Giving money away – it's good for business

\Many Canadian businesses are finding that it pays to give money away and some people are so convinced of the concept they are about to introduce it to a number of other firms.

Donations to the community benefit companies in a number of ways, says Hazel Gillespie, national community investment manager at Petro-Canada.

Among other things, it promotes brand recognition, boosts customer loyalty, promotes employee pride and is an opportunity to demonstrate leadership, she says.

As part of Philanthropy Week, Nov. 13-17, the Calgary chapter of the National Society of Fund Raising Executives (NSFRE), is presenting a one-day workshop, Building Communities, that will help charitable organizations tap into corporate goodwill and also introduce 50 to 60 mid-size companies to the joys of giving.

To participate, the charitable organization will have to send a staff member and a volunteer to the event. In turn, they will be sponsored to the tune of $300 by firms new to philanthropy.

“Investment in the community has to be encouraged,” says Stephen Franklin vice-president of fund-raising and revenue development for the Calgary Performing Arts Centre and who has also worked for organizations as diverse as the YWCA, the Banff Centre for the Arts, Calgary Opera and Calgary Handibus.

As much as some companies are contributing to the community, hundreds and thousands of others are not supporting the non-profit sector. Without that non-profit sector, which includes hospitals, libraries, teaching institutions, the arts, welfare organizations and churches, our world would be a much poorer place.

For example, companies have relocated to Calgary because of its vibrant arts scene, says Franklin, citing TransCanada Pipelines’ decision to move here in 1990.

“People from Toronto were absolutely astonished we had the Calgary Philharmonic Orchestra and the theatre we have. It certainly factored into the equation,” he says.

However, it appears that corporate giving isn’t as much as it first seems. “We know that 90 per cent of the dollars going to the charitable sector come from individuals, five per cent from foundations and less than five per cent from the corporate sector,” says Franklin, one of the organizers of NSFRE events.

“The majority of Canadians believe corporations have taken up the slack, but that’s not true at all.”

Franklin is careful to point out the difference between donations and sponsorship. The latter usually involves money from a marketing budget and some kind of a benefit to the company, other than a tax receipt, like getting its name on banners or programs.

A Portrait of Canada’s Charities, published by the Canadian Centre for Philanthropy, says about $86 billion passed through almost 70,000 registered charities in 1993. This was equivalent to 12 to 13 per cent of Canada’s Gross Domestic Product, or approximately the size of British Columbia’s GDP.

In the United States, corporate giving amounts to almost 1.3 per cent of corporate pre-tax income, while in Canada it’s about 1.21 per cent. As Canadians, though, we can give ourselves a small pat on the back. Our corporate donations are rising as a percentage of pre-tax profits, while in the U.S. they are declining.

In Canada, hospital and teaching institutions receive 58 per cent of the revenues, although they compromise only five per cent of the registered charities. On the other hand, more than a third of the charities are classed as places of worship, but they only receive about six per cent of the total.

Gillespie doesn’t really see it as a “them” and “us” situation when it comes to giving.

“Companies are no more than collections of people,” she says. “We all have a role to play in creating the best society we can. It’s not a case of corporations AND the community. We ARE the community. We all need to act with a view to making a difference.”

Or, as Sue Tomney, director of communications for TransAlta, says: “Part of good business is being a good neighbour.”

You can’t quantify it as you could the number of widgets on a conveyor belt, she says, but there are intangible benefits like fostering a sense of family among employees.

In 1998, Petro-Canada invested about $4.5 million in charitable organizations and last year TransAlta gave out $4.6 million in the form of scholarships, donations and sponsorships. But both Gillespie and Tomney believe it’s not enough to sign a cheque.

Increasingly, enlightened companies are encouraging employees to walk the talk and become involved in organizations to make “community investment come alive.” TransAlta retirees, for instance, have participated in the Garden of Eaten program, organized by Volunteer Calgary to grow vegetables for the Inter-Faith Food Bank.

Paint the Town is another Volunteer Calgary project in which different companies send volunteers to paint seniors’ houses, enabling the elderly to stay in their home longer than they might otherwise be able.

There’s a four-year waiting list of seniors, says Shawna Ogston of Volunteer Calgary, and each year 20 to 30 homes receive a facelift. The enthusiasm it generates is contagious.

“It’s proven there is such a thing as ‘Helper’s High’ because endorphins are released when you do good things for the community,” says Ogston, whose organization connects people and corporations with opportunities.

Happy people live longer, she points out, which is good for corporations because healthy employees equal a healthy organization.

Wayne Stewart, who has sat on both sides of the charity fence, is also a proponent of corporations rolling up their sleeves and involving their employees from top to bottom.

Formerly a senior manager at Shell responsible for corporate donations and a former executive director of the Calgary Foundation, Stewart says it doesn’t do the community a service to erect a filter between the corporation and the non-profit group they wish to serve.

Programs like the United Way’s Day of Caring and Vehicle For Change, which introduce people to agencies and their work, are a good step in this direction, he says.

Stewart, like everyone else, sees a huge ethical component to giving, but also a solid business foundation.

“Corporations do better if communities do better. If you are selling gas, you sell more if the community is stable.”