Return on Investment: The Give and Get Play
Read Brett Wilson's first column for Alberta Venture - Confessions of an entrepreneurial philanthropist
by W. Brett Wilson
There is a lot of pressure on corporations to give something back to the communities in which they operate. We even have a term for it “corporate social responsibility.” It’s a phrase that emphasizes the apparently obligatory nature of corporate giving.
But despite these expectations, corporate executives remain divided over their roles in the charitable sector. In a 2010 Compas Inc. poll of Canadian executives, 45 per cent said charitable giving should be left to individual shareholders. Only 35 per cent said corporations should support charities, provided their giving was consistent with corporate objectives and the desires of their employees.
Attitudes aside, when it comes to putting dollars on the table, corporate Canada has a long way to go. According to a 2008 Imagine Canada survey of corporate community investment, the median cash donation was $2,000 (being 1.25 per cent of pre-tax profit), while 25 per cent of businesses didn’t contribute at all.
If mounting community pressure doesn’t make companies beef up their charitable giving, what will? I believe that companies will truly increase their philanthropic efforts when they start to see giving as an opportunity rather than an obligation, and when they see community support as an investment rather than an expense. The best corporate philanthropy doesn’t just make a social impact; it can also add to a company’s bottom line.
I know from personal experience that charitable giving can be one of the best ways to grow a business. Realistically, there’s no such thing as pure altruism. Businesses should expect a return on their charitable donations. In my world, giving and getting go together. Charitable giving that produces an economic return creates stronger companies that can make more meaningful contributions to their communities down the road.
This column is an opportunity to challenge my colleagues to think differently about how businesses and non-profit organizations can benefit mutually from collaborative relationships. The best way to do that is to see philanthropic giving as an opportunity for corporate growth.
At the highest level, the benefits of giving are obvious. Businesses have a vested interest in creating better communities. Strong communities are better able to attract new businesses, corporate head offices and a more educated workforce, which in turn create an even stronger business climate. Employees want to live in communities with a strong economic and social fabric – places where they feel connected to each other and enjoy a great quality of life.
As a proud co-founder of FirstEnergy Capital Corp., I’ve seen the enormous impact one company can have on its community. Since 1993, FirstEnergy has provided more than $10 million in donations to over 500 charities and community organizations. I have been moved to tears by the countless letters of appreciation from the various groups we’ve supported and by the impact we’ve helped make happen.
Frankly, FirstEnergy didn’t set out to be a leader in corporate philanthropy. We did set out to be a leader in investment banking. We used charitable giving as a marketing tool. Every time we gave a contribution to a charity, we were open about the fact that we expected something in return. What we gained in the form of public appreciation, co-branding with larger companies or recognition within the charity’s network helped us to increase our profile, develop new partnerships and grow our client base.
This give-and-get approach paid enormous dividends for the firm. Nearly 20 years later, FirstEnergy is one of the energy industry’s leading investment banks. Whatever yardstick you use, we’ve succeeded in every measure. In the process, we’ve inspired others in our network to begin their own philanthropic initiatives. This spirit of giving is helping make Alberta one of the great places to live in the world.
It’s no accident that some of the most successful entrepreneurs are also some of the most powerful philanthropists. We have a knack for understanding problems, identifying creative solutions and effecting change. Numerous community organizations have benefited from the vision and passion of outstanding Alberta community leaders. Their legacies will live on through the many people they’ve influenced, not least of which is a new generation of philanthropists, including me.
What I didn’t expect when I started out on this journey is how much my philanthropic work would impact me personally. As many of you already know, financial success can be surprisingly hollow. Today, after spending years focused on making money, I spend as much – if not more – of my energy giving it away. Over the years, I have financed numerous events that have raised tens of millions of dollars for worthy causes. I have also invited groups of friends and their children with me to build houses for the homeless in Mexico nine times.
As a result of these experiences, I’ve been reminded that it really is impossible to give without receiving much more in return. One of my greatest rewards has come from connecting people to their own potential for doing good. As more people see how easy it is to make a big difference in the lives of others, they engage their friends in the experience and the circle of influence grows – multiplying the impact of and for everyone.
It doesn’t matter whether you’re a student, a young business owner or a seasoned corporate executive: everyone can benefit from learning more about the opportunities that philanthropic investment can bring. Philanthropy can lead to a bigger business, a better community and a much more meaningful life. I hope you’ll join me regularly on these pages as I share what I’ve learned during my own entertaining – sometimes bumpy, but always rewarding – ride as a philanthropic entrepreneur.