Practicing genuine philanthropy can help you increase sales without raising prices or diminishing the quality of your products and services. Research shows that consumers are willing to spend 6% more for products made by socially responsible companies.
Although philanthropy alone won’t create an automatic increase in sales, it’s a crucial foundation to establish. The difficulty is knowing what counts as philanthropy. Plenty of businesses discuss their “philanthropic efforts,” but not all are engaged in genuine philanthropy.
What philanthropy is, and is not
The Merriam-Webster dictionary defines philanthropy as “goodwill to fellow members of the human race,” and “an act or gift done or made for humanitarian purposes.” While this definition appears to cover any act or gift that benefits humanity, there’s a slight caveat. The act or deed must be done specifically for humanitarian purposes – not for reputation, kickbacks, or financial rewards.
Genuine philanthropy is practiced with a genuine desire to help a cause. Faux philanthropy looks genuine on the outside, but is ingenuine on the inside. Faux philanthropy is when an organization throws money at a cause for the sole purpose of looking good or gaining some kind of reward. Whenever there’s an expectation of reciprocity, it’s not genuine philanthropy.
Customers want to see genuine philanthropy
While being philanthropic is part of building a strong brand reputation, customers aren’t impressed when corporations make hands-free donations. People want to support businesses that make genuine efforts to help the world in some way. Any corporation can write a monthly check to a cause, but few are willing to get involved.
Companies that get involved in their cause are highly regarded for their efforts. For example, PosterGarden – a trade show display company – goes to great lengths to be involved in the causes they support. The company focuses on developing long-term partnerships and establishing genuine connections with every organization they support. As of 2019, they support 49 different organizations in art, dance, theater, and music. However, while they do donate a percentage of their sales, they don’t just write routine checks.
Poster Garden staff members volunteer their time, and the company donates their products. If you’ve ever looked into trade show displays, you know they can be out of reach for small non-profit organizations. Giving non-profits high quality displays greatly improve their presence during events, which directly supports their cause. It’s a true win-win.
Customers want to see you involved in solutions
We all know this world has problems, so it’s a breath of fresh air when a business takes the time to talk about solutions.
Billionaire entrepreneur Richard Branson, well-known for his philanthropic efforts, is a prime example of philanthropy that focuses on solutions. Branson has been already committed to donating $3 billion over the next ten years to reduce global warming. What sets him apart from others is that he’s been working on solutions. Recently, Branson published his proposal for a Clean Energy Dividend, and he’s got some great ideas.
Don’t just talk about issues and throw money at organizations trying to find solutions. Actively participate in coming up with solutions for the cause you care about most.
It’s time to create a stronger philanthropic strategy
Getting involved in the physical world shows people you’re committed to the cause and willing to put some skin in the game.
Don’t expect organizations to thank you for your donation in specific ways. Gratitude is an area that needs to be approached with caution. When an organization wants to express their gratitude by giving back, make sure their reciprocal gift won’t give people the impression that you contributed just for the reward.
A genuine approach to philanthropy will impress your customers, but it needs to be done wisely. Only accept a reciprocal gift when it doesn’t directly benefit you or your company. For instance, it wouldn’t be smart to accept an offer to sit on the board of directors. Even if the offer is genuine, it will be seen as you having bought your way onto the board. Likewise, don’t accept a gift of high monetary value from an organization you donate money to.
What kind of philanthropic activities are you engaged in at the moment? If all you’re doing is donating a portion of your proceeds to a cause, it’s time to create a stronger strategy. Put some skin in the game and show your customers you’re committed to the cause.