A View from Blue Grotto

Tuesday, April 20, 2010

From barista to venture capitalist, what's your company's giving strategy?

I came across a slightly dated (May 2007), but interesting report from the Center on Philanthropy at Indiana University. Target Corp commissioned the report to find out more about innovations and best practices in corporations’ support for nonprofits.

The fairly short list of companies that were interviewed for the study included: Boeing, Cisco Systems, General Mills, IBM, Levi Strauss, Proctor & Gamble, Starbucks, Target, Toyota, and Wachovia.

Companies I assume have strong corporate giving programs would be Target (think 5% back to your local school), Starbucks (one of the most prolific values-driven companies on the planet), and General Mills (one of Minnesota’s early members of the “5% Club” – contributing 5% of their pre-tax income through philanthropy).

I was eager to learn more about the giving strategies of companies like Cisco and Levi Strauss. And I couldn’t help but think about how the corporate social responsibility strategies of Toyota and Wachovia must have changed since the report’s 2007 date. Yikes.

The kickoff sentence of the overview is especially appropriate: “In the last two decades, corporate giving has gone through a transformation from an afterthought directed by a CEO’s preferences to professional staff with strategic objectives.” I think it’s safe to say that in the last two years, corporate giving has gone through a transformation. With the economic stall out, companies are forced to be more strategic than ever about their community dollars. And I don’t mean just how well community outreach boosts their image. According to the report, companies are more thoughtful, more purposeful, and are looking for results.

Two criteria that stand out for me: 1) companies are looking for greater employee development opportunities in their nonprofit partnerships – giving employees and their families a chance to engage with an employer on a different level, and 2) corporate giving programs have shown a direct positive impact on sales for consumer driven companies – customers are taking note.

The full report is a little wonky, but a relatively quick read, even at 42 pages (1 ½ inch margins all around). I found the callout statements the most interesting. I began to wonder how the companies’ philosophies might have changed, or tweaked ever so slightly, in the three years that have passed since their interviews.

Here’s a sample:

* Toyota takes on environmental issues – even some that have little to do with automobiles – in part because proprietary research for that firm identified the environment as an important issue for people when thinking about cars.
* Target provides consumers with a direct opportunity to choose where Target’s philanthropy goes, through its Take Charge of Education program.
* At Starbucks, a good charitable “fit” for a national Starbuck’s funding partners is an organization that baristas can explain to customers when preparing an order.
* At Cisco, staff members compete for the opportunity to be matched with a non-profit partner because projects were a chance to test knowledge and develop new skills.
* Levi Strauss employs a venture capital-like model - giving a large amount of its grant making dollars in one-time grants to launch new efforts.
* General Mills works with consulting firms it hires to offer no-cost capacity building and leadership sessions for nonprofits in General Mills’ headquarters community.

I did locate an online PDF copy of the report:

Email me with ideas on the next generation of corporate philanthropy innovations. Baristas are essentially venture capitalists, too.

Yvonne Hundshamer
President, Blue Grotto Inc.