Business and Community Stakeholders

1. Search the Web The Foundation Center is a clearinghouse that publishes the “The National Directory of Corporate Giving”: www.fdncenter.org Business and Community Stakeholders 15 1

2. Chapter Fifteen Objectives • Identify two basic ways of business giving • Discuss the reasons for community involvement, including community projects and stakeholder management • Explain the pros and cons of corporate philanthropy • Differentiate between strategic philanthropy, cause-related marketing and cause branding • Characterize the plant-closing issue • Address steps before a plant-closing decision • Identify strategies after a plant-closing decision 2

3. Chapter Fifteen Outline • Community Involvement • Various Community Projects • Corporate Philanthropy or Business Giving • Business and Plant Closings • Summary

4. Introduction to Chapter 15 • Positive and detrimental effects of the business stakeholder • Community involvement • Corporate philanthropy • Plant closings

5. Reasons for Community Involvement • Businesspeople are efficient problem solvers. • Employees gain satisfaction and improved morale. • A positive image facilitates hiring. • A company gains prestige and greater community acceptance. • Social responsibility is the alternative to government regulation. • A company benefits from helping institutions essential to continuation of business.

6. Publicity about volunteer opportunities Recognition through articles, awards, and commendations Ongoing endorsement of programs by CEOs Company-sponsored projects with multiple volunteers Executives who have board memberships Community Involvement Activities Used to Encourage Employee Volunteerism

7. Community Involvement Company Benefits From Employee Volunteerism • Indirect community benefits • Employee benefits • Bottom-line benefits

8. Community Involvement America’s Promise • Caring adults • Safe places and structured activities • A healthy start for a healthy future • Marketable skills • Opportunities to give back through community service

9. Community Involvement

10. Community Involvement Resourced-Based Giving • Assess resources • Assess competencies • Determine where resources and competencies will achieve the most good

11. Managing Community Involvement • Business stake in the community • Self-interest and preservation • Direct or indirect benefits • Developing a Community Action Program • Knowing the community • Knowing the company’s resources • Selecting projects • Monitoring projects

12. Demographics Environmental and land use Infrastructure and physical services Leadership Leisure Local economy Local education Local government Local health and human services Managing Community Involvement Knowing the Community – Community Needs Assessment

13. Managing Community Involvement Knowing the Company’s Resources Mix and range of resources • Personnel • Money • Meeting space • Equipment • Supplies • Time

14. Managing Community Involvement Selecting Projects • Plan and organize projects • Meet cost effectives business standards • Capitalize on corporate talents and resources • Involve employees in projects • Select communities familiar to the corporation • Select projects with high probability of success • Use corporate policy to support ongoing programs • Select projects that allow people help themselves

15. Managing Community Involvement Monitoring Projects • Review execution strategy for congruence with plan and schedule • Obtain feedback from participants

16. 1.Knowing the community—The corporation shouldget involvedin the communities it knows. 2.Knowingthe company’s resources—Community involvementmust be cost-effective. 3.Selecting projects—Programs should affect and interest those employees involved. 4.Monitoring projects—Management must run community involvement like other parts of the business. Managing Community Involvement Developing Community Action Programs

17. Community Involvement of Foreign-Based Firms • 81% had community involvement projects • 71% reported community expectations were very important or moderately important parts of their business plans • 50% were satisfied with their community involvement programs

18. Community Involvement of Foreign-Based Firms Motivations • Moral obligations (61 %) • Community expectations (56%) • Image strengthened (56%) • Self-interest (50 %)

19. Business Giving:Why Do Companies

20. Business Giving:To Whom Do Companies Give? • Education • Health and human services • Civic and community activities • Culture and the arts • Other organizations

21. Business Giving: Managing Corporate Philanthropy • Public purpose partnerships • Strategic philanthropy • Cause related marketing • Global philanthropy

22. Business Giving: Managing Corporate Philanthropy Public Purpose Partnerships • A for-profit business enters into a cooperative agreement with a nonprofit for their mutual advantage • Reconciles financial and social goals

23. Business Giving: Managing Corporate Philanthropy Strategic Philanthropy • Giving fits the firm’s overall mission, goals or objectives by • Contributing to firm’s economic success • Aligning with the firm’s business endeavors

24. Business Giving: Managing Corporate Philanthropy

25. Appoint a philanthropy czar Support czar’s efforts to find “natural” causes Promote dialogue between business and philanthropy functions Decentralize the philanthropy function Make the parts add up to more than the whole Continue evaluating corporate philanthropy Business Giving:Managing Corporate Philanthropy Implementation Strategy for Strategic Philanthropy

26. Business Giving:Managing Corporate Philanthropy Cause-Related Marketing • Direct link between a firm’s product or service and charity • Purposes of cause-related marketing • Global marketing • Short-term promotion • Image building • Marketing to women • Cause branding

27. Business Giving:Global Philanthropy - Advantages • An improvedcorporate image • A boost in market penetration • Improved personal relations • Improved government relations

28. Business and Plant Closings • What should business do? • Before deciding to close: • Propose new ownership • Explore employee ownership • After deciding to close: • Conduct community impact analysis • Provide advance notice • Provide transfer, relocation and outplacement • Act to phase out business gradually • Assist community with replacement industry

29. Business and Plant Closings Employee Ownership: Factors • Employee readiness for ownership • Union attitudes • Management/entrepreneurial skills among employees • Products and markets • Technology • Proposed organizational structure • Potential funding sources

30. How will they be affected? What groups will be affected? What is the duration of the impact? What is the timing of initial and later effects? What is magnitude of the effect? To what extent will the impact be diffused in the community? Business and Plant Closings Community Impact

31. Business and Plant Closings Advance Notice • Worker Adjustment and Retraining Notification Act • More notice than the law requires

32. Business and Plant Closings Benefits • Transfer • Relocation • Outplacement

33. Business and Plant Closings Gradual Phase-Outs • Buys time for employees • Buys time for communities

34. Business and Plant Closings Attracting Replacement Industry • Cooperation • Assistance

35. Business and Plant Closings Factors in Plant Closing Assistance • Size and impact of closing • Extent of corporate commitment to employees and community • Length of time firm located in community • Length of time firm employed employees • Resources available to firm to provide assistance • Firm’s sense of social responsibility

36. Business and Plant Closings Community Lawsuits • General Motors case • Whitehall Laboratories case

37. America’s Promise Cause-related marketing Cause branding Community action program Community involvement Employee owned Philanthropy Resource-based giving Strategic philanthropy Third sector Worker Adjustment and Retraining Notification Act (WARN) Selected Key Terms