Social business, Part 3: Philanthropy adds value for companies

By Todd Cohen

DonorsChoose.org, which operates a website that lets public school teachers post their needs for supplies and educational experiences, and lets donors make contributions to buy those resources, asked Crate and Barrel if it would distribute a philanthropic gift card to its customers, who could redeem it by buying supplies for teachers.

The Chicago-based retailer agreed to distribute $25 DonorsChoose cards to 18,000 of its best customers in Chicago and New York.

A study by Rabin Research that the company commissioned found that a control group of Crate and Barrel customers who redeemed the cards spent 16 percent more at the retailer over the next six months than customers who did not receive the cards, and customers who received the cards but did not redeem them spent 5 percent more than customers who did not receive the cards.

While DonorsChoose.org paid for the initial batch of cards, Crate and Barrel went on to distribute over 1.1 million cards and has dedicated 4 percent of its corporate advertising budget to the program, while DonorsChoose.org has expanded the program to hundreds of corporate partners, said Janelle Lin, vice president for partnerships and business development for the New York City-based nonprofit.

DonorsChoose.org has set itself the goal of enlisting 1 million people to support $100 million in classroom projects at 100 percent of high-need public schools in the U.S.

“With this huge goal, the only way we can reach as many people or fundraise that much money to go to classroom projects is through our corporate partners,” Lin explained.

Institutional partners drive nearly two-thirds of fundraising at the nonprofit, which raised $40 million in the fiscal year ended June 30, 2012, she said.

And the cause marketing partnerships deliver value that corporations are looking for, she said, including heightened brand and customer loyalty, increased visibility through the nonprofit’s website, and engagement of their employees.

“Big Four” firm PricewaterhouseCoopers, for example, distributes the card to all of its 37,000 employees, Lin said.

“A lot of times, nonprofits feel they’re asking for a handout and the company is doing a charitable favor by giving them money,” she said. “If nonprofits can identify the ways they can help a company, it’s a two-way street.”

In recruiting on college campuses, companies want to appeal to the “millennial generation that wants the social mission,” said Lin, a graduate of Harvard Business School who enrolled there intending to pursue nonprofit work.

“The millennial generation is looking for it all,” she explained. “They want a job where they can be paid well, have a lot of flexibility, and feel like they’re doing social good. That’s a new component that did not exist even when I was in grad school eight years ago.”

Shannon Schuyler, corporate responsibility leader for PricewaterhouseCoopers, said the professional services firm, which employs roughly 37,000 people in the U.S. and hires about 5,000 college graduates a year, distributes roughly 102,000 DonorsChoose gift cards a year to its employers, partners, new hires and others, including 65,000 to students it talks to on recruiting visits to campuses.

In a competitive marketplace, college grads “look for what really differentiates an organization,” she explained.

PricewaterhouseCoopers has a corporate culture that encourages employees to give their time, money and expertise, a factor that can be considered in the evaluation of employee performance, she said.

That culture of giving, she said, “engages people to be part of something bigger than themselves, and that engagement helps to drive their satisfaction, which helps to increase their quality of work and ultimately is able to position the firm as something greater than all the 37,000 different individuals,” whose average age is 27.

Next: Nonprofit build corporate partnerships from ground up

The series:

Part 1: Companies team with causes to add value

Part 2: Companies build giving into business strategy

Part 3: Philanthropy adds value for companies

Part 4: Nonprofit builds corporate partnerships from ground up

Part 5: Company works with nonprofit to build markets

Part 6: Companies turn to nonprofits to help develop leaders

Part 7: Nonprofits tap corporate expertise

Part 8: Company teams with nonprofit to solve social problems

Part 9: Nonprofits work with companies to help find business solutions

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Social business, Part 1: Companies team with causes to add value

By Todd Cohen

Looking for an alternative to dumping unsold inventory in landfills or paying to have returns sent back to a distribution center, The Home Depot formed a partnership with Good360, a nonprofit that distributes new product donations to nonprofits.

The American Red Cross, wanting to improve its delivery of supplies to regions hit by disasters, teamed up with FedEx for its expertise and assistance with shipping, logistics, supply-chain strategy and warehousing.

And DonorsChoose.org, hoping to find an innovative way to invest $1 million it had won through a contest sponsored by online retailer Amazon, developed and funded a charity gift card that Crate and Barrel agreed to distribute to its top customers.

Corporate social responsibility is hot. Facing rising expectations from their customers, employees, investors and vendors to improve their efficiency and bottom line in a marketplace that has grown fiercely competitive since the capital markets collapsed four-and-a-half years ago, corporations increasingly are moving beyond traditional philanthropy to make a social and environmental impact, voluntarily disclose what they are doing to be good corporate citizens, and promoting their social investment.

CSRwire, a service that distributes news releases, reports and other materials about corporate social responsibility, now has over 8,000 members, up from 117 10 years ago, with roughly 1 million readers a month and about 20,000 pieces of content on its website.

“We like to think it’s mission driven,” said Jack Wysocki, vice president of business development for CSRwire, which is based in Springfield, Mass. “But in all actuality, the large corporations are realizing that corporate social responsibility is good for the bottom line.”

A study last year by two management professors at the University of California at Davis found that companies saw big increases in their stock prices within days of distributing corporate social responsibility news releases through CSRwire, Wysocki said.

Companies also have become more strategic about their philanthropy, developing relationships with nonprofits designed to make a greater impact on social and global problems.

“Companies are looking for sources of competitiveness for the business, and realizing one way business can grow is by solving social problems,” said Talya Bosch, vice president for social ventures at Western Union.

Janelle Lin, vice president for partnerships and business development at DonorsChoose.org, explained that, when associated with a cause, a company “can stand out from the clutter and really rally the passion of their consumer base to drive loyalty.”

So in looking for corporate partners, experts said, a nonprofit should try to identify business challenges it can help companies address, as well as the value companies can add to its own organization.

Next: Companies build giving into business strategy

The series:

Part 1: Companies team with causes to add value

Part 2: Companies build giving into business strategy

Part 3: Philanthropy adds value for companies

Part 4: Nonprofit builds corporate partnerships from ground up

Part 5: Company works with nonprofit to build markets

Part 6: Companies turn to nonprofits to help develop leaders

Part 7: Nonprofits tap corporate expertise

Part 8: Company teams with nonprofit to solve social problems

Part 9: Nonprofits work with companies to help find business solutions