“What are the innovations we need to re-launch the economy?”

This is the topic of the G8 Young Business Summit that I will be attending this week.  Pretty hefty question, and one that is timely in light of the recent vote that happened in the US Congress on the Climate Change Bill.   Young entrepreneurs from around the world will be gathering in Stresa, Italy for two-days of workshops, debates, presentations and networking on issues surrounding social innovation and green technology.  read more »

There are five stages of corporate philanthropy:

1. Cheque-book Philanthropy
2. Strategic Philanthropy
3. Community Investment
4. Corporate Social Responsibilty (CSR)
5. Corporate Citizenship

Social capital is the thread that ties these concepts together.  Using this concept businesses can recession-proof their companies.

In my previous post Bullet-Proofing your Corporate Karma, I presented five ways for you to ensure that your community reputation stays intact during this down-economy.  This post looks at how you can take your community partnerships to a new level in a down economy.

From a business development perspective, charities are going to be impacted by the recession just as businesses will be.  They will have fewer dollars to communicate their message and fewer avenues to share their story with (as companies pull out of community projects, decreases the community contact).  When you look at this contracting market there is opportunity for your business to jump into this void.

What does this look like?

1. Cross-promotions: Charities need new and creative vehicles to tell their story.  Your company has the marketing vehicle and the need to connect with a new market.  By evaluating what type of client you are looking for, you can source out the types of charities that your client will be attracted to.  Negotiating a cross-promotional package is a win-win-win for: your business, the charity, and the client that you are attracting (you are supporting the charity that they are supporting).
2. Employee Cost Reduction: On average it costs Canadian companies, 3x an employees' salary to train someone who leaves within the year (this obviously decreases the longer an individual stays with a company).  This is an expense your businesses cannot afford... in any economy.  One way to retain employees and to cut costs associated with those individuals, is to shorten the work week while connecting with your community partner.  What does this look like?  You can offset the expense of that person by having him/her "work" for a charity that is aligning with your business.  In essence, this individual is now acting as an ambassador, both for your company and for the charity.  You are minimizing the costs for the charity by providing them with an employee so that more money is going towards what their mission is.  There are two ways you can save money - by donating the value of the hours of that person to the charity you can garner a tax credit OR you can negotiate a shorter work-week with that individual generating an actual cost-savings.  The result: You are strengthening your position within community which will directly correlate to your bottom line.  One final justification for this work-schedule model is - studies have shown that Gen Y'ers would sooner have a day-off for volunteering than financial compensation.  Playing into that emotional paycheque is just as important as financial compensation.

These are just two cost-effective ways of Recession-Proofing your company.  I would like to hear how you are using community partners to shore-up your business during these tough times.

If anyone is doing well these days - I think it is the Veterinarians.  Why?  Because my 9 year old Lab just had surgery and between that, the special food, the tests, the post surgery visits and the "little extras" this minor day surgery is not so minor.  So, in difficult financial times, I advise going to Vet School.  If nothing else, people will always have pets that they consider part of their family!  Oh - she's doing well and other than walking around dazed and confused - she will be fine.

On to the topic for today - 

My post leads off with a personal request - check out Denise Deveau's article in the Financial Post, Spirit of Giving May Be Cautiously Strong. Denise interviewed several Canadians who are working in the charitable sector as advisors and she presents an optimistic view of where things are headed for the sector.

I was listening to CBC's The Current and Anna Maria Tremonti, the host was interviewing three gentlemen who work in the financial sector as analysts, economists and advisors.  At one point during the interview the charitable sector came up as to how foundations are cutting back and corporations are cutting back and woe to the non-profit organizations that are seeking funding.  I got to thinking, is this really the case?  Should it be woeful to be in the charitable sector right now?

Jim Collins wrote in his book Good to Great (which you can order through this website be clicking here - makes a great gift!), that the corporate world could take a page out of the non-profit sector book.  Here are, for all intents and purposes, businesses, that are forced to be innovative because they run on shoe-string budgets.  You wouldn't see the United Way going to either the American or Canadian governments seeking a bailout because of mismanagement, poor planning and lack of innovation.  In fact, my hunch is that if one of the largest charities in North America were faced with that dilemma the donors would probably hunker down and ask the tough questions (which, if they were good donors they would have been doing all along - SHOW ME THE MONEY?  Where did you spend it?  How did you spend it? What impact has been achieved?). 

As I write this, perhaps our own government should look at what happens when charities fail.  There is so much duplication of services in the charitable sector that shrinkage is actually a good thing.  As long as it is controlled shrinkage.  What do I mean by this?  If donors were to start giving as investments into organizations that not only have fancy marketing materials but rather, into charities that may or may not have that budget, but have proven results the sector would be running more efficiently, more effectively and as a result with greater synergies between organizations, partners, corporations, government and individuals (users and donors).

I cannot tell the future, but what I can say is that this too shall pass.  Hopeful charities have learned from their mistakes and will start examining the "turf issues" that have cropped up over the past decade or so (since the last major boom) and decide if having 50 organizations in one city dealing with homelessness is really the best use of donor dollars, government resources and corporate sponsorship.

As donors and community investors, it is your time to lead the way by holding these organizations accountable and asking if there are others who are doing the same thing but better.