Compassionate Companies Contribute to Their Communities By Chelse Benham

“The fragrance always remains on the hand that gives the rose.” Mahatma Gandhi, 1869 -1948

Each year the holidays bring about contributions from galvanized individuals and companies determined to make a difference in the world. At The University of Texas-Pan American, Sylvia Aldape, director of Stewardship and Special Events for the Division of External Affairs, has helped to bring joy to a small town in Mexico for the last six years. Aldape and 50 other family members collect small used or new toys and other items to include in holiday gift bags that are distributed to 200 children in Queretaro, Mexico.

“It is exciting not only to see the kids playing with their toys that day and in the plaza the next morning, but also to see how people at work have gotten involved,” Aldape said. “Some people I work with at UTPA who do not have kids even go out and buy new stuff for the bags.”

Not everyone can contribute their time and energy to a cause and instead some people give money to special causes and charities. However, many people do not know what charities to give to and how their donation dollar is spent.

A recent survey on charity telemarketing fraud conducted by the American Association of Retired Persons (AARP) revealed that U.S. residents receive more than five charitable solicitations per week through the mail and via telephone. During the holiday season, when charities receive almost 40 percent of their yearly contributions, these solicitations are expected to increase significantly. The survey found that more than two-thirds (67 percent) of respondents were not confident that the caller "really represents the organizations they say they do." Forty percent of survey respondents said that they were "not at all confident" that the caller was legitimate and 57 percent admitted that they never asked how their donation would be spent.

Too many people make donations without asking the right questions according to Charlie Mattingly, president of the Louisville, Kentucky Better Business Bureau. Some charities that solicit by telephone and direct mail use professional fundraisers which may retain up to 80 percent or 100 percent of funds. Mattingly suggests donors should ask charities how much of their money will go to fundraising costs.

A study by the Boston College Social Welfare Research Institute predicts a “golden age of philanthropy” by 2052. The institute estimates that a staggering $41 trillion will pass to heirs with six trillion to $25 trillion winding up in charity coffers. Charities large and small want a “piece-of-the-pie” and may take

advantage of donors’ generosity by misrepresenting themselves and their level of actual contribution for a specific cause.

Renata Rafferty, a donors’ philanthropic planning consultant in Riverside County, California and author of “Don't Just Give It Away: How To Make the Most of Your Charitable Giving” (Chandler House Press, 1999), advises people to stop being reactive in their giving and become proactive. Rafferty recommends the following:

Identify how you want to make a difference. Do you want to save the environment or starving children?

Decide how broadly you want to help. For example, do you want to donate a computer or build a computer center?

Choose a home base for your philanthropy – your current town or where you grew up.

Determine the level of philanthropy risk you are willing to assume – do you invest in blue chips such as the American Red Cross, or in a small, start-up that may stretch your money?

Check out the groups you find. Ask the right questions and expect the right answers.

At www.charitynavigator.org more than 1,750 nonprofit groups are listed and evaluated. The American Institute of Philanthropy (AIP) is another charity watchdog organization that grades some 400 charities in 37 categories. It offers some valuable tips for charity giving.

Check credibility of the charity with the above online resources. Another watchdog organization is the Wise Giving Alliance. It provides a list of government offices by state that register charities.

Look closely at the charity’s name. Charities often sound alike such as the National Children’s Cancer Society and the National Childhood Cancer Foundation, but not all charities are equal or have the same standards.

Do not give cash! Write a check or pay by credit card to the charity, do not write a check to the name of an individual who is collecting the donations.

Determine the purpose of the charity. Make sure it does what you think it does. For example some charities work for a cure to a disease while others care for those suffering from the disease.

Find out if your donation is tax deductible. If an organization is tax exempt, it (does not pay taxes) doesn’t mean your donation is tax deductible. Ask the charity directly if your donation is tax deductible and get their tax exempt number.

Find out what percentage of your donation goes toward the charitable purpose (versus to the running cost of the organization). The phrase “All proceeds go to charity,” is misleading. This means that all money left over after expenses goes to the charity and that may be a very small amount.

Never feel pressured into giving. Be proactive not reactive in your giving. If a person gives you a sales pitch reconsider giving.

Look for the charity’s physical mailing address and telephone number. Don’t get sucked into an Internet “charity” that exists only on the Web.

Low on cash, but still wanting to make a difference? Give gifts of support. The Hunger Site or EcologyFund.com allow creative options to giving.

Americans feel that companies should be large contributors to charitable organizations. The 2001 Cone/Roper Corporate Citizenship Study found that almost eight in ten Americans today (79 percent) believe that companies have a responsibility to support causes. The study emphasizes that Americans expect companies to adopt this social role regardless of the economic climate. Almost nine in ten Americans (88 percent) say that during an economic downturn and period of tighter consumer spending, it is important for companies to continue supporting causes.

“More than ever, Americans want to know about companies’ corporate citizenship efforts, and they will form opinions of a company’s brand and reputation based on those efforts,” according to Carol Cone, CEO of Cone, Inc., a strategic marketing communications firm and co-author of the Cone/Roper Report used by the marketing profession and media to evaluate the importance of brand marketing.

According to Cone, “Cause-Related Marketing” is a powerful positioning discipline used to enliven brand equity and enhance corporate image with significant bottom-line and community impacts. She calls this emerging business practice “Cause Branding.”

Cause-related marketing doesn’t just have the potential to boost your sales and benefit a worthy cause. It can do wonders for employee morale, influence public opinion of your company and instill your brand with poignant qualities that can be played up in image campaigns and advertising. In order for the public to know about your cause-related support you have to inform them that you are doing it. For example, Home Depot is known for their support of Olympic athletes, Dannon Yogurt for breast cancer awareness and Paul Newman’s food products

sales go to charities. In fact, the Newman's Own brand is now two decades old, selling 77 different products in markets throughout the English-speaking world.

"In 2002," Newman writes, "our gross sales were $110 million, with an after-tax profit of $12 million, which we distributed to over 200 charities."

Charitable contributions have a significant place in communities. There is always room for more donations, support and individual contributions. Giving helps the world go around and all who are in it a bit better off. Taking the time to evaluate a charity and ultimately supporting one of your choice increases your loyalty to that organization and its intrinsic value to the community. It’s a win-win situation.

“It is every man’s obligation to put back into the world at least the equivalent of what he takes out of it.” – Albert Einstein