• How Corporate Phlanthropy Improves Corporate Profits      

    by Bill Ballas                                            

    by Bill Ballas

     

    Earlier this week I attended an informative luncheon hosted by the AFP Silicon Valley Chapter.  It was so fascinating I felt compelled me to write this entry for my friends and clients in the corporate and not-for-profit sectors. 

     

    The featured speaker was Jacquelline Fuller, Google’s Managing Director of Global Giving (www.google.org).  Her presentation, “Why Google Gives,” was focused on sharing Google’s grant opportunities and hints for submitting a successful application.    

     

    Between taking notes, I was reminded of a study that showed for every $1 the average corporation gave to charity, it should see its profits grow by $2 to $3.  The research was published by Lev, Petrovist, Radhakrishnan (2007), and it analyzed the corporate donations of 251 major companies for 2005. 

     

    For details on this research project and their more recent work on the topic, copy and paste the following link in your web browser: http://blogs.law.harvard.edu/corpgov/2011/08/20/making-the-business-case-for-corporate-philanthropy/

     

    In the meantime, their other findings were:

     

    • The top 251 corporations donated $14b in cash and goods (44% of donations)

    • The top 251 corporations averaged donating 10 cents for every $100 of net sales revenue

    • The top 15 corporations donated $1.6b cash, and $4.5b in goods

    • For every $1 given to charity, the average company should expect profit to rise between $2 and $3

    • Most corporations do not take full advantage of corporate philanthropy as a business tool.

     

    It seems that when corporations properly promote their charitable activities, they attract new customers, strengthen consumer loyalty, improve staff retention, and build an esprit de corps among their employees.  This is quite a return on an investment of 1/10th of 1% on net sales revenue!

     

    Google seems like an exemplary corporate citizen – not just for the $100 million it donates annually – but also for the time and talent their 30,000 employees give to not-for-profits.  The aggregate value Google’s contribution to philanthropy is enormous.

     

    While some marketers argue that corporate philanthropy is wasteful or a “tax” levied on shareholders, others ask, “If a company doesn’t support the community in which its employees and customers live and work, why should consumers support the business?”  After all, corporate philanthropy is good business for everyone. 

     

    If you want more proof, do a google search on “corporate + giving + enhances + profits" and see other study results.

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  • Is Tim Cook Crazy Or Brilliant?

    by Bill Ballas

     

    by Bill Ballas

     

    If you made it this far, you’ve noticed several quotes on this website.  Each comment represents my view as to best marketing or fund development practices. In fact, Peter Drucker’s words that ". . . business has only two basic functions: marketing and innovation,” informed WSB’s positioning statement: “Innovate. Market. Repeat.” 

    My intent is to make this space useful to you, so I will also share the musings from thought leaders whose words provide insight and inspiration.  So, let’s begin.

    Have you noticed that major corporations such as Apple, Google, and PepsiCo are now planning their marketing strategy “from the inside out” just as not-for-profit organizations do?  The reason is these companies believe their mission gives them a powerful competitive advantage.  As Apple’s Tim Cook remarked last summer, “We do things because they are just and right. We are committed to advancing humanity.” 

    As Mr. Cook and leaders of not-for-profit organizations know, an “inside-out” strategy is idealistic, practical and strategic.

    So why do so many businesses have mission statements to the effect of, “Our mission is to build the world’s best widgets.”  (Note to readers: You know that is not a mission statement, right?)   

    And why do many not-for-profits have equally obtuse mission statements whose focus is on outputs rather than outcomes? 

    Whether an organization is for-profit or a charity, if their mission statements are fuzzy, then so are their brands.  

    I believe Cook’s statement is brilliant and strategic.  He is using Apple’s purpose (“advancing humanity”) to differentiate Apple and unlock societal value – something the world’s wealthiest company finds great worth in doing.   

    Over the years it has been my good fortune to work with corporate and not-for-profit clients to create an “inside out” mission statement through "Reimagining Exercises."   Each of them found the process valuable, and often in unexpected ways related to employee retention and morale.  

    Tell me what you think.  Do you believe Apple’s purpose will drive future profits for them?

     



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