Is being good actually good for business? These days, it’d be hard to make a case that says otherwise. Corporations give hundreds of millions in capital and in-kind donations to domestic and international causes, increasingly aligning themselves with social issues, and even embedding sustainability right into their products. And, whether or not every instance of giving is strategic, it’s proven to improve company reputation and correlate with business growth.
Six of the top seven reasons that large companies invest in their communities influence business development, as reported by Imagine Canada. Although 50% of participants felt strongly that it’s just a good thing to do regardless of business return, 72% agreed that what is good for the community is also good for business and 51% agreed it was good for reputation. Corporations that recognize their role in their local communities as institutions, employers, influencers and citizens stand to benefit in various ways. It’s a simple matter of tending to the issues in “your own backyard” and the positive outcomes it can have – corporate social responsibility.
5 Ways That Giving Locally Can Benefit Business
1. Spur Local Awareness
Creating and sustaining a positive reputation in the community is one way to promote your product or service and generate brand awareness. In the same way that advertising or PR dollars can be spent on awareness campaigns, community investment can target similar goals. This may not translate to a new source of customers, per se, but does mean a new source of recognition.
2. Boost Employee Retention
Numerous studies point to the fact that employee engagement and corporate citizenship improve talent retention. A positive reputation among the local community can often translate to a positive reputation among the local professional community. For most companies looking to attract the best and brightest of the now maturing millennial generation, corporate citizenship counts.
3. Build a Sustainable Community Investment Plan
One reason for the shift is that local philanthropy presents a sort of logistical advantage: businesses have more to offer than random capital investments. The direct benefit to business is the ability to sustain a philanthropic role in the community without necessarily investing hard capital. Donations can include in-kind gifts of no-longer-needed items, pro-bono services or surplus products.
With a ‘portfolio’ of available donations, all of which benefit community organizations and causes in different ways, businesses can balance how much they invest and allocate resources strategically. In fact, in-kind and pro-bono donations are becoming more popular choices for corporate community investments.
4. Garner Media Attention
Community organizations are always eager to thank donors, often using a variety of outlets to do so. It’s one of the ways that non-profits and charities nurture the relationship from their end and use even minor donations as an opportunity to spread awareness of their cause. Companies often benefit from press releases, coverage in non-profit annual reports, mention in newsletters and invitations to events. The amount of media generated by a donation usually depends on how remarkable the donation is in size or kind although even small donations can yield results.
5. Nurture Strategic Relationships
Business development is synonymous with relationship development. Relationships are key to identifying new opportunities and overcoming challenges. Who’s willing to go to bat for your business or your management team? Networking with the non-profit sector and encouraging other local businesses to participate in events and programs is a great way to establish and nurture relationships in an amiable, pressure-free setting. This can also help develop a better relationship with businesses and non-profits overall to the betterment of the general community.
Plus, attract the occasional new customer.
While hard to predict, community investment can translate into new sales. Depending on the business, the same community and organizations you engage may be those who can benefit from your offering. For instance, pro-bono offerings from professional services can be a stepping stone to referrals or future work; the donation of service serves as both community benefit and a sort of ‘pilot project.’ In either case, you have the opportunity to showcase your specialization while participating in a good cause.