Want to make more money, give more away!
Philanthropy is part of who I am and I can tell you that there is no greater feeling, no greater satisfaction, than knowing you’re making a difference. But giving back to your community is also good for your business. While giving back should not come with the expectations of a return, it is however the collateral affects, such as acquiring customers who embrace your cause, which you cannot control.
Philanthropy helps build relationships with clients and potential clients. It helps build and support your brand and it promotes employee engagement. And, let’s face it: good corporate citizens want to do business with others who share their values of giving back to the community.
Entrepreneur.com says: “Think of the NFL and the United Way”. The NFL has done a great job associating itself and the players with a charitable organization that does good work for communities throughout the country. It makes you feel good when you see a player giving back to his community. In other words, the act of giving back evokes emotions and fosters connections with people of like minds.
So how does giving back help your bottom line? A Harvard study on 30,000 American families discovered a family giving $100 more to charity earns about $375 more income than a non-giving family who is similar in every other factor. For every dollar they give, they earn nearly $4 more. That’s four times more or an 80:20 ratio to be exact. In giving we receive or is it simply that people who have more are able to give more? In my experience, it tends to be the opposite.
Entrepreneurs tend to be more generous than most. On the average, entrepreneurs give 2.53 percent of their gross profit, versus 1.27 percent for everyone else. Entrepreneurs give more in every income bracket, according to a study of IRS data by the Center for Data Analysis and the Heritage Foundation.
Now let’s talk about how Philanthropy makes a difference in your business.
Philanthropy Maximizes Both Happiness and Impact.
According to Psychology Today, giving is a state of mind. Frankly I prefer the “warm glow” associated with giving as I feel it is a better emotional state to be in. Psychological studies show that giving makes people feel good when they “do the right thing” (Dawes & Thaler, 1988). And then there is the pleasurable feeling of moral satisfaction. Giving enhances the desire to view oneself as compassionate and kind. On the other hand, not donating when we think we should can lead to guilt and harm one’s self-image.
Another aspect of giving is that it leads to your own happiness. If you are happy it very well may translate into bigger success in your business. If you want to have a productive business, if you want to be a productive person, work on your happiness. Giving to charity doesn’t just help the causes being supported, it also helps the givers by making them happier and improving their self-esteem. As such, giving to charity can have positive effects on your business and overall well-being.
Philanthropy as a core value of your company promotes employee engagement. It infuses passion in those around you. It gives employees more energy and drive and after all who doesn’t want to be a part of something bigger then themselves. When employees feel their work is having a lasting impact in the community, it gives added value to their work and becomes part of their reality. Connecting philanthropic initiatives with the mission of the company is vital to maximizing the benefit of charitable giving.
Building Your Brand
Today there is a resurgence of entrepreneurial start-up’s making for a hyper-competitive business environment. Along with the entrepreneurial upwelling there is a significant increase of new non-profits that have entered the marketplace. A study by the National Center for Charitable Statistics says that there are 1.5 million nonprofits registered in the U.S. and they are worth $887.3 Billion to US Economy. That’s 5.4% of the nation’s gross domestic product (GDP).
Customers are at the core of your business and whether you realize it or not, your business has an unwritten social contract with the community you work in. The key to running a successful business is meeting your customers’ needs. Companies focus enormous amounts of resources on customer service and improving their customer’s experience. Philanthropy initiatives lead to greater customer engagement by making the connection between your company, the customer experience, and the community needs. Like your employees, customers want to feel good about the companies they interact with. By showing your customers that you care about more than just selling your products, you end up with a more loyal customer base and a stronger bond with the community.
“Business leaders, like yourself, are taught to make decisions based on hard data not their feelings.” (Frontsteam) Customers on the other hand many times make decisions based on emotion. The reality is that people are not robots and most customers make decisions based on their state of mind. Positive emotions like empathy, inspiration and passion can drive customers to make a stronger more lasting connection with your brand. A well-executed corporate philanthropy program can resonate with your customers on a deeply emotional level that goes far beyond even the most creative advertising campaign. Knowing that your company is working to be a good corporate citizen makes customers feel better about choosing to buy your products.
To sum it all up; it’s time to get off your can-goods and get involved. When you give back to your community, it comes back to you, remember the 80:20 rule. Keep in mind that you have a social contract with your community to help make it a better place to live. And while you are doing that, you may just find yourself happier, your employees more energized and your customers more loyal. So if you want more money, give more away.
By Ralph Wolff, PSA, Jersey Coast Appliance