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Good Deeds Do Pay Off -- Corporate Philanthropy Shown to Increase Employee Loyalty

by Ashley Jones - www.vault.com

According to the BNA's Quarterly Report on The Employment Outlook, Job Absence and Turnover, employee turnover rates are the highest they've been in the last ten years. Extended vacation plans, sabbaticals, plush stock options, signing bonuses and other fringe benefits get your recruits in the door. Now, how do you make them want to stay, regardless of the offers that come their way?

The answer is simple. Philanthropy. It's an age-old idea that's getting a new facelift in the form of cause marketing. According to Corporate Connections, a publication from the Office of Corporate Relations at Emory University, a diverse corporate philanthropy program that reflects the giving patterns of its employees is an effective recruiting tool for bringing in and, most importantly, retaining talented employees.

Jim Losi, president of the Charles Schwab Corporation Foundation knows the exact moment, his boss decided to become involved in his community, "Chuck (Charles Schwab) saw senior citizens going into the local YMCA for lunch because they couldn't afford it themselves. He thought they were there to help our employees serve lunch to the homeless."

"He soon realized that the seniors were coming to receive a lunch because they couldn't afford their own. He was awestruck by the number of people that couldn't afford to feed themselves. This dynamic moment led to our current mission: to help every individual become a better investor. An extension of that vision is assisting every person in becoming a better community investor."

"Ninety-six percent of employees feel good about working at our company because of the company's support for charitable causes. In 1999, contributions to HIV and AIDS programs totaled over $635,000 through grants, matching gifts and walk sponsorships. Eighty percent of our employees agree that philanthropy is a very important part of their lives. More than 75% of employees believe that volunteerism promotes teamwork and fosters a bond among colleagues."

Schwab isn't alone in its thinking. The BNA Survey for Job Turnover states that employers should concentrate on realistic, positive efforts to contain turnover by improving employees' development opportunities. The 1999 Cone/Roper Cause Trends Report: The Evolution of Cause Marketing found that 87% of employees at companies with cause programs feel a strong sense of loyalty to their employer, versus 67% of those who don't have such a program. Promoting a cause within the company, gives employees a sense of pride.

Robin Matchett, manager of corporate communications at the New Hampshire- based Timberland Company, agrees. "Our mission of cause-related programs starts with the our CEO, Jeffrey Swartz. As one of our employees adequately put it, [Philanthropy] isn't the appetizer, it's the main course. Employees tell us that our cause-related programs are what put them over the edge when deciding what company to join," Matchett goes on to point out.

The Timberland Company, with it's assortment of cause-related programs through the Path of Service program, gives employees 40 hours of paid time off annually to volunteer. The company ranked in Fortune magazine's 100 Best Companies to Work for list in 1998 and 2000.

Besides being a powerful recruiting tool, cause-related programs increase employee productivity. A 1998 Corporate Citizenship Company study found that employees who participated in volunteer programs showed an overall improvement of 17%, especially in the areas of communications skills, collaboration and team-working skills and creative thinking skills.

According to Jason Chandler, assistant director of corporate relations at Emory University in Atlanta, the issue is trust. "Anybody can work for a strong company with good quarterly profits. But how many people can say that they believe in the company and respect what it's doing to better the community."

Chandler goes on to say, "Philanthropy not only speaks volumes to the consumer; it helps to create a higher morale for employees. Wanting to work for a company and having to work for a company are two different things. I would much rather buy a product from a company that has workers that want to be there ... it translates into better products and better service."

The question then becomes: What type of program will be most productive for a company's employees? Chandler challenges employers to look thoroughly at their options. "Expanded choice in workplace giving campaigns allows people to conveniently support the causes they believe in without feeling pressure from the boss to give to any one particular fund."

Case in point: The Timberland Company works with City Year, a organization that gets volunteers involved in classrooms, community centers and public housing developments. The company doesn't stop there, however. Americorps, the Points of Light Foundation, and the Rheedlen Center/Harlem Children's Zone are just a few of the options employees can volunteer.

Morrison Schafroth, a spokesperson for Charles Schwab's corporate headquarters in San Francisco, agrees that employees should contribute to what they hold close to their hearts.

"We have a double match gift program that allows me to invest in my child's school, my alma mater, and organizations that I am affiliated with," says Schafroth. "I worked on a Habitat for Humanity house with several co-workers I would have never otherwise come in contact with. When you figure out how to get a bathtub into a door with the head of corporate communications, bonds are formed."

The Charles Schwab Corporation has taken corporate philanthropy a step further with its internal corporate giving Web site. The site, developed by Schwab's Community Investor Services enterprise, supports the company's employee-driven approach to philanthropy. Schwab's internal Web site allows employees to go online and develop their own philanthropic accounts. An employee can pick the parameters he wants to work within (depending on money and time available) and complete a volunteer transaction online. Currently, employees contribute money and volunteer time to over 10,000 organizations.

"In 2001, we would like to make the site available to all of our clients and eventually to anyone that wants to use it," says Losi.

Chandler points out that emergency funds for employees are also good for morale. In today's world of company employee's in the thousands, chances are some philanthropy is needed in-house. Many single income families struggle to make ends meet.

Philanthropic trends in the new economy will continue to grow.

"I think that new economy companies and grass-roots nonprofits are kindred spirits. They are both new and they lack the brand recognition old economy companies take for granted," Chandler states. " Trends that have emerged in recent years with new companies include "click and give" programs and an increasing number of people are donating to school service projects."

When dealing with the business of philanthropy, Chandler cautions businesses from emphasizing outcome measurements by saying, "How can you quantify the value of feeding the hungry or teaching a child how to read?"


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