filter by tag: economy

With all the chatter about the ups and downs of charitable giving during the down economy, it’s refreshing to hear some definitive - and positive - news. According to the 2009 Giving in Numbers Report, released this week by the Committee Encouraging Corporate Philanthropy (CECP), corporate giving was actually up during 2007-2008, despite worries that corporations would back down from charitable commitments as the economic turmoil raged in the second half of the year. What’s more, the data show that companies got creative when the economy started to sink, opting for pro bono work and skills-based volunteerism instead of simply backing down from their social commitments. In fact, the Wall Street Journal this week profiled how four chief executives at leading companies are rethinking their philanthropic strategies.

Other key findings from the CECP report include:

• A majority (51%) of companies surveyed increased giving from 2007 to 2008 despite 68 percent experiencing profit declines
• Among Fortune 100 companies, who experienced greater-than-average profit declines, 60 percent increased giving from 2007 to 2008
• Of companies surveyed, a full 91 percent report having an employee matching-gift program
• Ninety-four percent of survey respondents have at least one formal domestic volunteerism program and 49 percent of respondents have at least one formal international volunteer program
• The median number of pro bono time donated was 1,080 hours by companies that reported having such programs
• Consistent with past years, 86 percent of companies report having a corporate foundation

To download the full report for free, visit CECP’s Web site.

It’s the little things that count - when you add up the small efforts of many, they can create real change. As consumers, we adopt simple behaviors that can make a collective difference; turn off the faucet, pick up a piece of trash, buy a product that donates to a cause, recycle a soda can. When times are tough and cash donations are in short supply, how can companies adopt this concept to make a difference in society?

While cash remains critical to any nonprofit’s ability to fulfill its mission, this recession has led to innovative examples of companies leveraging assets, beyond cash, to solve social problems. Patrick Rooney, executive director of the Center on Philanthropy at Indiana University notes that many companies wanting to conserve cash have shifted from financial donations to in-kind contributions – taking a little and making it into something bigger.

Some companies offer employees a few hours time to volunteer for nonprofits, which combined can amount to hundreds of hours in professional services otherwise unaffordable. Others are donating new or unused materials that meet the needs of nonprofits, which when taken collectively can have big results.

In an interesting new approach to in-kind, a group of airline financiers has established a program called ISTAT AirLink that allows easy donation of unreserved airline seats and cargo space to causes who need to get volunteers and supplies abroad. The program brings together several airline carriers with excess space, offering valuable resources to nonprofit organizations.

A key part of this program’s success is the centralized organization, which allows aid agencies to list people, medicine and supplies they need shipped on a Web site, and permits airlines to post spare seats or cargo space. The result; nonprofits get people and resources on the ground, and companies are able to put to harness space which would otherwise be vacant. There is small added investment for the airline – extra cargo handling or passenger service – but the benefit to the nonprofit is huge. As airline financier and founding member Bob Brown notes, "If we can save an NGO a dollar in cost, that should flow right through to the people they're serving."

What excess capacity does your organization hold, and how can it be put to use for the greater good?

As the economy struggles to rebound, it’s inspiring to see the number of organizations, programs and projects dedicated to social and environmental issues continue to multiply. This week alone, Macy’s, Nestlé Pure Life, Kmart and PNC all announced new campaigns or projects:

• Macy’s is kicking off a star-studded campaign encouraging consumers to host a dinner party and donate money to Feeding America in lieu of the traditional host gift.
• Nestlé Pure Life is encouraging families to adopt new, healthy habits with ongoing efforts within its Pure Life/Best Life campaign.
• Kmart has partnered with TIME for Kids to develop a curriculum that teachers and parents can use to help teach kids about managing money.
• PNC announced the installation of North America’s largest soil-based living wall on the exterior of its Pittsburgh headquarters, enhancing it's existing efforts to be a world leader in green building.

The economy can be good, bad or downright ugly, but no matter because doing good has staying power. Goodness builds trust, trust fosters reputation and reputation drives sales. What’s more, 78 percent of consumers expect corporate contributions to social and environmental causes to remain the same or grow, indicating it’s more important than ever to be committed to the greater good in order to stay relevant and profitable. Stated simply - perseverance pays.

In Cone’s recent nonprofit brand report, we encouraged organizations to consider adopting “New Currencies” as an essential element to help boost their brands.  These alternative forms of philanthropy include non-cash support such as in-kind donations, pro bono service and skilled volunteerism.  Every organization needs dollars-in-hand to fulfill its mission, but when the financial resources of companies and consumers are dwindling, savvy nonprofits recognize the value to be found in more creative tender.  These currencies allow organizations to expand the scope of sponsorships and engagement opportunities, and foster relationships even when traditional financial contributions are waning.  At a time when the nation is flush with volunteers – according to a new study from the Corporation for National and Community Service, Americans donated 8 billion hours of volunteer time in 2008 – this trend likely won’t reverse even when the economy recovers.

The Center on Philanthropy at Indiana University found these philanthropy vehicles to resonate particularly well with Gen X donors.  Citizens in their 20s and 30s are more interested in social advocacy and engagement philanthropy and are more likely to want to work directly with organizations instead of just donating money.

The future landscape of philanthropy will include the next generation of not only high net-worth donors, but high-engagement contributors who want to offer their skills and engage in a more meaningful way.  As this shift occurs, nonprofits will need to prepare to accommodate this influx, including establishing the necessary space, guidance and structure for eager volunteers, a challenge many organizations are already experiencing.  Yet, for this effort comes the reward: the valuable assets skilled volunteers can provide include legal advice, IT support and consulting services, to name a few.

Social media engagement and public service have been cornerstones of President Obama’s candidacy and administration. Merging these two, this week he announced a summer volunteerism initiative (June 22-September 11) called “United We Serve.” The program asks Americans make service a part of their daily lives and to help supplement the federal government’s investments in core areas of the recovery agenda – healthcare, energy independence, education and community and economic renewal. Obama is calling for cross-sector collaboration to bring this initiative to life. He says, “We need community organizations, corporations, foundations and our government to be part of this effort.”

At serve.gov, prospective volunteers can easily search for opportunities in their own communities, and the site provides turn-key tools to share experiences via their existing social networks (see this week’s article, “Hello? Arkansas? Yeah it’s Facebook.” for an example of the power of social networks in action). The search tool is integrated with the open-source Web project hosted at AllforGood.org, which was designed by technology and nonprofit partners and is fueled by the nonprofits, volunteer service listing providers and companies who submit volunteer opportunities to the site. This is certainly not the first volunteerism site or aggregator, but the cross-sector collaboration it will take to make it a success is compelling.

The “United We Serve” campaign serves as an example of how the government, nonprofit and for-profit organizations can, and should, come together to encourage positive civic behavior and better address pressing social and environmental concerns.

Business leaders who hold traditional beliefs about the role of business in society continue to use the economic crisis to espouse their conviction that the primary responsibility is to do well, not good. In their recent BusinessWeek column, Jack and Suzy Welch argue just this. It’s not as one-sided of an argument as we often see, but the point is clear: profit begets purpose, not the other way around. If a rash of new M.B.A. programs is any barometer, however, fresh thinking is on its way in.

Case in point—a story this week about Harvard Business School’s creation of “The M.B.A. Oath.” This promise “to serve the greater good” was organized by students and 20 percent of the program’s 2009 graduating class has opted to take it. Student advocates of the oath hope to establish a formal code that all future graduates will be required to uphold, similar to the Hippocratic Oath for physicians or the pledge taken by lawyers to uphold the law and Constitution.

M.B.A. professors, too, are recognizing the shift in attitudes among today’s students, and schools have ramped up courses and created new centers focused on ethics and corporate responsibility to satisfy the increased demand. Business school professors agree “they are seeing a generational shift away from viewing an M.B.A. as simply an on-ramp to the road to riches” and are viewing “business as more than a money-making enterprise, but part of a large social community.” This trend shows that future leaders may well care about more than just profits, and feel a stronger sense of responsibility for the good of society.

It’s not just corporate responsibility seeing this shift in thinking. Enrollment in climate-focused M.B.A. programs is surging, graduates are opting for careers in community organizing and public service agencies such as Teach For America and the Peace Corps are experiencing a swell in applications. In fact, research shows that M.B.A. students are willing to sacrifice an average of 14.4 percent of their expected compensation to work for a responsible company.

There is little doubt that corporate America’s attitudes will shift even further when these graduates become leaders. Dare we predict consumer perceptions of corporate America will follow?

Tide may be going back to cause marketing basics, but it has also upped the ante considerably for consumer packaged goods cause promotions in the grocery aisle. The detergent brand recently announced that, at least for a limited time, it will give its bottle a complete overhaul, including a special yellow cap and imagery to support its cause marketing program, “Loads of Hope.” This is the most radical change to its packaging in its 60-year history, and it is the next evolution in Tide’s cause marketing program which helps families affected by natural disasters.

Cause marketing efforts are proliferating online, but it is nice to see that on-pack and in-store messaging has not lost its luster. It is a proven way for companies to connect to consumers at point-of-sale and to reward them with an effective dual benefit: a do-good feeling even as they shop for everyday staples.

Other cause marketing fundamentals that are resonating as consumers weather today’s tough economic climate:

• Coupons (example: Jiffy Lube’s* “Maintenance Partners for Life” program with the American Heart Association*)
• Turn-key engagement opportunities (example: Betty Crocker’s* “Stirring Up Wishes” program)
• Tangible impact (example: Disney’s buy-a-ticket, plant-a-tree promotion)
• Basic needs, with a twist (example: Campbell’s “Help Grow Your Own Soup” program)

*Cone clients

As we seek to develop new marketing communications solutions for nonprofits in today’s climate, fundraising will take a front seat across the board. Carefully consider the following tips to help boost your nonprofit’s recession resilience in 2009.

1. Focus on individual giving: The largest portion of overall fundraising during recessions (80%) comes from individual givers, according to COP. So nurture your loyal donors and make sure they know just how important they are to you.
   
   
2. Curtail or re-purpose large galas or costly events: Consider creating lower-tier ticket opportunities for existing galas; swapping costly events for smaller, mission-aligned gatherings; or seeking donations “in lieu of event” for a targeted list of urgent, micro-philanthropy needs.
   
   
3. Avoid spending too much time and energy on engaging new corporate support: Five percent of fundraising comes from corporate support, which on average declines 1.5 percent in times of economic recession, according to COP. So, focus on servicing, communicating with and adding value for existing corporate supporters to maintain or grow current funding rather than seeking out new partners who may not be able to fund new beneficiaries.
   
   
4. Cut back, but do not eliminate, direct mail: Direct response fundraising makes up close to 60 percent of giving, according to the Direct Marketing Association, and COP reports that 62 percent of organizations surveyed reported gains over time using direct mail. To lower costs, consider paring down your contact list to active donors and continue to contact them. Bolster e-fundraising: For cost-effective communication vehicles, you can’t beat the Web. Consider transitioning important acquisition strategies to less costly e-fundraising techniques versus direct mail, moving select fundraising transactions online or creating “pledging” opportunities for individuals to give over time.
   
   
5. Create turnkey fundraisers: Inspire your donors to co-create fundraisers with you to reduce costs or create simple offline or online auctions. Also, try to seek gifts in-kind to bolster net proceeds.

Anne Erhard, Vice President 

Citizen volunteerism is growing at a rapid rate, fueled by the poor economy, President Obama’s public call-to-service and allocation of stimulus dollars to government-funded service programs. But the time is also right for a surge in corporate volunteerism.

We know employee volunteerism is a valuable way for companies to give back to their communities and boost morale among employees, and a new study released by the Taproot Foundation’s Pro Bono Action Tank (PBAT) and the Committee Encouraging Corporate Philanthropy (CECP) provides a helpful standard for companies to better measure their contributions.

This valuation, of what can be an ambiguous line item for businesses that aren’t professional services firms, may provide the incentive they need to send more employees to serve their communities. The standards will allow corporations to more accurately track and report the value of pro bono services as cash equivalents, according to Charles Moore, executive director of the CECP.

As the old business axiom goes, what gets measured gets done.

The Salvation Army’s annual holiday fundraising drive, with its iconic red kettles, hand bells, and volunteers in Santa suits collecting change, seemed to defy the odds this holiday. Despite a retail season with lighter foot traffic and pockets with fewer coins to spare, the Salvation Army reported record fundraising in 2008, bringing in $130 million.  That’s 10 percent higher than 2007, which represents the largest one-year jump in revenue growth in more than a decade. With the economy on the brink of a meltdown, how did the Salvation Army achieve record-breaking fundraising?

It innovated. The Salvation Army stretched pocket-change fundraising to new heights, elevating its strategy to a multi-channel, highly engaging program.

First, it recognized the power of younger donors and sought them out where they were already plugged in- online via social networks and through their mobile devices. The 2008 program included the ability to donate online, to spread the word via social networking sites and to download an iPhone application specifically developed for the campaign. Other high-tech advancements in the signature red kettle collections included regional testing of “cashless kettles,” which accepted credit or debit cards and “mobile giving,” which allowed consumers to text donations from their cell phones.

The Salvation Army leveraged these online capabilities and went viral by providing turn-key online fundraising toolkits and incentivizing consumer participation. The Online Red Kettle Campaign provided tools such as email templates and widgets and featured the top fundraisers on its Web site. Internet giving alone brought in $10 million in 2008.

At the same time, the organization stayed true to more traditional means of fundraising and awareness by engaging the teen-idol band the Jonas Brothers, leveraging several corporate partnerships including Wal-Mart and Target and never forgeting its volunteer base of 25,000 on-site bellringers.

Research shows that consumers are generally giving the same this year but to fewer organizations.  By mixing traditional fundraising tactics with new digital approaches, the Salvation Army was able to tap those with money to give and came out of the season further ahead than ever before.

For more fundraising tips beyond the holiday season to use throughout 2009, read our latest article, Fundraising Remedies for the New Economy.

A new report confirms short-term price cuts do little to breed customer trust or loyalty. In fact, the Yankelovich poll says, they can actually be damaging to your brand. Seventy percent of respondents said that price cuts probably mean the brand is overpriced to begin with or the company is just trying to move old product. “People are suspicious if you significantly discount your brand,” explained J. Walker Smith, president of Yankelovich Monitor. “If you make significant changes in your value proposition it can confuse them. You have to give them reasons to buy stuff as opposed to just lowering prices as a knee jerk reaction to the economy.”

But how can companies appeal to penny-pinching consumers who, at the same time, are seeking greater value? Forbes reports on several alternative ways companies are helping recession-weary Americans get back on their feet:

• FedEx, hoping to help those affected by layoffs, offered to print 25 free resumes for customers looking for a new job
• Hyundai offered to buy back cars purchased before a layoff
• The New Jersey Nets offered free tickets to unemployed fans who posted their resume to the team’s online job site
• JetBlue is refunding tickets for customers who lose their jobs after booking flights
• CitiMortgage (subsidiary of CitiGroup) offers three months of reduced mortgage payments for newly laid-off borrowers
• Various restaurants are running “Pink Slip” promotions, including Laiola Restaurant in San Francisco who offered a free meal to anyone who was recently laid off

Rather than slashing prices across the board, these companies are zeroing in on opportunities to show they care and to make life a little easier for consumers. For their effort, they will reap the reward of having a loyal customer base once the market turns around. Consumers who take advantage of companies’ generosity in their time of need are likely to return when they do have money to spend.

Have you seen other examples of companies stepping up? Tell us about it!

Business and consumer news could hardly be more grim, but corporate environmental efforts seem to be coming through relatively unscathed. Companies are maintaining their investments and consumers continue to buy.

So why is “green purchasing” proving so resilient?

Three driving forces:

• Small Change – Companies are providing easy, cost-effective opportunities for consumers to make a difference through everyday purchases and activities (e.g, Marriott’s “Celestial Seasonings Trees for the Future” and the ongoing success of Clorox Green Works).
• True Value – Consumers evaluate much more than price when determining a product’s “value.”
• EcO-bama – The Obama administration’s continued attention to environmental policies and green stimulus spending have brought complex environmental issues into living rooms across America.

Trendspotting.com also lists 12 of its own eco-trends fueling today’s “eco-bounty” in its latest trends report, but we want to know what you think. Why does consumer environmental purchasing continue to grow despite the economy? Vote in our poll, located on the blog sidebar, and share your thoughts on what is motivating consumers to shop with the environment in mind even as they pinch pennies.

Economy does not eclipse environment. It’s not a tongue-twister; it’s the very real, very encouraging takeaway from Cone’s newly released research, the 2009 Cone Consumer Environmental Survey. The brief survey explored the environmental attitudes and shopping behaviors of American consumers during today’s economic crisis and found that American interest, shopping habits and expectations of companies to act responsibly have not been blunted by the state of the economy. Key findings include:

• Purchasing: 34 percent of American consumers indicate they are more likely to buy environmentally responsible products today, and another 44 percent indicate their environmental shopping habits have not changed as a result of the economy
• Interest: 35 percent of Americans have higher interest in the environment today than they did one year ago
• Expectations: 35 percent of Americans have higher expectations for companies to make and sell environmentally responsible products and services during the economic downturn

Another key takeaway: Even if they are not buying today, consumers are still holding companies accountable for their sustainability efforts over time. A full seven in 10 Americans say they are paying attention to what companies are doing regarding the environment today, even if they cannot buy until the future.

As Andrea Learned states on her blog, “Don’t assume your brand can give up on ‘green’ to ride out these tough times. If your customers are sticking to their environmental ways through thick and thin (or at least trying very hard to so do), they’ll expect you to do the same.”

Please click here to access the complete 2009 Cone Consumer Environmental Survey release and fact sheet.

To see Cone’s past consumer environmental research, including the 2007 Cone Consumer Environmental Survey and the 2008 Green Gap Survey, please visit www.coneinc.com/research.

Ethical Performance (subscription required) reports that layoffs among corporate responsibility professionals have begun to trickle in as JPMorgan, Citigroup and the global law firm Eversheds integrate their functions and make some of their lead CR posts redundant.

For a growing number of companies, however, corporate responsibility continues to prove recession-proof. Fortune reports this week that despite harsh financial realities, many major companies, including Intel, PricewaterhouseCoopers, Wal-Mart, GE and Starbucks have no plans to abandon their commitments. Intel, for example, saw its stock price fall 42 percent in 2008 and had a weak fourth quarter, but pledges to continue its green investments and its commitments to global education programs in 2009, including the recent launch of the “Small Things Challenge,” an investment of up to $300,000 in education and development in a number of countries. “You can’t save your way out of a recession,” says Intel chairman Craig Barret. “You have to invest your way out.”

A long-term vision and a refusal to allow today’s short-termism to hamper progress and future sustainability may be the driving force behind these decisions. As GE’s chairman and CEO Jeff Immelt explained at the BSR conference last November, “When we come out of this fog, this notion that companies need to stand for something – they need to be accountable for more than just the money they earn – is going to be profound.”

 What do you stand for?

We’ve commented over the past few months about why and how cause marketing is an increasingly valuable strategy to drive consumer trust and loyalty for companies as the economy worsens.  No doubt it remains a win-win strategy for nonprofit organizations, as well.  Cause can dramatically increase sales (resulting in funds for both the corporate and nonprofit partners), but its power to drive awareness may be even more feasible and enticing to nonprofits right now.  In a recent news blurb (“’Idol Gives’ The Donations – Finally,” January 1, 2009), The NonProfit Times reports that American Idol Gives Back, the highly publicized cause effort in which millions of viewers helped raised more than $64 million in 2008 for several charities, has finally awarded the donations to the organizations, a full six months later.  What struck us about the article, however, is not the time it took to allocate the money, but this quote by Malaria No More’s communications director, “The exposure on American Idol is invaluable for a disease like malaria…You can’t put a price tag on the ability to educate more than 30 million Americans about a crisis halfway around the world in the context of their favorite TV show.”  He concludes, “We were flooded with interest and support.”

Unfortunately, Malaria No More and the other nonprofit recipients won’t have the benefit of such a forum courtesy of American Idol this year.  It has been reported that Idol Gives Back won’t air this season, likely as a result of the recession.  Beyond the millions of dollars raised directly, the decision is also disappointing because it takes away a powerful outlet for awareness-building for several worthwhile organizations.  Here’s why:

Cone’s research confirms that upon learning about a corporate-nonprofit partnership, 42 percent of Americans are more likely to tell a friend about the charity, 36 percent are more likely to donate money, 29 percent are more likely to participate in the charity’s programs and events and almost a quarter (23 percent) are more likely to volunteer.  Shopping aside, the exposure that cause marketing programs bring to nonprofit organizations and social and environmental issues is tremendous.      

Let’s hope American Idol reconsiders its decision in 2010, and in the meantime, others step in to be a voice that can help deliver both funds and awareness for nonprofit organizations addressing critical issues.

The GE Foundation just announced  that it will shift its philanthropic focus in 2009 toward meeting basic needs. The company will redirect $20 million dollars, a fifth of its total giving, to feeding, clothing and providing shelter for people in need. What’s more, GE is engaging its employees in the effort by increasing its match for employee contributions up to two-to-one if they are giving to organizations meeting basic needs in their communities. 

http://www.ge.com/citizenship/index.jsp

Although the issues from which the money will be diverted will no doubt feel the pinch, GE is taking a bold position in fulfilling its social contract by tailoring its philanthropy to those areas where it sees the greatest immediate need, while maintaining its existing commitments where possible. The announcement brought to light Cone’s recent prediction that companies will move their giving toward local causes and basic needs as they strive to support the communities in which they have a presence during tough economic times. Companies continue to invest in issues core to their business success, while also recognizing the need to meet social needs as they arise. It's about being focused, but fluid.  Leadership companies with strong values understand their obligation to make good on both ends. 
 
The evidence indicating companies have no intentions of giving up on their commitments to society in 2009 is plentiful, but as GE has shown, the approach, priorities and objectives are likely to change. To see Cone’s complete article on how companies will sustain their cause initiatives in the new year, please click here . 

I always remember breakthrough articles related to cause. While few and far between they provide tremendous inspiration to me and many of  my colleagues, clients and friends.

Six years ago, Geoff Colvin at Fortune wrote a full page editorial about the power of causes on employee commitment and morale. In November 2004, Marc Gunther, also at Fortune wrote Money and Morals at GE, about the new values-based culture CEO Jeff Immelt was instituting to inspire green-related innovation as well as an enticing workplace for the emerging millennial generation. 

This week came Jonah Bloom's editorial:  'Recession Provides a Chance to Build a Better Capitalism.'  Better capitalism reported by AdAge?...I read it with vigor. 

Here is his critical point: conspicious consumption is no longer a sustainable answer to our lives.  We already have enough. Building brands for tomorrow can and should embrace a different type of capitalism, one that incorporates society and the environment into emerging businesses as well as established ones.

Bloom talks about the opportunity in 2009 and beyond for marketers and their agencies to harness and reflect the mood of the country --  that voted for change--  to advocate 'for a new era in business where companies and products are analyzed, valued and attract investment based on a range of metrics that reflect the challenges of the world we live in..' As well they take new approaches to branding, marketing and sales that build in sourcing, operations, and product/service functionality that just makes sense to a new type of consumer, ones that desire to share their values with the businesses they buy from and work for...

This is so so very exciting to hear from AdAge.

For those of you who have followed Cone and our work since the early 80's, we have always advocated for business to bring their values to life through authentic and sustainable engagement with social issues. Now a quarter of a century later, with our world upended, for this philosophy to become the norm, rather than the exception, is encouraging for our people, planet, our communities and our children's futures.

Jonah ends his editorial with this commentary:  'Next year we will have a chance to wean ourselves off the crack of consumption at any cost to our brands and our planet and instead focus on profitability, sustainability and social responsibility.  Maybe next year can be the start of something good, a different take on commerce...'

This year we went through a robust discussion of Cone's future as a strategy and communications firm.  After much discussion we settled on something we felt was just right:  Our firm's vision: Better Business. Greater Good.

My New Year's wish is that we all answer this call.  Our collective futures may depend on it.

Thanks Jonah for this invaluable commentary.