With the winter holidays in full swing, the season of giving is upon us. In addition to giving to your friends and family, many use this time of year to give back, supporting local charities or contributing globally to an important cause.
As the founding father of philanthropy, American industrialist Andrew Carnegie set the bar high for charitable business leaders. Carnegie left an incredible legacy; today there are almost 3000 libraries worldwide established to foster a love of learning. His Carnegie Foundation remains a vital philanthropic organization committed to improving education.
Carnegie’s philosophy of social stewardship has inspired others. Bill Gates established the Bill & Melinda Gates Foundation. And Mark Zuckerberg explains the Chan Zuckerberg Initiative in this heartfelt letter to his newborn baby.
Corporate philanthropy has many business benefits and, in the spirit of the giving season, below are three reasons why social good really is good for business:
1. People want to buy from you
By demonstrating that your company cares about more than just a bank statement, you are building a reputation as a fair, ethical and moral business. Honesty, transparency and authenticity are key qualities to engage your audience, whether it’s impacting environmental sustainability, sheltering the homeless or producing fair-trade, cruelty-free and conflict-free products, all of these factors add up to your brand appearing genuine, compassionate and caring.
A recent article in Forbes highlights that today’s consumers are willing to pay more for an ethically-made product than one made in a conventional factory with potentially poor labor conditions. Brands like TOMShoes and Warby Parker eyewear have experienced enormous success along with brand affinity and brand loyalty with their ‘buy one, give one’ philosophy, quickly establishing them as a brand with a heart.
2. People want to work for you
Rather than the stereotype of a cold-hearted corporation, businesses that strategically entrench giving into their brand and business plan are better able to attract top-notch employees and retain talent with less costly employee turnover.
CRM software giant SalesForce has a ‘1-1-1’ charitable policy where 1% of equity, employee time and products are donated back into the community where they live and work. In an interview with The New York Times, Salesforce CEO Mark Benioff explained philanthropy is important for building a business in a connected world, and is hoping to inspire the next generation of industry leaders to do the same.
3. Increased market value with premium pricing
In addition to the two benefits discussed above, a third has emerged for businesses with strong ties to environmental sustainability or social NGOs, and that is the impact on their market value, revenue and bottom line.
A recent article published in Inc. reported that, after looking through 200+ studies of corporate social responsibility, researchers discovered that social good could increase the market value of a company over that of competing organizations that do not practice social responsibility. Researchers also found that companies who embrace social good can add a price premium of as much as 20% on their products, hugely increasing revenue.
There isn’t a downside to corporate philanthropy. Think about how your organization can embrace social responsibility and engage employees. As Anne Frank once famously wrote, “no one has ever become poor by giving.”