Recently, a dozen of Nevada’s executives gathered at the office of Holland & Hart, LLP to discuss corporate philanthropy with regards to Nevada’s historically low philanthropic activities, how nonprofits are weathering the economic depression and what needs to change in corporate philanthropy. Connie Brennan, publisher of Nevada Business, served as moderator for this monthly event that brings leaders together to discuss issues pertinent to their professions. Following is a condensed version of the roundtable discussion.
Lack of Involvement
Participants agreed that most of the support garnered by nonprofits comes from a handful of companies. Many of Nevada’s most generous companies were represented at the roundtable.
Steve McCracken: The number one reason why people don’t get involved is they’re not asked to. The second reason is they don’t know where to start.
Jay Hiner: The community thinks that you have to donate a lot of money in order to help. They don’t consider the in-kind donations that can really help a nonprofit. Things such as furniture, clothing and school supplies are just as needed as cash.
Gina Polovina: Don’t discount volunteerism. Having a cadre of your employees to help a specific nonprofit with a event can be better than writing them a check in many cases.
Paul Stowell: Use Opportunity Village’s Magical Forest as an example, that event would never occur without volunteerism. You can give all the money you want, but they still have to staff that event, and volunteerism, is critical to an organization like Opportunity Village and many others.
Tom Warden: There’s also the leadership side of it, which is executives from different companies taking part in leadership roles on the boards of nonprofits or NGOs (nongovernmental organization). You can’t measure that in dollars, but it’s real. I would venture to say there are a couple hundred board seats represented at this table if you added them all up.
Robyn Clayton: We’re the last state for volunteerism. There’s a lot of us who are just tired of that and want to make changes in our community, we have nowhere to go but up.
Reed Radosevich: One of the issues is that it’s the same families and companies that are shouldering the burden of having to fund all these nonprofits. It needs to become more of a grassroots issue of, how do we educate, train and bring awareness to all of the successful families out there?
Stowell: If you don’t teach the younger generation, who’s going to come up and replace those of us around the table today? It goes back to the key being education and awareness.
The executives were in consensus about the nervousness permeating the nonprofit community due to a challenging economy. They agreed that many nonprofits need to modify the way they do business and some will most likely go out of business.
Merlinda Gallegos: A lot of the nonprofit agencies are overwhelmed. They’re not nearly as prepared as they thought they were for the emergency situation that many are finding themselves in. This may be a great opportunity for the nonprofit sector to rethink exactly how they’re providing services to the community. I think this is an appropriate time where we as funders challenge our partners, asking, are they being as efficient as they could be in meeting their missions?
Stowell: We cannot continue to meet the financial needs the nonprofits have, not just in this community, but across the country. Collaboration is key. Bring nonprofits, faith-based organizations and others together and you’ll be able to address more of the issues that face this community moving forward. You sit there and you say, “How can we engage someone from another company or an individual?” Put them with a mentor, put them with someone that knows the drill, understands the process, and can help guide that novice individual of getting involved in the community.
Clayton: Maybe nonprofits need to be a little more creative in looking at philanthropy and coming up with some creative solutions that don’t rely on money because in this economy, there is not a lot of extra money.
Budgeting for philanthropy under current economic circumstances has many nonprofits expecting far less in assistance than in years prior. However, the companies at the table plan to maintain their current level of giving.
Barbara Demaree: What we’re seeing is more people saying, “You know, I can’t really give financially this year, but I’m going to donate time.” Volunteerism could really increase if nonprofits could get rid of their territorialism. That way people wouldn’t feel like they are hurting another organization by donating their time to more than one nonprofit.
Ellen Schulhofer: Our budget is not going to increase, but we’re going to devote more resources pro bono. Community services are being cut and people have a bit more time as the corporate world has slowed. We still want to make a difference.
Warden: Budgets certainly aren’t going to increase at the growing rate of need.
A Lack of Business Expertise
All of the executives agreed that nonprofits would be better served if they understood the importance of running their nonprofit as if it were a for-profit entity. Their suggestions on how to achieve this goal ranged from mentoring to installing the right board of directors.
Hiner: A lot of the nonprofits really need to reanalyze their application for grant dollars. I would like to see more financial statements and ask: Who are their board members? There is a lack of business knowledge in the nonprofit world. We as corporations need to work with nonprofits; educate them about financial statements and the importance of installing solid board members.
Stowell: For eons, nonprofits have been unable to be realistic about their requests.
Demaree: I think that it goes back to the fact that nonprofits don’t have a good business model. If the nonprofit doesn’t have a clear-cut business plan and business model, we say, “Having a dream is fine, but you have to make it work. If you can’t make it work within the framework of a business, then you’re not going to last.”
Stowell: For years, nonprofits never had to think like a for-profit business. If they keep thinking and acting like a nonprofit, they could go by the wayside. They’ve got to understand they’re a for-profit business working in a nonprofit environment.
Gallegos: If you look at the really successful ones, the difference is, their board is hands-on, they have a business plan and they’ve done their research before they ever come to us.
Radosevich: I think that’s a valid point, it seems like the most successful not-for-profits are the ones who have the strongest boards, Opportunity Village is a prime example.
Stowell: If you have the leadership from the for-profit industries, then it’s going to be a strong nonprofit board because they’re going to bring those leadership skills to the board and help them think more like a for-profit business.
Demaree: Lack of business expertise is where we’re seeing a great deficiency. Listening to Bob Hart of Nevada State Bank talk one time, he said, “You know, I’d like to do more SBA loans, but I can’t fund ‘I have a dream.’”
Ellie Shattuck: Nonprofits need to learn that if you give people something for their evening that is different and unique, they will come. For a long time, organizations lived on their laurels, where all they had to do was knock on the doors and the hotels would automatically give. That isn’t the way it is today. Give people something for their money, such as recognition or something fun, and they will come.
Credit for Good Deeds
The public relations benefits associated with corporate social responsibility were discussed at length. Some executives believed they were merely a bonus, while others thought it was natural to consider them when pursuing corporate giving.
Shattuck: Corporate philanthropy should be giving from the heart not for public relations purposes.
Demaree: It’s more than public relations, it’s a sense of social responsibility for which you know you’re going to get a sense of social reaction.
McCracken: It is almost as if CSR (corporate social responsibility) is expected. If you don’t support something, then you’re conspicuously absent. To me, the public relations benefits that we’re going to get are not even a consideration.
Polovina: We’ve been doing a corporate citizenship report for six years now. We post it on our Web site, where it will tell our story and we’re proud of the story we have to tell.
Warden: Getting the profile of a community player is a business benefit. It makes business easier in all ways. The government is actually evaluating businesses based on what kind of giving programs they have and how environmentally strong they are when deciding which businesses they want to get involved with on major projects. Additionally, I hate to use the word “exploit,” but we do put out a lot of public relations on the stuff that we do. We think that kind of public relations is important; not to tell the story of what we as a company are doing, but instead, tell the story of the nonprofit and what they are doing.
Clayton: Not only is the government evaluating, but your consumers base their judgments on what you as a company are doing in the community. And yet, I would say all of us do CSR because it’s the right thing to do.
Stowell: Larry Ruvo summed it up when he said, “The more I give, the more I get.” He’s a businessman, trying to sell his product. The Cone Roper Cause Trends Report has shown year after year that, all things being equal, if price is the same by two companies, over 70 percent of consumers will do business with the more philanthropic-minded company.
Warden: Corporations need to break out of the paradigm that philanthropy is somehow an extra give-away on top of what they normally do. It has got to be part of their corporate citizenship and corporate social responsibility.
Getting the Team Engaged
The group discussed the various incentives they utilize to get their employees involved in philanthropy, from money to recognition; each company has its own way of motivating their teams.
McCracken: At Bank of America, every associate is offered two hours to volunteer each work week. They can use it however they see fit, whether it’s coaching little league, volunteering at a school or working for a nonprofit, they can use those two hours with their manager’s discretion.
Shattuck: We encourage all of our associates to participate in the marches, walks and runs and Martin-Harris matches what they contribute.
Schulhofer: We have, what we call a “karma committee” meeting quarterly, where the employees vote on what they want to do, whether it’s volunteer at a soup kitchen, family adoptions or a toy drive. It’s amazing how good everybody feels afterwards for contributing.
Gallegos: To encourage volunteerism, we have “Dollars for Doers.” Basically, it is sweat equity of $10 an hour. If you volunteer 25 to 50 hours a year, we write a check to the nonprofit you volunteered at, but we send the check to you to present to the nonprofit because it was your sweat equity that earned the check.