Giving Back Corporate philanthropy: How business and nonprofits both benefit from philanthropic partnerships

If you were to happen upon Wilson Elementary School on June 9 of last year, you would have seen a large group of men and women painting various parts of the Santa Ana campus. It wasn’t a crew of district custodians giving the school a makeover. Nor was it a volunteer group of parents out to improve the campus their kids attend each day.

No, these volunteers were from the financial-services company Deloitte & Touche USA. Nearly 400 accountants, consultants and other professionals from the Orange County offices, showed up at the school to paint playground equipment and three large new murals, designed by artists commmissioned by Deloitte & Touche.

During their all-day efforts, the employees spent a generous amount of time interacting with the students, visiting a succession of K-4 classes to talk and read to the kids about simple principles of business.

“It really gave the school a sense of community,” says Wilson Principal Robert Anguiano. “It helped the climate of the school and helped to beautify it and to make it look cleaner.”

“One of the students said, ‘This is the best thing that ever happened to us,’” adds Anguiano, noting that the children were enthralled with the murals, one of which was filled with images of animals and a rain forest.

Corporate giving is big at Deloitte & Touche – literally and figuratively. Company officials will tell you it’s a cornerstone of the culture there. Deloitte encourages its employees to do volunteer work on a wide variety of projects – from teaching Junior Achievement curriculum to helping low-income families prepare their income taxes.

Deloitte employees also contribute a large amount of money to charity. Those in its Orange County practice – which has offices in Santa Ana and Costa Mesa – donated more than $330,000 to Orange County United Way in 2006. That was more than $100,000 above the contribution for 2005.

Moreover, there are 18 Deloitte professionals who are members of the Orange County United Way Tocqueville Society, which means they give more than $10,000 a year to the nonprofit and its partners.

The financial services giant is among a long list of Orange County businesses that give bountifully to charities, nonprofits and other public-service institutions. Such companies include Bank of America, UPS, Washington Mutual, Boeing, Southern California Edison, The First American Corporation, Allergen, The Gap and many others. In addition, some of the most generous givers in the county are the foundations formed by prominent entrepreneurs such as Henry Segerstrom, Henry Samueli and Paul Merage.

It’s difficult to estimate just how dramatically corporate philanthropy impacts the Orange County organizations that benefit from the output of funds and volunteerism, including food banks, homeless shelters, hospitals, learning centers, and organizations with missions that range from combating domestic violence to fighting heart disease to helping the developmentally disabled lead independent lives.

Colleen Sandrin, the executive vice president and chief operating officer of Orange County United Way, notes the vast network of people corporate giving affects.

“When we meet with companies to thank them for their contributions, we say, ‘We’re thanking you on behalf of the thousands of people you’ll never meet,’” Sandrin says. She adds that it’s not just the behemoths on the business landscape who make a difference. “There’s also a large number of small businesses who help, as well. They may not give as much in dollars, but what they give in per capita spending is very, very generous.”

Corporate giving can come in several forms. A company can donate a cash gift to a charitable organization, or its employees can donate money through voluntary payroll deductions to a targeted charity. Sometimes businesses donate goods, like cars or computers. Employees can also make a hands-on contribution, volunteering their time and energy to help a nonprofit in some tangible way. Oftentimes company employees will sit on the boards of nonprofits in their community.

Some business leaders give to causes that resonate with them personally. Hilary Kaye, who heads her own public relations and marketing communications company in Tustin, raises money every year to fight multiple sclerosis. Her mother, Ruby, died from MS. Annually, Kaye gathers employees and friends to team up with her in the MS Walk in Orange County, which was held this year on April 14 at UC Irvine. The walkers raise money through sponsorships and Kaye’s team is known as Ruby’s Raiders.

“When I do this every year, I kind of feel like my mom is here with me again,” says Kaye, who has a lobby wall in her office covered with Ruby’s Raiders memorabilia.

Although Hilary Kaye Associates has just a handful of employees, it spearheaded a fundraising drive for the 2005 MS Walk that won the company the Corporate Unity Award. Gathering 70 members, it collected close to $17,000 – more than any other Orange County business that entered a team.

The Irvine Public Schools Foundation is another example of business allying with nonprofit. The foundation has forged a flourishing partnership with heavyweights in its community, most notably, The Irvine Co. and John Laing Homes. The foundation has raised many millions of dollars to pay for opportunities and resources that Irvine schools can’t get through state funding. Among other things, the money has led to reduced class sizes and providing music programs that would likely otherwise be cut.

Giving back benefits the bottom line

Although many corporations donate their financial and human resources for altruistic reasons, it would be naive to think those are the only reasons businesses give to various causes. Philanthropy has many practical advantages. An obvious one, of course, is that charitable donations are tax deductible.

It also creates good publicity and helps shape a positive corporate image. Many businesses sponsor events such as 10K runs or educational conferences as a way to elicit goodwill from consumers and provide a form of advertising for the company. Philanthropy is simply incorporated into the strategic marketing plans of many corporations.

Business leaders also know that financial benevolence can be an effective networking tool; after all, donating a large sum of money to an organization will likely ensure you a face-to-face with an executive you’re eager to meet. Those in the business world, however, will say it’s not always that calculating – that being a good corporate citizen is the right thing to do from a social standpoint, and it makes good business sense, too.

“Our clients and other business leaders in the community expect [corporate giving from us],” says Rick Rayson, office managing partner for the Orange County practice of Deloitte & Touche USA, which earned nearly $9 billion in revenues in fiscal year 2006. “They are going to have a relationship with Deloitte and…they expect us to have a partnership with the community.” Because of that, the company’s philanthropic efforts go a long way toward sustaining its positive business relationships, he notes.

“We want to work with people who have the same values as we do,” says Rayson, who has been with Deloitte for 27 years. “It’s good for our people and good for our business.” That’s why corporate giving is a “win-win” situation, he adds – it helps people, while also being smart business.

The partnership between the Irvine Public Schools Foundation and local businesses is clearly one that benefits both the kids and the companies themselves. Students win because the money that is raised contributes to greater opportunities and improvements for their schools, compensating for the fact that the Irvine Unified is traditionally one of the lowest funded districts in California. And the most prominent donors have been developers and builders, such as The Irvine Co. and John Laing Homes; it’s obviously to their financial advantage for the area to have the best schools possible.

“Certainly, they have a vested interest in [donating money for the schools],” says Tim Shaw, CEO of the Irvine Public Schools Foundation. “Good schools are one of the primary factors in determining good property value.”

Last year, The Irvine Co. Chairman Donald Bren donated $20 million to the group to cover the costs of fine arts and science programs (which are steadily being slashed in the state budget) in Irvine elementary schools over the next 10 years.

The annual raffle of a house has been a big money maker for the foundation since the event was launched in 2004. The three raffles held so far have sold a total of 33,000 tickets and yielded close to $7 million. Up for grabs this year is a new, $600,000 townhome by John Laing Homes, in Irvine’s Woodbury community. (For information, call 949.734.6873 or visit ipsf.net.)

John Laing Homes also provided the raffled house in 2004, followed by homebuilders William Lyon and Taylor Woodrow, respectively.

“We’ve received a lot of support from the building community,” says Shaw. “I’ve done fundraising work for nonprofits for a long time, and of all the industries who give back to the community – and there are some who don’t – the building industry is one of the best.”

Michael Wagchal has more than 20 years of experience working in the world of nonprofit, endowment and planned giving. Wagchal now owns a job title that shows just how much philanthropy is part of today’s corporate world: He’s the vice president and senior philanthropic consultant for The Merrill Lynch Center for Philanthropy and Nonprofit Management.

Merrill Lynch feels a responsibility to donate — with its money, time and expertise — to the communities where its employees and clients live and work, Wagchal says. Since 2000, the company has provided funding to 75 organizations in Orange County – Hoag Hospital, UCI and Bowers Museum, among them – for a total of nearly $900,000.

Like Deloitte & Touche, Merrill Lynch gives to institutions whose missions reflect values that are also important to the company in establishing its business relationships.

“We have found that our philanthropic efforts in the community project the values that current and potential clients find important when choosing a financial institution,” Wagchal says.

Another way philanthropy benefits businesses is that it boosts employee morale, making them happier and more productive. Most individuals feel good about giving to those less fortunate than themselves, so when their place of work also puts a high priority on that, it makes them feel good about where they work. It also helps when recruiting. “Particularly younger people, when they are deciding on where they want to work and where they want to stay, they base those decisions on quality-of-life factors,” says Rayson. “They feel almost a duty to do things that are meaningful in the bigger context outside of Deloitte, outside of their career.”

When employees pitch in on a volunteer project, joining forces outside of the office environment and doing something to help people, it creates a stronger team spirit in the office, say business executives.

Once a month, George Willis, vice president of the Southern California District of UPS, takes a group of managers to volunteer at different places, such as a shelter for abused children.

“It’s really a sad thing to see these children. When you get to hug one of these kids, you look at that as an opportunity to give that kid everything he didn’t get in his life,” says Willis. “It’s a memory [for these employees] that a team building exercise can’t duplicate. It’s really special, and they have a great time doing it.”

UPS is a standout in corporate philanthropy. In 2005, it pledged more than $57 million for United Way giving, which topped all previous records by U.S. corporations, say UPS officials. In the Southern California District, employees totaled more than 6,000 hours last year volunteering their time to help different charities, notes Willis. “Our corporate responsibility is to give back,” he says.

Fieldstone Communities, Inc., a Newport Beach homebuilder, dedicates one day each year to volunteer projects. Employees at the company’s four divisions – located in California, Utah and Texas – provide hands-on help to charitable organizations in their communities. Last year, employees at the South County division – which covers all areas south of Los Angeles – poured sweat equity into an Orange County homeless shelter, doing repairs, cleanup and painting.

“I get feedback from a lot of the employees and they tell me this is one of their favorite things to do,” says David Greminger, president of Fieldstone’s South County division. “At the end of the day, you really feel you’ve done something meaningful.” Fieldstone Communities, he adds, puts a certain level of its profits each year into the Fieldstone Foundation, which disburses funds to various charities and nonprofits.

Greminger has also become very involved in the fight against MS. Last year, he was diagnosed with the disease. A vice president of the Orange County chapter of the Building Industry Association, Greminger gathered a large team of Fieldstone colleagues and friends to walk with him in this year’s MS Walk at UCI, raising money in the continuing battle against the disease.

At Haskell & White, an accounting, auditing and tax consulting firm in Irvine, employees participate in Casual for a Cause each Friday, where they can dress down for the day in exchange for making a small donation to the charity of the month. Haskell & White’s giving extends to a wide range of cultural organizations, including the Laguna Playhouse and South Coast Repertory. 

“After several years of serving [theater] clients and attending plays,” says managing partner Wayne Pinnell, “we began to realize that we could also promote the arts in Orange County and found ourselves sponsoring activities in this sector.” The firm has won several awards from the OC arts community.

Count this among the things that Orange County United Way does for people: It helps low-income families with their income taxes. The Federal Earned Income Tax Credit is the state government’s largest cash assistance program, but many people who qualify for it either don’t know they’re eligible or don’t file their taxes. To change that, Orange County United Way hosted about 20 different events this year where free tax-preparation services were provided for low-income families. Once again, Deloitte & Touche stepped up, supplying a number of volunteers at each of those events – not only to help with taxes, but to also assist with whatever was needed, including onsite child care.

“They have been phenomenal,” says Sandrin, the local United Way leader, of Deloitte & Touche.

Reflecting its commitment to volunteerism, the financial services company has an annual event it calls Impact Day. All of its nearly 40,000 workers in the United States go into their communities to do volunteer projects on that day. Employees at the Orange County branch dedicate themselves to improving a school in Santa Ana each year, like Wilson Elementary last June.

On Impact Day, some Deloitte employees head over to WISEPlace, a transitional housing shelter for homeless women, to do hands-on work there as well. Last year, they planted vegetables and painted the lounge area at the Santa Ana site.

Paula Neal Reza, director of development for WISEPlace, says these may seem like relatively small things, but they’re actually quite important to those who reside at the facility. These are women who yearn for a pleasant and peaceful atmosphere.”

“Having that is part of their healing and recovery process,” says Neal Reza. OCM 2007