Corporate giving has increased exponentially over the past several decades, but what are the best ways to do it?
Michael Norton, PhD, a professor at Harvard Business School, suggests that companies use a no-strings-attached strategy.
Instead of encouraging employees or customers to donate money to a cause and match their donations (ala TOMS shoes), the company should contribute regardless of others’ behaviors. They should also use an “involving strategy” that encourages employees and customers to choose the cause or causes the company works with.
By allowing customers to vote on which of three charities would receive a company’s monthly donation instead of just telling them that the same-size donation was being made to a pre-selected charity, the individuals got to feel involved.
Research showed that consumers spent more during the visit in which they voted. The customers who voted were also more likely to sign up for a yearly membership in the buyers’ club. With one, no-cost change, the company saw both short- and long-term gains.
Employee-giving programs are similar. In an experiment, employees at a bank received vouchers to place money into accounts for several non-profits. Each employee could spend his or her $20 and $40 vouchers as he or she wished. The company then honored the employees’ donation requests.
Employees who received the vouchers reported higher job satisfaction than those who had no input in the decision over how to allocate charitable giving.