Amy S. Choi, the journalist that wrote the article, contacted me a couple months ago for an interview.  We had a great conversation and I really liked that she was writing an article that would include some “how to” tips for small businesses.  During our conversation, as I described the eight steps of effective business giving that I use in my work, I also mentioned some of the great companies I had interviewed for my book as examples to make my points.  Later I sent her several folks contact info, should she choose to get more information.

From my list, Amy chose to also interview Jason Linkow, owner of Metafolics Salon here in Denver.  A great choice!  The man is so nice and a savvy, businessperson with a lot of integrity.  I have written several earlier blog posts about him.  I have been checking daily for this article.  Today I found it by searching for his name on the BusinessWeek site. (Never though to search on my own…duh!)  So there was a great photo of Jason and Amy’s really well done article.  And Amy quoted me, as well – several times actually.

“Once you’ve settled on a cause, think about the various nonprofits that support it, and ask which would help you best achieve your business goals. “There is a way to be strategic and get business value out of your giving, and still do it in an authentic way,” says Susan Hyatt, founder of philanthropy consultant Business Nonprofit Connections. Are you trying to raise visibility? In that case, choosing a small organization to which you can become a major benefactor would be a good strategic move. If you’re looking to improve recruitment and retention or to boost morale, canvas employees for their opinions about worthy causes. For those looking to increase sales, it’s worth asking if a nonprofit’s other patrons might be potential clients….A lot of companies don’t know exactly what they’re giving, which is ridiculous,” says Hyatt. “If philanthropy were a business unit, you would know what you were spending to the penny.”

Then establish some metrics. That means preparing to track what your employees are doing and how much time they give, and the value of in-kind gifts and pro bono services. If you’re giving cash, ask your organizations to tell you how they spent your money, and consider the payback. Did you gain greater visibility or any new clients? You don’t need to quantify the returns on every dollar spent, but if you don’t keep track of what you’re doing, it’s hard to know the benefits either to you or your cause.

If you’ve chosen an organization you don’t already have a relationship with, start building one by contacting either the development director or the executive director, depending on the size of the nonprofit, says Hyatt. If you know someone on the board, start there. Or, if you want to support a specific program, reach out to the program director. Although the frequency of your contact will vary depending on what kind of support you plan to offer, plan on a minimum of quarterly updates. This will give you a chance to explore future opportunities and evaluate the impact of past giving. “You want to create new opportunities, not show up and deliver a check,” says Hyatt.

It’s important to start small. As your business grows, or shrinks, you can adjust your giving accordingly. Decide where the donations will come from in your budget, whether it’s human resources, public relations, or marketing. Appoint a person in the company to monitor these efforts, making sure that the work is recognized as part of their job duties.

You’ll also want to think about how to celebrate your success. There is a fine line between good marketing and appearing self-serving, and the instinct may be to resist saying anything. But remember, most customers want to do business with companies that do good, says Hyatt.”

Very fun!

Myth 1. Business philanthropy is for the large companies only.
Many people believe that business philanthropy is really only for the large “rich” companies such as Nike, Starbucks, Levi Strauss, or Exxon Mobil among many others. While it is true that these global companies operate on a significantly larger scale with more resources at their disposal than small companies and thus can have a significant impact either positive or negative on the communities or countries in which they operate. So changes in their approach to giving back can result in significant impact for nonprofits/NGOs when done strategically and intentionally.   However, it is also true that your company is never too small to make a difference if you also engage in strategic philanthropy. 

In the United States, for example, small business is actually the backbone of the economy. According to the US Bureau of the Census, small firms represent more than 99.7 percent of all employers. Small businesses, are defined by the Office of Advocacy, as companies with fewer than 500 employees. Small businesses employ more than half of all private-sector employees and generate 60 to 80% of new jobs annually. In 2002, there were approximately 22.9 million small businesses in the United States according to Office of Advocacy estimates. Of this number, there were 5.7 million firms with employees and 16.5 million without employees.

In light of such numbers, it is clear that small business is a powerful force in the United States today. So ensuring that small businesses like yours understand how to give back strategically and “profit with values” is essential.  Just think about the possibilities for positive change in our communities if even 50% of small businesses engaged in strategic giving!! 

“You don’t have to be a big company before you can do much in the community. Even as a small company, there are many ways you can support community organizations…the smaller businesses around here have made a lot of difference.” –Chip Bair, Owner, BeauJo’s Pizza, Idaho Springs, Colorado

Myth 2.  Business philanthropy is “wait to do later” considerations once a company is established, has a solid foundation, and has started to show a profit.
Strategic business philanthropy should be a consideration from day one when an entrepreneur or business founder/owner begins to think about starting a business. It is not an add-on for later. Integrating socially responsible business practices including community involvement, from the beginning, is actually easier and more cost-effective than trying to insert them later.

When starting a business there are many things that you need to consider about your business such as its structure and mission, identification of products and potential customers, effective marketing and sales, and securing investments. In each of these areas. there are choices that you need to make when designing the business and developing the business plan. Integrating socially responsible practices (including community involvement) from the beginning has been shown to help strengthen the business and increase its profitability. There are numerous proven business benefits to engaging in strategic business philanthropy.  For specifics on the business benefits, sign up for my free eCourse.

“To do this, you don’t have to be a Microsoft and have a huge foundation with millions and millions of dollars. You really should plan things right from the beginning and step into it. I think EVERY company should look into how they will give back right from the beginning.”  –Maria Simone, CEO of Signature Accents

Myth 3. Integrating business philanthropy into company culture is cost prohibitive for a smaller or startup businesses.
While adoption of certain policies and practices have some up front costs associated with them, in the long run, these expenditures have a significant return on investment, helping save the company money and increase profitability. For example, companies that provide volunteer opportunities on company time have found that employee motivation, productivity, and retention are improved. In the long run the company saves money increases its profitability.

There are so many ways to support and partner with nonprofit organizations beyond the old school check philanthropy model.  Many smaller companies do not have a philanthropy budget yet – but there are so many other ways to get invovled that might have even more impact that cutting a small check!

Myth 4. Philanthropy and community involvement activities are fluffy, feel-good, side activities which siphon off valuable resources with little return.
When undertaken strategically and integrated as part of the overall business building strategy, business philanthropy activities can be an essential component of growing the business. Philanthropic involvement with nonprofits offers an important opportunity for “doing well by doing good.”

In fact, many businesses no longer use the terminology philanthropy or community involvement. Instead, in recognition of the possible returns such activities can provide, they are called community investments. Such community investments can have a significant impact on the companies reputation and sales, employees satisfaction and productivity, in addition to making a valuable contribution and being part of the solution to addressing local social issues in the communities in which they operate.

Myth 5. Business philanthropy should be motivated solely by altruism.
Most smaller companies in fact ARE motivated to support nonprofits by a sincere desire to help communities. However, those that are totally altruistic in their approach make their contributions anonymously to support those issues and organizations that matter to them. Such companies are in the minority. Most companies expect that, in addition to making a contribution in the community, there is also some business upside for them from their philanthropy – such as enhanced reputation and visibility.

Having a strong business community helps improve local economies. Having strong local economies helps ensure higher quality of life and access to services for all members of the community, including employees of the company. To effectively improve local conditions, there must be a partnership between government, community organizations, and business to make it happen. Business is an essential and powerful component, without which change is hampered. In the spirit of true partnership, why shouldn’t both the business and a community organization with whom they are engaged both benefit? Ensuring that the relationship is not one-sided helps insure that the relationship is not a one-shot deal and can be sustained and deepened over time. Both sides need to feel there are benefits from their perspective or the relationship will be short-lived which can be a missed opportunity.

“We absolutely do strategically link our community involvement with business goals.  We are for-profit and very proud of that fact.  The link between community investment and the corporate strategic level for us is about brand recognition – good will goes a long way with that.   You can’t quantify it on your balance sheet but it definitely helps to differentiate you from the other players in the marketplace.” –Ron Baumbarger, BitWise Solutions 

Myth 6. When companies engage in community investment activities, it is self-serving if they tell about it.
While shameless self-promotion is of course undesirable, getting the word out about how your company is supporting the community and various organizations, is a way to let employees, customers, and the community know that your company cares and is doing its part to improve the community and be a good citizen. Many of the larger companies have self-selected to develop stand alone annual corporate social responsibility reports, portions of annual reports, and post information on the web site to be more transparent about their efforts.

Studies have shown that consumers want to buy from companies that support causes. If a company does not let its employees current and perspective customers know what they are doing, it is a missed opportunity to strengthen loyalty and maintain and even increase sales.  Remember, 87% of Americans are likely to switch from one product to another (price and quality being equal) if the other product is associated with a good cause, an increase from 66% since 1993.

Cervical Cancer affects millions of women annually.  On their website, 2 Red Hens also gives educational information on cervical cancer as an added service.

For more information, go to: http://www.2redhens.com/helping.html.

As a business person, are there causes which are near and dear to your heart?  Is there a way you can leverage your company reputation, brand and sales to raise both awareness and dollars to support that cause in bigger ways than you can as an individual?  Have you done this?  I’d love to hear and share your story – please submit a comment or email me at sue@BNConnections.com!

I initially heard about “Beauty for a Cure”, sitting in Jason’s chair while getting one of his fabulous hair cuts. The first year Metafolics did the fundraiser, they collected just over $5,000 to donate.  Since then, Jason and his staff have grown the event after learning a few lessons on promotion and leveraging resources along the way.  Unfortunately, I was in Maine this year working on my book and could not attend the event personally.  However, last year I did attend and while they were able to raise over $10,000, I know the Salon folks were disappointed with the level of attention and support the event received.  However, to their credit, this did not deter them from going it again and finetuning their approach – including starting the planning and promotion much earlier and adding a second doctor to allow provision of more screenings.

And…the results were FABULOUS!  The event this year will gross over $68,000 for the CU research center!  How exciting!  Roughly $8,000+ dollars were collected through direct donations for services provided by Metafolics staff.  Through Jason’s efforts to leverage the Salon’s donation, each $100 donated was matched by $1,200 in funds from other foundations.  Talking to Jason, it is easy to see he is very pleased with the dollar amount raised this year.  However, he is also proud of the education and awareness this event brings to clients and the community.  Also, because of the free skin cancer screenings associated with the event, several people now know they have the disease and can do something about it before their chances at a full recovery are diminshed greatly.

In addition to donations for services the day of the event, Metafolics also offers clients the opportunity to donate, even if they could not participate that day.  “If people would like to donate, they can do so on the CU Foundation Web site, www.cufund.org. Click ‘Give Online’ and then select the health sciences campus, then University of Colorado Cancer Center and indicate “melanoma research” in the notes section. To send a check donation, make the check out to the CU Foundation and indicate “melanoma cancer research” in the subject line. Checks can be sent to: CU Foundation, Gift Processing, P.O. Box 17126, Denver, CO 80217.”

Also, Metafolics got great press for Beauty for a Cure this year.  Kathy Walsh of Denver’s Channel 4 did two great news spots about the event.  Check them out:

http://cbs4denver.com/video/?id=41367@kcnc.dayport.com

http://cbs4denver.com/health/skin.cancer.fundraiser.2.713163.html

Congratulations Metafolics Salon on your successful signature event in 2008!