Charitable giving by corporations is nothing new. Businesses have been donating goods and services to charities and not-for-profit organizations for years. What has changed is the approach, and how customers are reacting.
Consider a company like Toms Shoes. It doesn’t simply write a check to an organization at the end of each quarter, nor has it set up a corporate giving trust. Instead, it has wrapped giving directly into its business model. Every purchase made by a customer is matched by a donation of another pair of shoes to someone in need. Not only that, the company focuses a large portion of its marketing on its charitable initiatives — creating positive publicity that hooks potential customers.
In fact, data shows that 88% of consumers find it acceptable for brands to use charitable giving in their marketing campaigns. This represents an increase of one-third since 1993. What is more, 80% of Americans say that they will switch brands (equal in price and quality) to the one that supports some good cause.
Involving charity in your business can put you at a serious advantage. Here are three reasons why.
1. Millennials And Gen Zers Actively Seek Out Brands Who Support Causes
Cost and value may always be the key drivers behind sales. But for millennials and members of the next generation, doing business with companies that support causes they care about is also of primary concern.
They want to know that their money is going to businesses that are socially responsible. In fact, 81 percent expect corporations to make a public statement about their commitment to good citizenship. Charitable giving is a big part of that.
Given the sizable spending power of millennials and Gen Z, it would be foolish to ignore these expectations. It should also be noted that these two consumer groups are much more discerning when it comes to the organizations they respect or support. This is why it is important to be diligent when selecting a cause to support.
2. Employee Morale is Improved
It’s not just customers who are impressed when company leaders make a commitment to doing good. Some 79 percent of people prefer to work for companies that are socially responsible. Employees also react with increased morale and improved performance.
In fact, a survey done by Deloitte showed that employees aged 21 to 35 were twice as likely to be happy with their career if they worked for a company where giving and volunteerism was encouraged.
“The truth is, people want to be associated with employers that are socially conscious and who support causes that they care about,” says Jason Sugarman, who over the years raised millions of dollars for the Fullerton Technology Foundation in California. “Create a sincere charitable initiative supporting causes that your team can relate to, and you give them even more reason to act as an advocate for your company above and beyond what is expected of them. The key is to create an initiative that is impactful, consistent, and sincere. The best way to accomplish this is to identify a need that you truly care about, share that story with your team, and get everyone as excited about the cause as you are.”
If you can find a cause that your employees and target customers can get behind, your business can absolutely benefit from charitable giving.
3. It Opens up Marketing Opportunities
Marketing is much more than creating advertisements to sell products and announcing sales and special offers. It is a tool that is used to develop your company’s brand as well as build relationships with current and future customers. Storytelling has emerged as one of the most effective ways to accomplish these goals. In fact, storytelling is ranked as one of the top three elements that make content marketing most effective.
Brands form bonds with their audience by sharing stories of their products, people, and company history. By incorporating charitable giving into your business model and your marketing, you open up another avenue where you can communicate the story of the cause that you support, the people who are helped, and why that cause is important to you and your team.
It’s even better if you can create engagement around the marketing initiatives you create for your charitable giving.
Take Toyota as an example. The company started a viral hashtag campaign, #Selflessie. Every time a customer posted a selfie on Instagram using that hashtag, Toyota donated $50 to The Boys And Girls Club of America. By partnering up with celebrities like Kelly Rowland, what was meant to be a quarter-million dollar donation eventually became three-quarters of a million dollars in funds for The Boys And Girls Club of America.
The opinions expressed here by Inc.com columnists are their own, not those of Inc.com.