Few years ago when massive grocery chain Kroger donated $64 million, they were the only corporation in America to give more than 10% of its profits to charities. Those charitable efforts were both volunteer-based and donation-based, and they included participating in the Food 4 Less program and raising $1.5 million specifically for military families. Customers have noticed those efforts, and profits—and Kroger’s charitable intentions—show no signs of slowing down.
Most of us will never have $64 million to contribute to charity. Heck, most of us will never even have the $1.5 million SmashBurger CEO Rick Schaden (and his wife) donated to Mercy Housing Colorado for a 66-unit complex to house homeless families. That doesn’t mean we shouldn’t become philanthropists, however. Philanthropic activities build our brands.
Of course, indiscriminate charitable donations are great—just not for your business branding. You might be saying, “But why?” If you are, that’s great. The problem is that people recognize when businesses are only being charitable to polish their public image, and surprise, surprise, they don’t like it.
While most people are happy with such charitable donations from a public relations standpoint, it won’t change their spending habits. In fact, if they sense a slick and sleazy corporate mindset, they may turn away from the company.
Consumers want businesses whose charitable donations adhere to their own vision of charity— something that they can get behind. Warren Buffett’s millions of dollars in charitable donation are great, and he may very well be right that the Gates Foundation will make better use of it than he (though I’m not entirely convinced that’s true), but people have a tough time getting behind such a nebulous vision of charity.
So Where Should You Direct Your Philanthropy?
The key is to donate to associated causes. For instance, one of the more widely known examples has to be Toms. Toms designs shoes. Toms donates shoes to the shoeless. That’s a simple, clear cause consumers can support, share, and even be a part of. And so it is that I myself have chosen Toms over the alternative twice now, despite the few extra dollars I had to pay. That’s what Toms is counting on, and it works.
It works because consumers can see the business’ vision within the philanthropy. The charity—whether or not it is wholly philanthropic—seems a natural outgrowth. It doesn’t seem calculated to manipulate consumer views. Of course, we know that all business philanthropy is calculated. But we also know when that same philanthropy is a natural outgrowth of the business and its vision. It just makes sense.
Two Models of Philanthropy
Toms’ philanthropy is built right into its business model. They charge a teensy bit more than their competition, but the extra money goes to charitable activities. Thus, charity-conscious consumers choose them over the competition. Toms ends up with a larger market share and with the same amount of profit. Brilliant, right?
There are two principal routes to philanthropy-based branding:
1. Business Model Incorporation.
Toms uses this route. Unfortunately, not all businesses lend themselves quite as easily to solving world issues as Toms does, but that doesn’t mean that you can’t come up with something.
Restaurants might start donating part of their profits to Action Against Hunger; or, they might partner with a local shelter to donate meals to the local homeless shelter. That provides a tangible vision to consumers, and it’s a cause that probably hits closer to home. Or, they could partner with schools and their local farmer-suppliers to bring fresh foods to the school district.
2. Promotional Activities.
The other type of philanthropy comes out of promotional activities. These are not built into the business model, and they run for a shorter period of time (perhaps seasonally).
Consider Cisco Systems’ Networking Academy. Cisco takes students with a desire to learn and teaches them how to design, build, and maintain networks. Cisco has spread its philanthropy through 165 countries, with over 10,000 individual locations; in fact, in the U.S. alone, they have more than 170,000 students. Not only is this great for their branding, but it also ensures they have plenty of talent to draw from for any future expansions.
Promotional activities are much easier to pull off for small businesses. One of the best ways to do it is to partner with local entities. A restaurant might declare certain days Feed-the-Homeless Day and collaborate with local shelters. Or, they could participate in regular food drives.
Deciding on the right philanthropic activities for your business is as easy, or as hard, as recognizing where your brand’s vision and your consumers’ visions align.
For example, a massive agro-business conglomerate sees itself feeding America, so it’s a natural outgrowth to literally feed America with fresh food school lunch programs. Their industry aligns with the vision of parents who—no surprise—want their kids to eat healthy, and well. That also syncs up with their vision for the community. To them, in some small sense, that massive agro-business conglomerate could become a part of the community.
However, showing how your business vision aligns with the community’s is much easier if you’re already a part of the community—which small businesses already are. For example, an office building could donate part of their profits to show their commitment to a new community center—and their solidarity to the community. A glassblowing shop might donate vases to the public park to liven things up. A nursery might donate some of the plants themselves. A music store might sponsor a public concert at the park.
That sense of unity is what you need to build on, so reach out to other members of the community. Everyone wants to build the community up. Obviously, you know the movers and shakers in your area, but you can also reach out to others through social media. No matter how you contact them, they’ll be all too happy to oblige you.