There are five stages of corporate philanthropy:

1. Cheque-book Philanthropy
2. Strategic Philanthropy
3. Community Investment
4. Corporate Social Responsibilty (CSR)
5. Corporate Citizenship

Social capital is the thread that ties these concepts together.  Using this concept businesses can recession-proof their companies.

In my previous post Bullet-Proofing your Corporate Karma, I presented five ways for you to ensure that your community reputation stays intact during this down-economy.  This post looks at how you can take your community partnerships to a new level in a down economy.

From a business development perspective, charities are going to be impacted by the recession just as businesses will be.  They will have fewer dollars to communicate their message and fewer avenues to share their story with (as companies pull out of community projects, decreases the community contact).  When you look at this contracting market there is opportunity for your business to jump into this void.

What does this look like?

1. Cross-promotions: Charities need new and creative vehicles to tell their story.  Your company has the marketing vehicle and the need to connect with a new market.  By evaluating what type of client you are looking for, you can source out the types of charities that your client will be attracted to.  Negotiating a cross-promotional package is a win-win-win for: your business, the charity, and the client that you are attracting (you are supporting the charity that they are supporting).
2. Employee Cost Reduction: On average it costs Canadian companies, 3x an employees' salary to train someone who leaves within the year (this obviously decreases the longer an individual stays with a company).  This is an expense your businesses cannot afford... in any economy.  One way to retain employees and to cut costs associated with those individuals, is to shorten the work week while connecting with your community partner.  What does this look like?  You can offset the expense of that person by having him/her "work" for a charity that is aligning with your business.  In essence, this individual is now acting as an ambassador, both for your company and for the charity.  You are minimizing the costs for the charity by providing them with an employee so that more money is going towards what their mission is.  There are two ways you can save money - by donating the value of the hours of that person to the charity you can garner a tax credit OR you can negotiate a shorter work-week with that individual generating an actual cost-savings.  The result: You are strengthening your position within community which will directly correlate to your bottom line.  One final justification for this work-schedule model is - studies have shown that Gen Y'ers would sooner have a day-off for volunteering than financial compensation.  Playing into that emotional paycheque is just as important as financial compensation.

These are just two cost-effective ways of Recession-Proofing your company.  I would like to hear how you are using community partners to shore-up your business during these tough times.

There has been much doom and gloom in the media and in our lives lately around our finances.  Many charities are buttoning down the hatches for a stormy ride and many donors are saying that they might reconsider their charitable giving this year.  But what does that mean - might reconsider?

I was having a conversation with a colleague a few weeks ago, Ross Marsh, and he shared with me an interesting tidbit, since 1960 charitable giving in Canada has only gone down ONCE and that was in 2001 when the Tech Bubble burst and 9/11 happened. 

What do I think this means?  Well, based on the phone calls I have been getting lately, I think that donors will still be giving to charities, they will just be more thoughtful about which ones they invest in. 

How will this impact the non-profit sector? The past year or so I have been saying how the charitable sector is going to double over the next decade.  I still think this will occur.  This is still going to happen because people are going to start creating foundations to protect their charitable investments.  Foundations, are registered charities and therefore will add to the growth of the sector. 

On the flip-side of this, the number of organizations that are providing direct service is going to contract.  Donors speak with their dollars.  My sense is that they will be cutting the NUMBER of community investments they make, not necessarily the amount.  This means that organizations that provide duplicate services will be forced to merge, acquire each other, drop services or close altogether.

As donors what should you do? Now is the time to really be smart about your donations.  The most important thing that you can be doing right now is to educate yourself about the cause you are interested in and ask questions of those that are providing services for that cause. 

• Know what the charitable marketplace looks like. 
• If you are going to donate to a cause that has multiple organizations providing services, know and understand what differentiates this organization from the others. 
• Once you have found a charity that is worthy of your hard-earned money, bring others on board.  If you can grow your donation by getting others to match it you will be generating greater impact and alleviating other stresses borne by that charity in seeking out funding.

If you are unsure about where to go from here, drop me an email.  Share with other readers what you are doing this year.  Will you be cutting your charitable giving?  Will you be cutting the number of organizations you give to?