Office Supply Company — “Give Something Back’
Saturday, July 28th, 2007Give Something Back Business Products donates over 50% of after-tax profits to non-profits chosen by customers and employees. It is part of the growing group of competitive businesses modeled after Newman’s Own. Cofounder Mike Hannigan shares some of the in’s and out’s of creating the largest independently owned office supply company in the Western US and pillar of corporate community involvement.
Hannigan emphasizes that first and foremost, this is a business, and people need to remember that. The pre-requisite for starting the company is knowledge of the product and market one will be entering. It is a very competitive market, and customers won’t choose a company solely because of its philanthropic programs. The office supply company for example is highly competitive on prices, with the recognition that office managers of other companies will focus on meeting their budgets first. The donations might however help a customer choose Give Something Back over a similarly priced competitor. He even goes on to say that the business and donation philosophy are not really strategically linked. Unlike many integrated cause-related businesses, for example, Give Something Back will donate money to environmental causes, but still sells primarily virgin (rather than recycled) paper because that is what customers demand.
The company has found that there are three primary business benefits to its philanthropic policies: marketing, customer retention, and employment recruiting. It doesn’t even advertise. Part of the reason it’s able to do this is because of the positive attention and publicity it receives when winning awards for business philanthropy and rapid growth. Second, although customers won’t choose Give Something Back solely for the company philosophy, they have proven to be more loyal. For example they will often give the company second and third chances when it makes mistakes, a big help to the relatively new company. Finally, this philosophy helps in employee recruitment, as Hannigan has found that the company recruits people that are interested in being more involved rather than just receiving a pay check.
In order to equitably distribute money and empower these employees and customers, Give Something Back uses a voting system to distribute its profits every year. It is structured such that each metro area receives a different ballot, to distribute their proportionate profits to the local community. In order to make it on the ballot, charities must apply for the grants and be approved by an independent auditing agency chosen by Give Something Back. On average, there are 50-60 organizations on each ballot; and it has donated over $3 million to Community Based Organizations (CBO’s) since its inception in 1991. Give Something Back is not cause-related, so any CBO can apply to be on the ballots. Furthermore, because of its private status, Give Something Back has the ability to exercise more freedom in additional programs to help the community. Two examples of this are making a loan with company assets to a community organization needing to expand (a loan much larger than the average grant) and finding wholesale prices for schools needing supplies rather than selling to schools.
One mistake that Give Something Back made in the beginning was trying to be involved in the decisions of non-profits to which it donated. Hannigan stresses that this was a mistake, as he knows the business he runs just as non-profit leaders know their non-profit world. The business now makes it a point to be very hands-off with CBO’s who receive grants. A final lesson learned for the company is to have structured programs in terms of giving and human resource (HR) management. Part of this structure is having HR employees designated to help encourage the giving climate within the company, and keep reminders of recent events. It also has an Annual Donation Meeting where charities come to the company and present to employees and customers what they have done with the grants. These policies help to ensure that ‘the positive energy felt because of a positive impact is reinforced regularly by a conscious management strategy.’
By Louise Doyle Based on interview with Hannigan Hannigan, cofounder of Give Something Back Business Products, conducted by Susan Hyatt. More information on Give Something Back Business Products can be found at: http://www.givesomethingback.com




