Small-Business Guide
Despite Struggles, Entrepreneurs Find Ways to Give Back
By JIM WITKIN
Published: September 15, 2010
The economic slowdown that started in 2008 affected just about every aspect of Gumas Advertising's business — including the company's long-time support for charities in the San Francisco area. "In good times, we did not have to scrutinize our charitable giving or employee perks," said John Gumas, the company's president. "But in these economic times, we've really had to think through what we could afford to give and still be able to make a difference."
Michele McDonald for The New York Times
Larry O'Toole founded Gentle Giant, a moving company that collected medical supplies for Haitian earthquake victims.
Quick Tips:
When cash is tight, give time, services or products.
Use the opportunity to build relationships with important contacts and references.
Make sure the charity qualifies for tax-exempt status by reviewing its I.R.S. Form 990.
Create opportunities to allow employees to volunteer time and expertise.
Combine your efforts with other businesses or service organizations to multiply your impact.
Suggested Resources:
The Better Business Bureau Wise Giving Alliance offers advice on philanthropic giving.
The Charity Navigator vets charitable organizations and community foundations.
Post a CommentBy the end of 2008, some 60 percent of small-business owners like Mr. Gumas reported that the economic downturn had affected their charitable giving, according to a study whose sponsors included The Chronicle of Philanthropy, a newspaper that covers nonprofit organizations. Tough times have compelled small-business owners like Mr. Gumas to rethink long-held business practices. But many are finding creative ways to continue their support for good causes — a practice that can have positive side effects. Here are some suggestions based on the experiences of small-business owners.
GIVE TIME AND SERVICES "We want to give back," said Larry O'Toole, founder of Gentle Giant, a moving company based in Massachusetts. "That's an important part of our company culture."
A depressed housing market has meant less demand for the company's services, which has forced it to cut back on cash donations. But with more down time, said Stephen Coady, the company's marketing manager, it has been able to do more pro bono work. In the spring a local real estate agent approached Gentle Giant about collecting donated medical supplies for victims of the Haiti earthquake. Volunteering its trucks and movers, the company collected supplies like crutches, canes, walkers and wheelchairs — filling two large moving vans over the course of two months. Gentle Giant turned the supplies over to Partners in Health, a nonprofit group based in Boston that provides medical services to the poor.
Along with supporting a good cause and bolstering employee spirits, providing the pro bono services enabled the company to build connections with important business contacts, like real estate agents, who are a frequent source of referrals. "We would do this kind of thing anyway," Mr. Coady said, "but you can also use this time to build relationships that you wouldn't have time to cultivate when you are busy."
Small businesses can help nonprofit organizations in a number of ways that may not seem obvious at first, said Christine Marquez-Hudson, the executive director of Mi Casa Resource Center, a nonprofit human services group that helps Latino families in Denver. For instance, Mi Casa called upon a multicultural marketing agency, The Idea Marketing, to create brochures and other marketing materials. When the firm recognized that Mi Casa would also need a cost-effective way to distribute this material, it helped negotiate discounts with one of its suppliers for printing and bulk mail services. "They have the clout and volume of business to get these discounts that we couldn't get if we approached the vendor directly," Ms. Marquez-Hudson said.
GIVING AND OUTREACH Trevor Dierdorff, owner of Amnet, an information technology company in Colorado Springs, has continued to support the Humane Society and the local Veterans Day parade, but he said, "we've had to be more selective this year."
Before the recession, Amnet spent money every year to entertain crucial customers on expensive golf outings. The company also contributed time and money to several local charities. When the economic crunch hit, Mr. Dierdorff looked for creative ways to combine these efforts.
He had been making cash donations to a local charity, but this year saw the opportunity to use his donation to become one of the sponsors of the charity's annual golf tournament. As a result, not only did Amnet gain visibility, but it also received a round in the tournament that Mr. Dierdorff plans to use to entertain clients.
REBUILD EMPLOYEE MORALE While layoffs and shrinking budgets can take a toll on morale, Mr. Gumas said, getting employees involved in pro bono projects can rebuild enthusiasm.
His advertising company has designed marketing brochures, TV commercials, billboards, and print ads for the San Francisco Giants Community Fund, a nonprofit organization that works with underserved youth in the areas of education, health and violence prevention. Mr. Gumas's employees take part in many of the fund's events. "It gives us all a rallying point," he said, "and as tough as things are, we are reminded how lucky we are compared to the next guy."
Research has shown that the most successful company-run volunteer programs allow employees to select the causes they support, said Dr. Dwight Burlingame, who is director of academic programs for Indiana University's Center on Philanthropy. Nonetheless, he suggests that you make sure your small business organizes these volunteer days on behalf of the employees. The most effective morale builders, he said, were programs "organized by the company, especially where there's a company match of time or money and the company provides recognition for the volunteers' efforts."
TAKE THE TAX BREAK Amnet used to offer a discounted rate on information technology services for nonprofit organizations, a practice that helped the nonprofits without affording Mr. Dierdorff any tax benefits. When the economy worsened, he decided to eliminate the discounted rate for nonprofits. Instead, he now charges the standard rate but then donates the equivalent of the discount back to the organization in cash, which allows him to take the tax deduction.
FIND A PARTNER Joining forces with other organizations can compound your impact. If you belong to a local service club like the Chamber of Commerce, Lions or Rotary, look for ways to partner with them on their outreach efforts.
For example, said Rick Wells, chief executive of the San Rafael Chamber of Commerce in California, if cash is tight, "the local business can volunteer employee time, help with logistics, or donate products and services which can be given away as raffle prizes." Donating products, he noted, can also help the business clear out excess inventory.
Like so many companies, Dairy Specialists, which designs, builds and supplies commercial dairies in Colorado, has had to trim its work force. But when the decline in revenue put a squeeze on the company's long-standing college scholarship program, Robert Brown, the company's chief financial officer, went looking for partners. He found many of the businesses that served the same agricultural community were receptive to donating matching funds. "If you can't do these things on your own anymore," Mr. Brown said, "look to some of your bigger business partners to help you."
REVIEW YOUR STRATEGY "Businesses are bombarded with requests for contributions," said Sandra Miniutti, vice president of marketing with Charity Navigator, a nonprofit organization that tracks public charities. "It's important to have some standards in place."
This is also a good time to review the strategic purpose of your philanthropy, said Scott Hauge, president of CAL Insurance, a San Francisco-based agency. Developing a philanthropy "playbook," he said, makes it easier for you to stick to your mission and keep it aligned with your business goals.
While many small businesses are learning to do more with less, said Mr. Gumas, giving to good causes will always be the right thing to do. He subscribes to a karmic view of the business cycle. "When you are doing the right things for the right reasons," he said, "good things will come of it."
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