October 17, 2005
The gift that keeps on giving | Corporations say they make charitable donations because it's the right thing to do, but marketing is also a factor
By Jeffrey Bouley
When Hurricane Katrina slammed the Gulf Coast at the end of August, the owners of Barber Foods decided to send a truckload of the company's prepared chicken entrees and snack items to help feed victims. One truckload soon became two, and then a third truck shipped out at the end of September.
As companies often do in such situations, Barber Foods sent out a news release about its hurricane assistance efforts. In it, the company's president, Steve Barber, said, "It's a small gesture to an unimaginable situation." But the family made no special effort to get coverage in the media, and expected no particular recognition for their charitable efforts, according to David Barber, vice president of sales and marketing for the Portland-based company, which distributes frozen chicken throughout the Unites States and to some international locations.
"You sit up and think, 'What can we do to help,' and our specialty is food, so that's where we helped," he says. "We knew we wouldn't get any particular benefit from doing that, which is fine with us. I mean, it's not like people or companies are going to say, 'Hey, we had food from Barber when we were stranded in the Gulf Coast and, boy, are they great.'"
So it was a surprise to the Barber family when a woman who had benefited from their donations decided to find out who had provided the chicken she was eating during her time of crisis, tracked down the company's address, and sent them a thank-you note. "That was very nice and very unexpected," Barber says.
The woman's gratitude isn't likely to translate into increased business for Barber Foods, unless she turns out to be heir to a food distribution empire. And thus the company is unlikely to recoup any of the $300,000 value of the products it trucked to the Gulf Coast. But as David Barber notes, it's nice to be recognized for good works, even if that's not what drives the giving ˆ and even if that recognition doesn't mean an improvement in the company's public image or financial bottom line.
And that sums up the delicate balancing act that is corporate giving. Companies often want to help out for the sake of helping, whether for unplanned giving such as disaster relief or for charitable causes that are part of the company's planned giving. But at the same time, corporate philanthropy often must go hand-in-hand with marketing concerns. Because, at some level, whether in terms of karma or increased exposure and sales, companies hope to be rewarded for their good works.
"One thing I've told people here in the company more than once is that it's good to be generous ˆ and one should give to good causes ˆ but you also have to stay in business," says Mary Allen Lindemann, co-owner of Portland-based Coffee by Design. "If you don't, you don't have the opportunity to help people in the future."
The partnership approach
Lindemann and her co-owner husband, Alan Spear, view charitable giving through two lenses. On the one hand, Lindemann says, they choose charitable causes that help them invest in the communities where they have locations or because a cause is related to issues the couple considers important ˆ or that their employees and customers do. On the other hand, charitable giving is an outlay of money and, in most cases, is considered a marketing expense.
"Our mission statement makes a point about giving back to the community," Lindemann says. "But we also realized early that when we gave to organizations, events or causes, we were creating partnerships with these other entities. It is our marketing dollars we are spending when we give, so we have to look at giving as a series of partnerships, and we have to be involved enough to not just give money but ensure that it is well utilized and that our name or logo is used somewhere."
For Hurricane Katrina, she admits, there was no specific partnership or opportunity to get Coffee by Design's name highlighted among the many other givers ˆ the company collected donations at its three locations shortly after the disaster and donated a portion of sales one day to relief efforts. But for most companies that gave after Katrina, Lindemann points out, that money was outside of their normal giving strategies and, like Coffee by Design, probably outside of their planned annual giving budgets.
Even so, she notes, her company does benefit from unplanned giving. Customers see that Coffee by Design is doing something good without being asked to do so, and that helps validate the faith they place in the company. "People know we will get publicity for a lot of the giving we do," Lindemann says, "but they also know that we do it because we genuinely care. That's part of the relationship we've built with customers and charitable causes over the years."
And, just as Coffee by Design benefits from having its name or logo at events it helps to fund, for example, so too do nonprofit organizations benefit by having their names appear in various ways in the company's coffeehouses. Lindemann recalls one situation in which a customer saw mention of an organization called Coffee for Kids that was doing relief work in Nicaragua and decided to give it $5,000.
The challenge, Lindemann says, is in saying no. Her company cannot afford to give to everyone, and she says she'd rather give generously to 10 organizations she's been working with for years than to spread her funds thinly across a hundred random organizations.
"Sometimes, even charitable organizations can get mean-tempered," she says, noting one situation in which an organization she refused suggested that she must not care about starving children. "Also, the first time we did something for World AIDS Day, someone came up to me and said, 'You're just doing this for the publicity.' That really hurt, because we are very involved in giving to the arts, and that's a place where AIDS had hit people hard. But it's really important to pick causes you are truly passionate about and not try to be everything to everyone."
Product placement
Just as Coffee by Design does, Freeport-based L.L. Bean focuses much of its giving with a sense that it is building a community spirit among employees and customers ˆ and investing in the communities it serves.
The company regularly lends financial support to the arts, for example, but it also donates to health and human services causes in Maine as well as educational causes, particularly in communities where the company has a physical presence. "It's not just being a good neighbor but also investing in the strength and well-being of your neighborhood," says Janet Wyper, community relations manager for L.L. Bean.
Still, the company puts highest priority on recreation and conservation efforts. "That's the biggest part of our giving program because that's who we are," Wyper says. "Obviously, from a business standpoint we have a desire to encourage people to go outdoors, but we also want them to be mindful of the environment. We don't want to tell people, 'Go out into nature and trample all over everything and please buy our products to do that.'"
When L.L. Bean sponsors activities or events, such as an outing tied to a charitable effort, it spreads the word to customers with coverage in both its website and its catalogs.
Like so many other companies, L.L. Bean also gave to Katrina relief, but in that case, the company has had no particular plans to promote its contribution, aside from having encouraged visitors to its website to join L.L. Bean in supporting hurricane victims. The company gave $250,000 to the Red Cross specifically for hurricane relief use, just as it had with tsunami relief efforts last year ˆ and those monies were entirely separate from the company's annual $2 million budget for charitable giving, according to Wyper.
The company also looks for opportunities to capitalize on its products when making donations. That strategy is supported by Lindemann of Coffee by Design, who recommends that companies look at what they do and what they sell as clues to what they can contribute ˆ aside from money ˆ and what charitable causes make sense for them.
"We gave money for Katrina because that's usually the first thing that is needed with disasters like this," Wyper says. "But we've also been in touch with organizations to see if there is anything we can do to help that is related to our product lines at some point, such as perhaps donating winter coats to people who have relocated to Maine from the Gulf Coast."
Intangibility and change
Scarborough-based Hannaford Bros. Co. is yet another of many Maine companies that gave to the Katrina relief effort. That help took the form of a $250,000 donation to the Red Cross and a cash-register-based fundraising program that ran for about two weeks in September.
In general, though, Hannaford seeks to fund organizations and programs that involve its store associates, are located in the states in which Hannaford does business and that have the potential to provide ongoing services for a large segment of Hannaford's customer base. "We are committed to helping our communities become healthier, more prosperous and better places to live," says Caren Epstein, public affairs and media relations manager for Hannaford, adding that the company also conducts surveys periodically to find out what customers are interested in. When the company's name is attached to a fundraising event, she notes, that "gives us continuous, tangible visibility in that particular venue." She adds, "Media mentions tied to donations let customers and community members know that we are investing in the communities we serve."
At the same time, she says, Hannaford's recent surveys suggest that while consumers like the businesses they patronize to be good corporate citizens, they don't make shopping decisions on that basis.
Janet Henry, president of the Maine Philanthropy Center in Portland, agrees with Hannaford's outlook that giving helps consumers and employees feel better about doing business with a company. But she believes more strongly than does Epstein that there are direct financial benefits. They aren't always obvious, Henry says, but they are often present.
"I think that most companies want to be good local citizens in their communities where they are based or where they operate because it's where their people work and live," Henry says. "But it's been shown that companies that have good local involvement can improve their bottom line."
Henry says that one of Maine's strengths is that what it lacks in large companies doing huge amounts of giving, it makes up for with a large number of small- and mid-sized businesses with a strong social commitment ˆ the very companies most likely to benefit from strong ties to their communities.
"Something that companies here in Maine have often shown is strong social responsibility, and that's something that will continue in large part because many of our companies are very local or regional, and they tie their success to the health of their communities," she says. "And to that end, charitable giving, while it has a marketing component, is simply a necessary part of growth and prosperity."
As companies often do in such situations, Barber Foods sent out a news release about its hurricane assistance efforts. In it, the company's president, Steve Barber, said, "It's a small gesture to an unimaginable situation." But the family made no special effort to get coverage in the media, and expected no particular recognition for their charitable efforts, according to David Barber, vice president of sales and marketing for the Portland-based company, which distributes frozen chicken throughout the Unites States and to some international locations.
"You sit up and think, 'What can we do to help,' and our specialty is food, so that's where we helped," he says. "We knew we wouldn't get any particular benefit from doing that, which is fine with us. I mean, it's not like people or companies are going to say, 'Hey, we had food from Barber when we were stranded in the Gulf Coast and, boy, are they great.'"
So it was a surprise to the Barber family when a woman who had benefited from their donations decided to find out who had provided the chicken she was eating during her time of crisis, tracked down the company's address, and sent them a thank-you note. "That was very nice and very unexpected," Barber says.
The woman's gratitude isn't likely to translate into increased business for Barber Foods, unless she turns out to be heir to a food distribution empire. And thus the company is unlikely to recoup any of the $300,000 value of the products it trucked to the Gulf Coast. But as David Barber notes, it's nice to be recognized for good works, even if that's not what drives the giving ˆ and even if that recognition doesn't mean an improvement in the company's public image or financial bottom line.
And that sums up the delicate balancing act that is corporate giving. Companies often want to help out for the sake of helping, whether for unplanned giving such as disaster relief or for charitable causes that are part of the company's planned giving. But at the same time, corporate philanthropy often must go hand-in-hand with marketing concerns. Because, at some level, whether in terms of karma or increased exposure and sales, companies hope to be rewarded for their good works.
"One thing I've told people here in the company more than once is that it's good to be generous ˆ and one should give to good causes ˆ but you also have to stay in business," says Mary Allen Lindemann, co-owner of Portland-based Coffee by Design. "If you don't, you don't have the opportunity to help people in the future."
The partnership approach
Lindemann and her co-owner husband, Alan Spear, view charitable giving through two lenses. On the one hand, Lindemann says, they choose charitable causes that help them invest in the communities where they have locations or because a cause is related to issues the couple considers important ˆ or that their employees and customers do. On the other hand, charitable giving is an outlay of money and, in most cases, is considered a marketing expense.
"Our mission statement makes a point about giving back to the community," Lindemann says. "But we also realized early that when we gave to organizations, events or causes, we were creating partnerships with these other entities. It is our marketing dollars we are spending when we give, so we have to look at giving as a series of partnerships, and we have to be involved enough to not just give money but ensure that it is well utilized and that our name or logo is used somewhere."
For Hurricane Katrina, she admits, there was no specific partnership or opportunity to get Coffee by Design's name highlighted among the many other givers ˆ the company collected donations at its three locations shortly after the disaster and donated a portion of sales one day to relief efforts. But for most companies that gave after Katrina, Lindemann points out, that money was outside of their normal giving strategies and, like Coffee by Design, probably outside of their planned annual giving budgets.
Even so, she notes, her company does benefit from unplanned giving. Customers see that Coffee by Design is doing something good without being asked to do so, and that helps validate the faith they place in the company. "People know we will get publicity for a lot of the giving we do," Lindemann says, "but they also know that we do it because we genuinely care. That's part of the relationship we've built with customers and charitable causes over the years."
And, just as Coffee by Design benefits from having its name or logo at events it helps to fund, for example, so too do nonprofit organizations benefit by having their names appear in various ways in the company's coffeehouses. Lindemann recalls one situation in which a customer saw mention of an organization called Coffee for Kids that was doing relief work in Nicaragua and decided to give it $5,000.
The challenge, Lindemann says, is in saying no. Her company cannot afford to give to everyone, and she says she'd rather give generously to 10 organizations she's been working with for years than to spread her funds thinly across a hundred random organizations.
"Sometimes, even charitable organizations can get mean-tempered," she says, noting one situation in which an organization she refused suggested that she must not care about starving children. "Also, the first time we did something for World AIDS Day, someone came up to me and said, 'You're just doing this for the publicity.' That really hurt, because we are very involved in giving to the arts, and that's a place where AIDS had hit people hard. But it's really important to pick causes you are truly passionate about and not try to be everything to everyone."
Product placement
Just as Coffee by Design does, Freeport-based L.L. Bean focuses much of its giving with a sense that it is building a community spirit among employees and customers ˆ and investing in the communities it serves.
The company regularly lends financial support to the arts, for example, but it also donates to health and human services causes in Maine as well as educational causes, particularly in communities where the company has a physical presence. "It's not just being a good neighbor but also investing in the strength and well-being of your neighborhood," says Janet Wyper, community relations manager for L.L. Bean.
Still, the company puts highest priority on recreation and conservation efforts. "That's the biggest part of our giving program because that's who we are," Wyper says. "Obviously, from a business standpoint we have a desire to encourage people to go outdoors, but we also want them to be mindful of the environment. We don't want to tell people, 'Go out into nature and trample all over everything and please buy our products to do that.'"
When L.L. Bean sponsors activities or events, such as an outing tied to a charitable effort, it spreads the word to customers with coverage in both its website and its catalogs.
Like so many other companies, L.L. Bean also gave to Katrina relief, but in that case, the company has had no particular plans to promote its contribution, aside from having encouraged visitors to its website to join L.L. Bean in supporting hurricane victims. The company gave $250,000 to the Red Cross specifically for hurricane relief use, just as it had with tsunami relief efforts last year ˆ and those monies were entirely separate from the company's annual $2 million budget for charitable giving, according to Wyper.
The company also looks for opportunities to capitalize on its products when making donations. That strategy is supported by Lindemann of Coffee by Design, who recommends that companies look at what they do and what they sell as clues to what they can contribute ˆ aside from money ˆ and what charitable causes make sense for them.
"We gave money for Katrina because that's usually the first thing that is needed with disasters like this," Wyper says. "But we've also been in touch with organizations to see if there is anything we can do to help that is related to our product lines at some point, such as perhaps donating winter coats to people who have relocated to Maine from the Gulf Coast."
Intangibility and change
Scarborough-based Hannaford Bros. Co. is yet another of many Maine companies that gave to the Katrina relief effort. That help took the form of a $250,000 donation to the Red Cross and a cash-register-based fundraising program that ran for about two weeks in September.
In general, though, Hannaford seeks to fund organizations and programs that involve its store associates, are located in the states in which Hannaford does business and that have the potential to provide ongoing services for a large segment of Hannaford's customer base. "We are committed to helping our communities become healthier, more prosperous and better places to live," says Caren Epstein, public affairs and media relations manager for Hannaford, adding that the company also conducts surveys periodically to find out what customers are interested in. When the company's name is attached to a fundraising event, she notes, that "gives us continuous, tangible visibility in that particular venue." She adds, "Media mentions tied to donations let customers and community members know that we are investing in the communities we serve."
At the same time, she says, Hannaford's recent surveys suggest that while consumers like the businesses they patronize to be good corporate citizens, they don't make shopping decisions on that basis.
Janet Henry, president of the Maine Philanthropy Center in Portland, agrees with Hannaford's outlook that giving helps consumers and employees feel better about doing business with a company. But she believes more strongly than does Epstein that there are direct financial benefits. They aren't always obvious, Henry says, but they are often present.
"I think that most companies want to be good local citizens in their communities where they are based or where they operate because it's where their people work and live," Henry says. "But it's been shown that companies that have good local involvement can improve their bottom line."
Henry says that one of Maine's strengths is that what it lacks in large companies doing huge amounts of giving, it makes up for with a large number of small- and mid-sized businesses with a strong social commitment ˆ the very companies most likely to benefit from strong ties to their communities.
"Something that companies here in Maine have often shown is strong social responsibility, and that's something that will continue in large part because many of our companies are very local or regional, and they tie their success to the health of their communities," she says. "And to that end, charitable giving, while it has a marketing component, is simply a necessary part of growth and prosperity."
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