Making Worthwhile Worth It For Company
By Doris Rubenstein, PDP Services
The Business Journal, June, 2002

It’s a question that most business ask: Is the money we’re giving away to charities making a difference for our company? It’s a hard one to answer empirically.

Companies of all sizes spend millions of dollars annually in grants and the administration of corporate foundation and citizenship programs. No well-run business would invest this kind of money if there weren’t some form of benefit coming back to the company itself. Or would they?

Evaluation should be part of every good corporate citizenship program. Often, evaluation only addresses external successes: measuring results of the grant on recipient organizations and their beneficiaries: How many inner-city kids went to summer camp; what was the attendance at the concert, etc.?

Companies with formal corporate citizenship programs build external evaluation of the project supported into the application process. In Highland Bank’s new community involvement program, it is clear in both their guidelines and application form that detailed reports are required on major grants. If fundraisers don’t provide these data, they shouldn’t waste their time applying for a renewal or a second grant for a new project.

Can business measure the direct dollars-and-cents payback to the company for the grants and gifts made to charity?

The Contributions Academy (www.contributionsacademy.com ), a South Carolina-based educational consulting group, offers some interesting guidelines. Curt Weeden, President, was quoted recently in the on-line magazine issued by Changing Our World (www.changingourworld.com). He made two strong recommendations to help businesses measure corporate citizenship’s impact on the bottom line:

• Know what it is that you want measured.
• Develop the terms of measurement.

An important part of doing this successfully, according to Weeden, is finding the right partners to cooperate in measuring.

The first partner is the non-profit grantee. Information about administrative and fundraising costs on all      501 (c) (3) charities can be gleaned from the IRS Form 990, but those data might be incomplete or misleading. The December 9, 2001, issue of the StarTribune reported that while experts in the non-profit field admit there is no real conspiracy to hide financial facts, many small charities simply don’t keep good enough records to accurately distinguish non-program costs. Business donors should therefore determine that the charity they are supporting is capable of giving them the cold, hard cash facts before writing the check in the first place.

For Highland Bank, it’s easy to measure one thing they want from their partner organizations: visibility. Visibility can be demonstrated by plaques and certificates, mentions in newsletters and articles, listings in programs and announcements. Organizations receiving funds from Highland Bank will send them copies of all these devices, and invite Highland Bank representatives to events where they will be acknowledged publicly. What does it bring to the bank? An accurate image of the bank as a good citizen, one where people will want to do business.

Companies who are serious about corporate citizenship designate a staff person to evaluate the programs. Companies adhering to the Baldrige Award criteria for total quality management, as promoted by the Minnesota Council for Quality, subject their grants programs to the same stringent examinations as for the rest of their operations.

Some internal results are easier to quantify than others, and don’t require outside assistance to identify. Employee matching gifts programs and employee volunteerism can be easily measured: just count how many volunteers participate. These kinds of programs are important indicators of employee morale and commitment to the company.

Larger companies often call on independent evaluators as partners to determine a grant’s internal effectiveness. Independent evaluators can be an educational institutions like the University of Minnesota, or private firms such as Rainbow Research in Minneapolis. The Committee to Increase Corporate Contributions

(www.corphilanthropy.org ) and Business for Social Responsibility (www.bsr.org) also offer guidance for evaluating internal effectiveness.

Most experts in the field agree, though, that the real benefit of corporate citizenship cannot be broken down to bottom-line figures. The fact that so many companies are deeply involved in these activities shows that the benefit to the company, regardless of the bottom-line, is the satisfaction of being a responsible member of the greater community.