May 14, 2018
Other Voices

Philanthropy is good business

Deborah Rothstein

Running a business today is all-consuming — especially due to the increasing pressure of employee and customer expectations.

We know that talent is at the top of every business leader's list of concerns: attracting and retaining talent, increasing employee engagement, and meeting the expectations of being a solid community partner and positive steward of social capital.

In my role, I find that business leaders are often in search of new and effective ways to increase their bottom line and address these pressing social concerns. The data continues to support this trend.

The 2018 edition of the Deloitte Global Human Capital Trends study reports that 88 percent of Millennials think employers should play a role in addressing social concerns (such as income inequality and the environment); 86 percent think business success should be measured by more than profits; and 67 percent prefer to work for companies seen as socially responsible.

And when it comes to employee retention, the study reported that Millennials who see their employer supporting the local community are 38 percent more likely to stay with that company for five years.

So how can business owners build social capital and their reputation for giving back? Some businesses offer workplace giving and matching gifts. Paid vacation days for volunteer activities are gaining popularity. Larger employers may even create a corporate foundation, or may coordinate giving through a centralized unit within operations or human resources.

I've observed that many small- to mid-sized employers are turning to more creative approaches, like business donor-advised funds, to meet their employees' need to make a lasting community impact. A donor-advised fund allows individuals and families to centralize their giving in one fund and make distributions to nonprofits on their own timetable.

Business donor-advised funds operate in much the same way. Employees and employers make contributions to a fund and collectively decide where the grants go in the community. Employees become engaged when given the opportunity to select the nonprofit recipients, especially when an employee committee is appointed to make the giving decisions.

An example of a socially conscious business with a business donor-advised fund is American Eagle Financial Credit Union. In an effort to be strategic in their grant-making, they established a donor-advised fund in 2010 at the Hartford Foundation for Public Giving to foster charitable giving and community outreach.

The credit union focuses their contributions and volunteer resources on three general categories: education and youth, basic human needs and community development. They host fundraisers annually to raise money to support the fund. Their employees also engage by participating in volunteer events with their grantees.

For example, credit union employees have volunteered with Foodshare's Turkey Drive at Thanksgiving time, worked in the Salvation Army's holiday store during Christmas time, and have spent the day teaching Junior Achievement's community curriculum in an elementary school in Newington.

According to Dean Marchessault, president and CEO of American Eagle Financial Credit Union, "The structure of this fund allows the credit union to be actively involved with fundraising and charitable giving. It puts us in an excellent position to demonstrate our ongoing commitment to community outreach and development."

According to the 2018 Business ROI of Social Investments report, when businesses actively search out ways to increase their social capital and community partnerships the results are powerful. The report cited several positive financial outcomes, including a 20 percent increase in sales, a 13 percent increase in productivity and a 50 percent decrease in employee turnover.

By utilizing a creative approach to corporate giving, business leaders can help engage and retain talent, address community concerns and support the bottom line. The resulting increase in employee engagement and retention creates a lasting spirit of community that appeals to young talent.

Deborah Rothstein is the vice president for development at the Hartford Foundation for Public Giving.

Most Popular on Facebook
Copyright 2017 New England Business Media