matches employee donations to nonprofits. Over the last 10 years, SAGE has increased its donations to more than $8 million from $600,000. As the company’s focus has been narrowed to education, Miller McCune’s personal giving has shifted to include the performing arts and causes related to her personal values, religion and longtime interests.

What to Do First

Creating a philanthropic foundation can be daunting. Amgen established its philanthropy program by looking inward first — building a governance structure, setting policies and procedures, and establishing clear processes for strategic philanthropy. For the first four years, company officials worked on developing strategic signature programs to reflect Amgen’s high value for scientific innovation to inspire the next generation of scientists. Amgen found its strategic priority and resisted temptation to say yes to all donation requests, focusing instead on its priority. Since most businesses are inundated with requests for charitable gifts, clearly defining the causes and organizations that fit their strategic priority is critical.

What Motivates Businesses

Sometimes making the case for CSR to top management can be challenging. Intel appeals to the heart and the head of colleagues and executive management. Amgen uses data and bench-marking industry practices when influencing top management by researching best practices of other businesses in the same field. Five percent to 10 percent of project budgets is used for evaluation to show the impact of funded programs and initiatives. Nowadays nonprofits are adept at gathering data to support the impact of their programs; however, it’s important to remember that even corporate executives respond to heartfelt anecdotes.

Sometimes the sheer size of societal problems can be overwhelming. McCune depends on following a clear set of guidelines to build social capital for social change. Being strategic in the approach to programs and using formal and informal evaluations help provide clarity in identifying project outcomes. If a business includes corporate social responsibility as an integral part of its business plan, it’s less likely to be overwhelmed by community issues and charitable requests and more likely to be seen as adding value to the community through its CSR.

How to Measure Outcomes

Measuring outcomes of charitable gifts and nonprofit programs is becoming more common. Intel tries to find a balance between evaluation and measurement. Businesses understandably want to know that their donations are being effective; however, sometimes measuring outcomes can be time-consuming and expensive for nonprofits. Outcome measurement may actually result in measuring things that are easily measured but not important to impact. Intel prefers to use research from others to identify leading indicators that point to success and best practices and then measure the nonprofit against those best practices. For major programs, Amgen establishes evaluation questions at the outset rather than after a program is completed; pre and post surveys are then used to assess progress.

Some businesses are reluctant to publically tout their good work for fear it may sound self-serving. Intel advised that nonprofits and media tell the story rather than the business. Philanthropy should be connected to the business strategy to add real value to civil society rather than just to enhance the bottom line of the business. McCune agreed that people will notice a company’s good work. She advised businesses to contribute because of the way it makes them feel inside.

Getting Started

Even though the three expert panelists all have charitable foundations, a business doesn’t have to create a foundation to have corporate social responsibility. Businesses can work with the Santa Barbara Foundation and its donor-advised funds program to create an impactful philanthropy program. In addition, businesses should remember that they have an entire portfolio of assets at their disposal to use for the benefit of nonprofits, not just financial contributions.

— Cynder Sinclair, Ph.D., is a local consultant to nonprofits and founder and CEO of Nonprofit Kinect. She can be contacted at 805.689.2137, or .(JavaScript must be enabled to view this email address). The opinions expressed are her own.

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