Corporate giving is not static and unchanging, but rather an evolving process dependent on economic realities for companies that choose to give back to the communities in which they’re doing business.
“It’s a concept of partnership,” said Michael Brown, executive director and vice president of corporate affairs, Barrick North America. “We’re in the mining business, but we’re also trying to be partners with the community. Call it a social license to operate. We need to have good bonds with the community and corporate social responsibility and philanthropy are part of that effort.”
Corporate giving engages employees with corporate goals. “We encourage everyone to follow personal passions,” said Dallas Haun, president and CEO, Nevada State Bank (NSB). “Some of our colleagues have husbands, spouses, children, fathers who were [or are] in the military, so they’re involved with military things. Some have lost relatives to heart problems or cancer so that’s where they tend to spend their time.”
Dermody Properties Foundation was funded in 1988. “We realized that the communities we work in enable us to have our success and welcome our clients,” said Michael Dermody, CEO. Working in the community as developers, company principals came to understand how important a community base is. “It’s not just about real estate, but education, families, everything that makes a community, so it’s natural to give back to that community and let our company grow.”
The success of businesses and communities are connected – employers want to be located in healthy communities, and communities need robust businesses to fuel the economy.
Industries that traditionally make up large segments of Nevada’s economy, like mining, real estate development and the hospitality and entertainment industries, came through the economic downturn differently.
Real estate development companies were hard hit. For Dermody Properties, the foundation was already in place, but that didn’t mean that continuing corporate giving during the tough years didn’t require digging in. “We made a concerted effort to continue to support our community causes,” said Dermody. When the company didn’t have the funds to support the foundation, they found the funds to do it despite the company not making money. “Our rationale was that regardless of how the company was doing, these families needed our support more than ever during the recession, and it was incumbent on us to continue to support them.”
Nevada’s mining industry came through the recession fairly well, with gold climbing steadily to its highest price in September 2011. The prices of silver and gold, which comprise 90 percent of the total value of minerals mined in Nevada, didn’t drop significantly until 2013.
In contrast, Nevada’s gaming and tourism industry felt the effects of the recession almost immediately with the state’s largest casinos losing more than $5.9 billion in 2009.
According to Applied Analysis’ Corporate Philanthropy in Nevada 2014 report, Nevada companies continued corporate charitable giving, to the tune of $134.4 million in 2012 (0.22 percent of their revenues) as compared to the national average of 0.13 percent. Nevada companies gave to health and social services, culture and the arts, civic and public affairs and education throughout the recession. Interestingly, though the dropout rate is considered a problem for Nevada, corporate giving to education is just 12 percent, compared to the national average of 29 percent. In addition to those interviewed, some of Nevada’s largest corporate givers include City National Bank, Boyd Gaming, Stations Casinos, Valley Health Systems, MGM Resorts and NV Energy.
Quantifying Giving
Barrick Gold has a tradition of corporate giving, but as the recession and subsequent recovery progressed, Brown realized that the face of corporate giving was changing in Nevada.
“People tend to mix corporate giving, giving by individuals of high net worth, and giving by foundation, and to blur [those terms] together,” explained Brown. But individual giving, gifts by individuals who control their own funds, is different from corporate giving, which is basically giving shareholder dollars, and different still from a foundation that’s probably funded with money made decades before and managed by an administrator.
“I realized the state was changing and we were evolving and our program was moving forward,” said Brown. “I was talking with Tony Sanchez of NV Energy and told him I was having problems benchmarking our corporate giving programs.”
From that conversation the Corporate Giving Council was formed, with a two-fold mission to collect statistics on how Nevada companies engage in philanthropy, and to provide a forum for those businesses to collaborate and share information. It also was the genesis of the Corporate Philanthropy in Nevada report, prepared by Moonridge Group and Applied Analysis.
What members of the newly formed council learned was companies engaged in philanthropic giving tend to focus in areas of direct support for people in need, or in areas of education and social services, but that during the recession there was enormous pullback from environmental concerns, support for the arts and similar charities.
Corporate giving is different from individual and foundation giving in another way: it’s driven in part by what the corporation is trying to achieve. Charitable giving is performed without expectation of benefit to the company. Community investment serves both long-term business goals and needs within the community. Commercial giving benefits the corporation. However, when asked to rank the importance to charitable giving efforts for enhancing the company’s reputation, creating opportunities for business growth, increasing customer loyalty, or providing opportunities to engage with the company’s employees, company principals ranked the four points almost exactly evenly, according to the report.
“Research shows both from a customer standpoint and an employee standpoint that customers like to patronize corporations that do well and give back,” said Thom Reilly, executive director, Caesars Foundation. Given those facts, it makes sense to have a robust giving program.
Employee Engagement
In-house employee giving campaigns have been shown to boost morale. Though the most visible component of Caesars’ giving is the Caesars Foundation, a separate 501c3 nonprofit entity, in which every property has its own community focus.
Cox Charities is the charitable giving arm of Cox Communications, and is entirely employee driven, according to Stephanie Stallworth, director, public affairs, Cox Communications. Employees are responsible for raising the funds and directing them back into the community.
Cox Charities grew out of a United Way employee giving campaign which was revamped and taken in-house in 2007. “We really saw a dramatic uptick in employee giving,” said Stallworth. “Not only did more employees start participating in subsequent years from 2007 through present, but they started giving more.” Every year the program has existed it’s grown. Far from faltering with the recession, the program started with it.
Dermody Properties includes corporate, foundation and individual giving. Giving by Dermody Properties Foundation is driven by employee passions. One reason it works, said Dermody, is that, “the foundation is managed by employees of the company and that’s not something that is mandated. They really take it on their own to manage the funds and the people in the management decide where the money goes and review the grant applications and requests.”
In 40 percent of companies, charitable giving is directed by a company executive. Foundation leadership decides for the next 29 percent. Only 7 percent have employee-driven charitable decisions.
Dermody Properties focuses on arts, education and the family, with special emphasis on the elderly, children and veterans, in part to keep charitable contributions local, and in part to avoid trying to be all things to all people. Making children and family causes the baseline, the foundation spread naturally to include education, then extended to include the arts. “We felt it was more important to be more focused in one area than to be giving a little in many,” said Dermody.
Because there’s a desire to make giving both meaningful and sustainable, Caesars Foundation strives for strategic focus in giving, with a primary focus on older individuals and some focus on both education and the environment. “So each of the properties may have a much different focus because they’re meeting the needs of the local community,” said Reilly.
It’s expected that as the Nevada economy recovers and gold prices stabilize, corporate giving will become more strategic and less focused on meeting basic community needs, according to the Corporate Philanthropy in Nevada report.
Cox Charities has established criteria for requests for funding – applicants must be a 501c3 nonprofit, and local and it’s preferable for them to fall into one of three categories: children and families, education with emphasis on STEM careers and diverse organizations.
It makes sense for organizations looking for charitable funding to research what the corporate charity wants to fund. Barrick Gold’s focus is on education, the arts and social justice.
“Bring us a program that somehow involves those and we’re going to be much more interested than if you bring us something far afield from that,” said Brown. “We also suggest [to applicants] that most corporations now want to see a social media plan attached to the proposal.”
Recessionary Giving
Mining remained a strong industry throughout the recession, and Barrick Gold actually expanded its corporate philanthropy, becoming involved with the food bank in Southern Nevada and with programs delivering in the social area.
Barrick earmarked funds for programs to combat Nevada’s high school dropout rate and to raise cattle on some of Barrick’s ranches and donate them to the food bank, a project Brown stated was more difficult than anyone expected.
One mid-recession change was hiring an expert in corporate social responsibility. “It became more about trying to adjust root causes than treat symptoms,” said Brown. “So it’s more about providing support in the classroom with groups like Communities in Schools to help move the kids along rather than showing up at a charity dinner.”
The changes instituted by the company are meant to lead to engagement with charitable programs where there are visible results that can be traced back to those programs.
One way companies can engage in charitable giving is through not only time, but their own expertise. Nevada State Bank employees volunteer to teach financial literacy. Systemwide, individuals with the bank have donated more than 700 classroom hours through Junior Achievement on topics from saving to credit cards to paying bills.
NSB’s commitment to giving volunteer hours to the community was in place before the recession started. According to Haun, hours have stayed consistently in the 5,000 to 6,000 a year range throughout the downturn, though the bank’s financial commitment to the community was cut back.
“We’re close to back from a financial standpoint, to where we were with pre-recessionary dollars,” said Haun. “We’ve been in Nevada over 55 years and giving back to these communities that have supported us is integral to my colleagues and executive management.”
The bank’s policy is to allow personnel to follow their passions and find the charity that works for them. “Luckily with over 140 different charities and events throughout the state, we’re able to represent our company well and be involved in many very worthwhile things,” added Haun.
The finance, insurance, real estate, rental and leasing sector grew 13.7 percent between 2011 and 2013, and the industries provide significant philanthropic gifts in Nevada.
Caesars Foundation prefers to create and maintain long-term relationships rather than giving one-time charitable gifts. Their relationship with Meals on Wheels Association of America began in 2002. Foundation giving has changed over time, but none of the major charitable partners were abandoned during the recession, even though it’s not always easy to explain keeping up external giving when economic pressures require belt-tightening and layoffs, Reilly said. During the downturn, Caesars ramped up in-kind and employee engagement giving, separate from the Foundation, and with a couple requirements. “One, [organizations] had to brand our gifting, because we do want customers and the community to know we’re supporting the community in which we operate, and the second component is that they have to offer employee engagement strategy in order for us to gift to them.”
The gaming industry contributes the most charitable dollars in Nevada, and is now in recovery but continuing to face challenges as Nevada’s economy changes. In addition to lost profits is the increase in visitor volume in Southern Nevada without a corresponding increase in visitor spending – in 2014 the industry reported negative net income for the sixth year in a row.
Employee engagement in charitable giving programs through volunteer hours is an important part of corporate philanthropy. Company-sponsored days or events that offer employee involvement are very popular, as is paid time off for performing volunteer work.
Prior to the 2007 launch of Cox Charities, there had been a moderately successful United Way employee workplace campaign in place. There’s been an uptick in employee generosity since the change, said Stallworth, and Cox has tracked volunteer hours donated by employees, not as a replacement for charitable dollars, but in addition. By November, both company-sanctioned and individually volunteered hours add up to better than 15,000 hours, up from 2014’s 14,000.
Why Give?
Important considerations for corporate gifting include meeting needs within the community, furthering a strategic purpose for the company and seeing the contributions effect change.
Why is it important for a company to give to the communities in which it has a presence? “From the employee standpoint, it’s to show that the corporation is supportive of the community in which we live and operate,” said Reilly. “So many of the causes from an individual standpoint really resonate with our employees and it demonstrates that the corporation is a good corporate partner, involved with the community.”
Corporate giving can also help address community issues. Tracking the Meals on Wheels participation and meals delivered, Caesars went on to underwrite one million dollars of research on the link between hunger and isolation when there was found to be a gap in the literature on the topic.
When it comes to corporate giving, it’s not just the beneficiaries who have wish lists: those in control of corporate giving do also.
“More money. Obviously we have budgetary constraints like anybody else,” said Haun. Reviewing requests for funding, “They’re all worthy causes. I just wish we had more money.”
“More money,” added Reilly. But also, “To continue to involve our own employees in these causes, because that [increases] the financial gift in the amount of time and commitment and visibility these nonprofits receive.”
