Philanthropy: How to get a better payback

Local, close-to-home concerns resonate with consumers, so companies should plan their philanthropic efforts accordingly.

(Photo: 2011 Corporate Challenge/Flikr)

When part of the roof of the Algo Centre Mall in Elliot Lake, Ont., collapsed in June, killing two and devastating the town, it made sense for Canadian Tire stores across the province to help the residents. The retailer’s Jumpstart program aims at just this type of local, targeted giving: 100% of the program’s funds go back to the community or region where they’re raised. Jumpstart causes don’t need to make national headlines, either. When a playground burned down in Toronto’s High Park, local stores collected $50,000 in donations to rebuild it.

A cause with a tangible impact on consumers often resonates more than traditional “chequebook philanthropy” consisting of a simple cash donation to a large charity. “An iconic brand, one that participates in the community, is looked upon with respect,” says Paul House, CEO of Tim Hortons, which has focused its charitable giving on local needs such as children’s camps, of which it now has six.

That view is reinforced by a recent international study. It found that while many consumers claim to care about broad, global issues such as sustainability, they gravitate toward “close-to-home” concerns such as health and food when forced to choose among charities.

That means companies that adopt big-picture causes must work harder to get a return on investment for the brand, says Chris Jarvis, co-founder of Realized Worth, which develops employee volunteering programs. “You can say Royal Bank is about water,” says Jarvis, referring to the bank’s multi-year water stewardship program. “How many Canadians feel their water is in jeopardy? [They] have to spend time and money educating customers on why it matters.”

It helps if the cause has a clear link to the company’s business. John Miziolek, president of Toronto-based branding firm Reset, says firms that simply donate money to cancer foundations without showing consumers why it matters to them are missing an opportunity. “If there’s no connection between company and cause, Canadians can see that.” Businesses are best served by choosing something that echoes the brand personality. Becel, for example, does a great job of associating itself with heart health through initiatives like the Ride for Heart, he says. “It’s not just sponsorship: it’s ingrained in that brand.”