From the pages of In Business magazine.
During times of crisis, many of us are inspired to give back to our communities. That’s certainly the reaction we have seen in response to the COVID-19 pandemic that shocked our global community. Whether you are a solopreneur or work for a large organization, you can leverage strategic philanthropy to make a big impact.
Strategic philanthropy is defined as a convergence of interests by Mark Kramer and Michael Porter of Harvard Business School. On a graph, pure philanthropy is a social benefit, while pure business is an economic benefit. The wedge between the two is the convergence of social and economic benefit. We saw this play out amid COVID-19 in the way various businesses stepped up in a time of need and gave their business value to benefit society.
Another way to achieve strategic philanthropy is by transforming your giving culture. My wife Patti and I believe we were put on this earth to “do good,” meaning we give our resources of time, talent, and treasure. As such, TASC has a robust culture of giving, but we started much smaller and built it over time. While having “Corporate Social Responsibility” is growing in popularity, we have a different approach called the “Shared Responsibility” model in which the employer and the employee together can be everyday philanthropists.
Volunteer (Time)
- Offering employees paid Volunteer Time Off (VTO) enables them to support a nonprofit organization during their usual work hours. During COVID-19, we eliminated the requirement to volunteer at a 501(c)(3).
- A Dollars for Doers program recognizes employees who volunteer on their personal time (for example, awarding $5 per volunteer hour).
- Longer-Term Volunteer Time Off deploys an employee to a 501(c)(3) organization. Their wages and benefits are tax deductible as an ordinary business expense, according to the Internal Revenue Code.
Serve (Talent)
- In-kind products and services provide nonprofits with your business offerings, acumen, and expertise.
- Encourage employees at all stages of their careers to participate in community leadership programs and join nonprofit boards or committees to develop their professional skills.
Donate (Treasure)
- Employee donations to charity can be matched by their employer, usually at a percentage or a dollar-for-dollar match.
- Contribute to a Disaster Relief Fund to support affected areas. Gifts can be made at the individual and/or employer level.
- An Employee Crisis Fund (taxed or tax-free) is designed to support employees struggling with personal hardship or qualified disasters. Coworkers can help each other by contributing to this fund.
- A scholarship to help financially support the children of employees who are pursuing higher education. These can be funded by employers and/or employees.
- Giving account options enable charitable donations that are tax advantageous or otherwise, funded by employees, and/or matched by employers to nonprofit agencies.
- Companies can take advantage of budgeted philanthropy by utilizing a Donor Advised Fund (DAF) for their donations.
Strategic philanthropy will come in many shapes and sizes. Start with your social interests, involve your employees, and determine the exponential business value. Incorporating more business value creates more social value, and that ultimately is what makes philanthropy strategic.
Dan Rashke is the CEO/owner of Total Administrative Services Corp. (TASC).
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