If you want your company to stand out from the pack as an organization that truly gives back, starting a corporate foundation might be the right move. Many companies feel the need to give back to the community as they grow. In fact, corporations gave $16.88 billion dollars to charity in the US alone, according to 2020 data from GivingUSA Foundation.
Though many companies encourage employee volunteering or organize small charitable events like toy drives, that’s often not enough to stand out as a leader in corporate social responsibility (CSR). In addition to helping causes you care about, here are four surprising benefits to flexing your charitable arm:
Reduce employee turnover (and save money in the process!)
It’s no secret that turnover is a major problem right now. The Great Resignation is causing employees to search out new opportunities left and right. Forbes estimates that the cost of a single turnover is between 50% and 200% of that employee’s salary. Engaging in CSR is one great way to reduce that turnover rate. One study found that turnover rates of companies who engaged in CSR reduced by 25-50%! So save yourself the hassle of dealing with high turnover, with the added benefit of doing something great for your community.
Improve your employee’s performance at work
While CSR can lead to retaining staff, getting those staff directly involved in the meaningful work of a corporate foundation can also help improve their work performance. Skeptical? In Chip and Dan Heath’s book, The Power of Moments, they explore some interesting research on the topic. In this study, employees were asked if they were passionate about their work (the feeling of excitement or enthusiasm for their job) and if they felt their work was purposeful (that it contributes to others or society as a whole).
Then, researchers had the employees’ bosses rank their performance. What they found was that employees who had both passion and purpose for their work were the best performers- they were ranked in the 80th percentile by their bosses. But employees who only had passion, and no purpose or sense of meaning in their work, performed at the 20th percentile. Meanwhile, employees who had only purpose but no passion (that is, they might not like the job, but they find it meaningful) performed in the 64th percentile. So, clearly, purpose is a key point in your employees being engaged and performing well in the workplace. Getting them directly involved in the meaningful work of a corporate foundation can help them find meaning at work, even if they don’t love the job they’re in.
Stand out from the competition to potential customers and investors.
If you’re looking for a way to stand out from the crowd, a corporate foundation is a great way to do that. The statistics are clear–people care about companies doing their part to better the world, and they’re willing to put their money where their mouth is.
77% of consumers say they’re more motivated to purchase from brands that are committed to making the world a better place. And often, making a nice post on social media every once in a while is not enough. 70% of consumers agree that companies have a responsibility to improve the world through charitable or philanthropic efforts. While showing your support online is a start, for many people, making the world a better place involves a more hands-on approach. Whether you choose to create scholarship funds for kids or dedicate company money and volunteering time to helping those who are food insecure in your community, there are so many ways to get CSR right.
Investors are also growing more concerned with how a brand engages in charitable activities or philanthropy. Millennial and Gen Z investors put much more effort into understanding how companies give back than previous generations. 46% of millennial investors say they are more likely to invest in companies that are publicly engaged in making the world a better place.
Attract Media attention.
Starting a corporate foundation can be great PR for your company. We’ve explored how both consumers and investors feel about CSR, but the media attention is how they learn about your efforts. Many marketers in for-profit companies have dealt with the frustrating task of trying to attract media attention. Often, though you might be doing good work for your customers or clients, your everyday business isn’t an attractive story to a news outlet. But everyone loves a heartwarming story.
If you have a foundation that gives grants to local animal charities, for example, both the media and the charities themselves can advertise your involvement. Many organizations build recognition into their grant agreements–which allows organizations or people you provide funds for to help boost your foundation’s reach.
Corporate social responsibility is top-of-mind for many consumers, investors and employees, especially after the pandemic showed just how vulnerable many populations are. If you’re ready to start making a difference but your company wants to explore what kind of charitable foundation you’d like to start, reach out to us. We can help your foundation establish your mission, vision, and values to get your charitable endeavor started on the right foot or if you’d like help setting up your foundation legally, request a consultation with one of the attorneys at Charitable Allies.