The Real ROI from Philanthropy for Companies

By: Rebecca Wettemann, VP, Nucleus Research

Since the beginning of time, philanthropy has been seen as a good thing – but also seen as something rich people do after they make their money, not something companies do because it helps them. As such, philanthropy has traditionally been disconnected from work, at best. For many of us, we take time off to volunteer (or not), open our checkbooks when the annual United Way campaign comes knocking, and may give to causes that reflect our values, but that is largely separate from who we are and what we do at work. Except at companies like Salesforce.

Salesforce.org began with an in-house solution for helping all global Salesforce employees volunteer, and naturally, technology is a key part of that. Last year Salesforce partnered with United Way to build an enterprise-grade philanthropy solution, and this year, Salesforce.org and United Way launched Salesforce.org Philanthropy Cloud.

Philanthropy Cloud helps connect the dots among corporate employees and nonprofits at scale. It also sets the stage for connected end-to-end philanthropy that weaves work and giving together and gives donors and companies a clear view of their impact. This is because of the unique partnership of Salesforce.org with United Way, the leader in workplace philanthropy. United Way works with 110,000 companies with 61M employees on their corporate social responsibility programs and services. Additionally, Philanthropy Cloud combines innovation with content and services to help companies build employee engagement programs and provide donors a feedback loop to understand the impact of their contributions.

I have to admit that, when I started doing research on philanthropy as part of a recent report I published on Philanthropy Cloud, I was a bit skeptical. All the touchy-feely research talked about how great philanthropy was for brand image and corporate reputation, but we all know that the folks in finance don’t write checks for warm fuzzies. However, as part of the research, I surveyed consumers in North America and Europe and found there is real ROI – not just warm fuzzies – from philanthropy. The cold-hearted CFO is coming around to the philanthropist’s point of view, because it impacts the bottom line in two key areas:

1. Revenue. Consumers are, on average, willing to pay 6% more for products coming from social responsible companies. Consumers are 64% more likely to recommend companies that are socially responsible to their friends, and 63% more likely to try new products from socially responsible companies.

2. Employee retention. We also found 50% of people believe working for a company that shares their values is important – and that number rises with the millennial-and-under set. In the competition for talent, having a socially responsible image matters. This plays out in recruiting costs, employee retention, and overall employee productivity. With the cost of replacing an employee topping out at 42% of their fully loaded cost, retention hits the bottom line as well.

So all of a sudden philanthropy is cool because it’s good for the bottom line? No – it’s always been cool. However, now we have the technology to enable giving in a way that makes sense. With Philanthropy Cloud, getting your employees engaged in socially responsible activities is easier than ever. Just as Salesforce disrupted software, Philanthropy Cloud disrupts traditional corporate philanthropy:

• Instead of annual or event-specific giving, philanthropy is year-round.
• Instead of separated from work, it’s part of work-life balance and bringing your whole self (including your values) to work.
• Instead of disconnected, it’s connected – from CSR goals to donations to employee time to talent.
• Instead of being directed from the top down, it’s bottom-up, frictionless, collaborative, and attuned to individual employee’s passions and causes.

As we as employees look to manage work-life balance, and HR wrestles with how to support “whole people” – instead of just the part of us that earns the paycheck – this notion of connected
giving is increasingly important. Connected giving includes three parts: linking corporate goals to employees’ donations of money, time, or talent, helping drive greater employee engagement, and enabling HR and CSR professionals to effectively track, manage, and communicate about the contributions employees make, especially the positive outcomes on their communities. On top of that, it delivers real bottom-line results that even the coldhearted CFO would love.

For more ROI details to support your company’s business case for employee giving and volunteering, get the full report from Nucleus Research.

About the Author
Rebecca Wettemann, VP, Nucleus Research.
Rebecca Wettemann is responsible for directing and managing Nucleus’s industry-leading quantitative research team. She has written and presented extensively on the subject of enterprise applications, CRM, collaboration, and integration technology and its impact on business. She is an expert on the financial analysis of technology and is the author of numerous return on investment (ROI) studies and reports.

Prior to joining Nucleus, Ms. Wettemann directed IDC’s European Collaborative Technologies programs.
Ms. Wettemann holds a BS in Political Science and a BA in French from Oklahoma State University and a Masters of Law and Diplomacy degree from the Fletcher School at Tufts University.