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November 1, 2007
Doing Good On Company Time
On a recent workday, Sally Rideout Lambert shed the business clothes she wears to her office for a pair of jeans and work gloves, so she could join with some 60 co-workers — from fellow managers to line workers — to spend the day knocking down walls and making major renovations to the American Red Cross building in Boonville.
Lambert, the public affairs manager at Alcoa Warrick Operations, was one of more than 600 people from 34 companies in the Evansville area who signed up to take part in the annual United Way Day of Caring. Instead of clocking time at work, the employees — with their bosses’ blessings — donated their time and talent to more than a score of labor-intensive community projects, from painting fences at a daycare center to cleaning up sidewalks along Main Street. For Lambert and many of her Alcoa colleagues, it was a warm-up for what was to come: Alcoa’s Worldwide Month of Service held every October. When the effort was first launched five years ago as a week of service, 5,000 Alcoa employees signed up to volunteer for a wide range of community-based projects. This year, 25,000 Alcoa workers are expected to take part.
Those numbers reflect a national trend of employee volunteerism as an integral part of corporate philanthropy. Some of Evansville’s most prominent employers — including Vectren, Fifth Third, Integra, and Old National Bancorp — have designed incentive programs to boost the time and talent their employees donate to good causes — much of it on company time or matched by corporate dollars. They’re convinced that the ROI — the finance term for “return on investment” used by every corporate bottom-liner — will be significant, even if it is difficult to quantify. Consider Lambert’s boss, Alcoa chairman and CEO Alain J.P. Belda who has made employee volunteerism a signature project of his company’s corporate philanthropy program at a time when the Alcoa Foundation (the second largest corporate foundation in the nation) is increasing its charitable giving — a record $42.3 million in 2006.
Belda is convinced employee volunteerism is not just a good thing to do but a smart one given that the time, talent and treasure donated by Alcoa translates into major investments in communities where Alcoa plants are located. That raises the company’s profile as a good corporate citizen, which reaps benefits ranging from stronger relationships with suppliers, customers, and community residents to better recruitment and retention of employees.
Lambert, a native of Warrick County, has no doubt Alcoa’s approach is good for the place she lives and works. “It’s incredible to be with a group of people who take the skills they employ at work and watch them employ that in the community,” Lambert says. “You’re part of an amazing group of people — managers and hourly workers — who are part of a common cause. When we see what we can accomplish together on a community project, it pays big dividends when we come together again in the workplace...”
Corporate Philanthropy is good business, whether it’s employee volunteerism or hard dollars. Research shows that companies with strong philanthropy programs have more loyal customers, employees, and shareholders. Experts say the best corporate philanthropy programs involve companies that pay close attention to doing it right — getting the biggest bang for every buck in community impact and, of course, in goodwill for the donor.
Business and philanthropy experts have been attempting to quantify the positive effects of giving back ever since Nobel Prize-winning economist Milton Friedman said in a 1970 article in The New York Times Magazine, “The only social responsibility of companies is to increase their profit.” As Friedman put it: “The business of business is business.”
While cynics quickly mention tax write-offs as the driver of corporate generosity, corporate philanthropy experts disagree. “Corporations generally look more quickly on how their corporate contribution helps their public image in their community,” says Evansville native Timothy Seiler, who is the director of the Fund Raising School at the Center on Philanthropy at Indiana University in Indianapolis.
How important is that notion of corporate goodwill? Seiler says research shows consumers, believing one company is a bigger community booster than another, will tend to buy from the one that gives more.
That’s absolutely true, says Kathy Schoettlin, vice president of public relations at Old National Bancorp. She quotes customers saying they bank with ONB because of the multitude of community projects the bank supports. “That’s hard to measure,” she adds, “but it’s very important to us.”
Among the research often quoted by philanthropy experts are studies measuring how consumers, employees, and corporate shareholders perceive businesses considered corporately responsible. In 2002, the national nonprofit Council on Foundations — a kind of clearinghouse for large corporate giving — developed the National Philanthropy Benchmark Study, which measured among these three stakeholder segments the impact corporate philanthropy has on loyalty...
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