Compassionate companies contribute to their communities through charitable donations and cause marketing. A survey found that Americans expect companies to support causes, even during economic downturns. Cause-related marketing can boost sales and benefit charities while also improving employee morale and public opinion of the company. When companies inform the public about their charitable support, such as Home Depot's support of Olympics and Dannon Yogurt's support of breast cancer awareness, it strengthens their brand. Charitable contributions are important for communities, and donors should carefully research charities to make sure donations are used effectively.

1. Compassionate Companies Contribute to Their Communities
By Chelse Benham
“The fragrance always remains on the hand that gives the rose.” Mahatma
Gandhi, 1869 -1948
Each year the holidays bring about contributions from galvanized individuals and
companies determined to make a difference in the world. At The University of
Texas-Pan American, Sylvia Aldape, director of Stewardship and Special Events
for the Division of External Affairs, has helped to bring joy to a small town in
Mexico for the last six years. Aldape and 50 other family members collect small
used or new toys and other items to include in holiday gift bags that are
distributed to 200 children in Queretaro, Mexico.
“It is exciting not only to see the kids playing with their toys that day and in the
plaza the next morning, but also to see how people at work have gotten
involved,” Aldape said. “Some people I work with at UTPA who do not have kids
even go out and buy new stuff for the bags.”
Not everyone can contribute their time and energy to a cause and instead some
people give money to special causes and charities. However, many people do
not know what charities to give to and how their donation dollar is spent.
A recent survey on charity telemarketing fraud conducted by the American
Association of Retired Persons (AARP) revealed that U.S. residents receive
more than five charitable solicitations per week through the mail and via
telephone. During the holiday season, when charities receive almost 40 percent
of their yearly contributions, these solicitations are expected to increase
significantly. The survey found that more than two-thirds (67 percent) of
respondents were not confident that the caller "really represents the
organizations they say they do." Forty percent of survey respondents said that
they were "not at all confident" that the caller was legitimate and 57 percent
admitted that they never asked how their donation would be spent.
Too many people make donations without asking the right questions according to
Charlie Mattingly, president of the Louisville, Kentucky Better Business Bureau.
Some charities that solicit by telephone and direct mail use professional
fundraisers which may retain up to 80 percent or 100 percent of funds. Mattingly
suggests donors should ask charities how much of their money will go to
fundraising costs.
A study by the Boston College Social Welfare Research Institute predicts a
“golden age of philanthropy” by 2052. The institute estimates that a staggering
$41 trillion will pass to heirs with six trillion to $25 trillion winding up in charity
coffers. Charities large and small want a “piece-of-the-pie” and may take

2. advantage of donors’ generosity by misrepresenting themselves and their level of
actual contribution for a specific cause.
Renata Rafferty, a donors’ philanthropic planning consultant in Riverside County,
California and author of “Don't Just Give It Away: How To Make the Most of Your
Charitable Giving” (Chandler House Press, 1999), advises people to stop being
reactive in their giving and become proactive. Rafferty recommends the
following:
• Identify how you want to make a difference. Do you want to save the
environment or starving children?
• Decide how broadly you want to help. For example, do you want to donate
a computer or build a computer center?
• Choose a home base for your philanthropy – your current town or where
you grew up.
• Determine the level of philanthropy risk you are willing to assume – do you
invest in blue chips such as the American Red Cross, or in a small, start-
up that may stretch your money?
• Check out the groups you find. Ask the right questions and expect the
right answers.
At www.charitynavigator.org more than 1,750 nonprofit groups are listed and
evaluated. The American Institute of Philanthropy (AIP) is another charity
watchdog organization that grades some 400 charities in 37 categories. It offers
some valuable tips for charity giving.
Check credibility of the charity with the above online resources. Another
watchdog organization is the Wise Giving Alliance. It provides a list of
government offices by state that register charities.
Look closely at the charity’s name. Charities often sound alike such as the
National Children’s Cancer Society and the National Childhood Cancer
Foundation, but not all charities are equal or have the same standards.
Do not give cash! Write a check or pay by credit card to the charity, do not write
a check to the name of an individual who is collecting the donations.
Determine the purpose of the charity. Make sure it does what you think it
does. For example some charities work for a cure to a disease while others care
for those suffering from the disease.
Find out if your donation is tax deductible. If an organization is tax exempt, it
(does not pay taxes) doesn’t mean your donation is tax deductible. Ask the
charity directly if your donation is tax deductible and get their tax exempt number.

3. Find out what percentage of your donation goes toward the charitable
purpose (versus to the running cost of the organization). The phrase “All
proceeds go to charity,” is misleading. This means that all money left over after
expenses goes to the charity and that may be a very small amount.
Never feel pressured into giving. Be proactive not reactive in your giving. If a
person gives you a sales pitch reconsider giving.
Look for the charity’s physical mailing address and telephone number.
Don’t get sucked into an Internet “charity” that exists only on the Web.
Low on cash, but still wanting to make a difference? Give gifts of support.
The Hunger Site or EcologyFund.com allow creative options to giving.
Americans feel that companies should be large contributors to charitable
organizations. The 2001 Cone/Roper Corporate Citizenship Study found that
almost eight in ten Americans today (79 percent) believe that companies have a
responsibility to support causes. The study emphasizes that Americans expect
companies to adopt this social role regardless of the economic climate. Almost
nine in ten Americans (88 percent) say that during an economic downturn and
period of tighter consumer spending, it is important for companies to continue
supporting causes.
“More than ever, Americans want to know about companies’ corporate
citizenship efforts, and they will form opinions of a company’s brand and
reputation based on those efforts,” according to Carol Cone, CEO of Cone, Inc.,
a strategic marketing communications firm and co-author of the Cone/Roper
Report used by the marketing profession and media to evaluate the importance
of brand marketing.
According to Cone, “Cause-Related Marketing” is a powerful positioning
discipline used to enliven brand equity and enhance corporate image with
significant bottom-line and community impacts. She calls this emerging business
practice “Cause Branding.”
Cause-related marketing doesn’t just have the potential to boost your sales and
benefit a worthy cause. It can do wonders for employee morale, influence public
opinion of your company and instill your brand with poignant qualities that can be
played up in image campaigns and advertising. In order for the public to know
about your cause-related support you have to inform them that you are doing it.
For example, Home Depot is known for their support of Olympic athletes,
Dannon Yogurt for breast cancer awareness and Paul Newman’s food products
sales go to charities. In fact, the Newman's Own brand is now two decades old,
selling 77 different products in markets throughout the English-speaking world.

4. "In 2002," Newman writes, "our gross sales were $110 million, with an after-tax
profit of $12 million, which we distributed to over 200 charities."
Charitable contributions have a significant place in communities. There is always
room for more donations, support and individual contributions. Giving helps the
world go around and all who are in it a bit better off. Taking the time to evaluate a
charity and ultimately supporting one of your choice increases your loyalty to that
organization and its intrinsic value to the community. It’s a win-win situation.
“It is every man’s obligation to put back into the world at least the equivalent of
what he takes out of it.” – Albert Einstein