The value of Giving

Recession or not, corporate leaders say philanthropy pays off every day.

By Desda Moss Dec 1, 2009
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December CoverJohn Pazzani, vice president and corporate culture officer for the Timberland Co., a Stratham, N.H.-based footwear and apparel maker, laced up his well-worn yellow waterproof boots in October to join a team of fellow employees working to beautify the gardens and grounds at Betty’s Dream, a 24-unit independent-living facility in Portsmouth, N.H.

“I love working on projects where I can get dirty,” says Pazzani, who leads the HR and corporate social responsibility (CSR) teams. He has had lots of opportunities to do that during his career with Timberland.

Three years after Pazzani joined the company in 1995, Timberland launched a one-day employee volunteer fest that CEO Jeff Swartz dubbed Serv-a-palooza. Last fall, nearly half of Timberland’s 5,000 employees around the world participated in 154 projects, many focusing on the environment and community revitalization.

So far, Pazzani and his favorite pair of “Tims” have worked on three continents in about 10 countries and about a dozen states, wading along riverbanks, traversing rainforests, cleaning trails, and tackling building and restoration projects.

“Our CEO believes that doing well and doing good are inextricably linked,” says Pazzani. “It engages your employees, customers and suppliers. That’s proved true for us around the globe.”

Donna Callejon, chief business officer at GlobalGiving, an online philanthropy marketplace, says organizations remain committed to corporate giving even though the tough economy has affected businesses and charities alike.

In fact, a September survey on the state of corporate citizenship, co-sponsored by The Hitachi Foundation and the Boston College Center for Corporate Citizenship, found that, despite the recession, corporate citizenship practices are ingrained in increasing numbers of U.S. businesses, with 54 percent of respondents stating that corporate citizenship efforts were more important in a recession.

Callejon says the down economy has heightened the need for companies “to be more efficient and effective in their giving. They really want it to be strategic in ways that connect with their business interests. And they’re looking for creative ways to leverage their giving to reach more people at a lower cost.”

Going Deeper

The corporate giving strategy of Western Union, a leading provider of money transfer services, reflects the kind of focused giving adopted by companies of all sizes.

In 2007, Western Union moved beyond its prior tendency to award small grants to many projects and, with The Western Union Foundation, introduced a $50 million, five-year philanthropic initiative called Our World, Our Family, which offers migrants and their families language, education, advocacy and economic opportunities. In addition to engaging 6,000 employees in 48 countries, the program allows community members and Western Union agents in 379,000 locations worldwide to support social issues with time and money.

Addressing the needs of migrants, who represent about 10 percent of the world’s population, was fitting for Western Union, because migrants made most of the $369 billion in money transfers completed in 2007.

Giving is “a natural extension of our core business and reflects our principles of business excellence, personal accountability and global stewardship,” says Western Union’s HR Executive Vice President Grover Wray.

Since its inception, the Our World, Our Family program has logged more than 2,000 employee volunteer hours, launched 300 new migrant businesses, engaged 1,800 nonprofits in 100 countries, distributed 110,000 learning packages to help migrants adjust to new communities, allocated more than $300,000 for scholarships and helped U.S. migrant groups raise more than $500,000. In addition, more than $4.5 million has been generated in employee and agent donations.

The contributions are a response to growing needs among nonprofits, says Western Union Foundation President Louella Chavez D’Angelo. “We usually receive about 500 to 600 proposals a year, but since the economy fell in 2008, we’ve received almost triple that amount. People are struggling,” she says.

So are many businesses, causing corporate donations overall to fall 8 percent in 2008—to $14.5 billion—according to a June report by the Giving USA Foundation. But hard times appear to have had an energizing effect on volunteerism, a trend corporate leaders have seen firsthand.

Modeling Service

In all, 61.8 million Americans volunteered during 2008, almost a million more than volunteered in 2007, according to the Corporation for National and Community Service. The biggest increase came among young adults: The number of 16- to 24-year-old volunteers rose 5 percent, from 7.8 million to 8.2 million.

President Barack Obama and other political leaders have called Americans to service, and businesses and their employees have heeded the call.

Carolyn Berkowitz, vice president of community affairs at McLean, Va.-based Capital One and president of the Capital One Foundation, says bank associates contributed more than 70,000 hours of volunteer time in 2008, teaching financial literacy in schools, building homes, mentoring at-risk youth, and providing valuable pro bono and leadership guidance to local nonprofit organizations to help expand their reach deeper into the community.

“Volunteerism is an important part of our culture, and our associates demonstrate their personal commitment in a variety of ways, whether through participating in volunteer activities or company-sponsored drives, teaching financial education, mentoring, providing pro bono services, or serving on boards,” says Berkowitz.

The Capital One/Junior Achievement Finance Park, a mobile financial education program, offers Capital One employees opportunities to teach money management to middle school students in low- to moderate-income neighborhoods. The program begins with four weeks of intensive classroom lessons. Students then put newly acquired skills to the test in a mock city where they become “adults for a day,” making real-life decisions about housing, transportation, food, furnishing, savings, investments, utilities, entertainment, education and charitable contributions.

In 2008, 1,326 Capital One associates contributed 8,287 volunteer hours to the program. In June, Capital One and Junior Achievement of the National Capital Area broke ground for a 20,000-square-foot permanent financial literacy center in Fairfax, Va. The center is scheduled to open early next year and is expected to provide financial education to more than 14,000 middle school students annually.

Most companies favor a similar approach of encouraging employees to volunteer—and providing incentives to support their efforts.

Timberland’s Pazzani says the company doesn’t “mandate” employee volunteerism: “It’s a benefit. Our people want to do it.”

On their first day, new hires learn about Timberland’s heritage of community service, including benefits such as its Path-of-Service program, which offers:

  • 40 hours of paid time off annually to full-time employees to volunteer; part-time employees receive 20 hours.
  • Paid sabbaticals of up to six months to develop professional skills through volunteer assignments.
  • Opportunities to foster professional development by serving two-year stints as team leaders on select CSR assignments.

About 80 percent of the 35,000 U.S. employees of New Brunswick, N.J.-based Johnson & Johnson are active volunteers in their communities, volunteering an average of 

1.2 hours per week in 2008. Johnson & Johnson also supports employee giving by double-matching the contributions employees make to qualified nonprofit organizations, up to a $20,000 annual cap per employee, and contributions made by each retiree on a dollar-for-dollar basis up to $10,000 a year.

“We see the value of supporting our employees in giving back to their communities,” says Kaye Foster-Cheek, the company’s corporate vice president, human resources.

Gail Gershon, director of employee engagement for The Gap Foundation, the charitable arm created by the founding chairman of Gap Inc., says the San Francisco-based retailer’s 135,000 employees around the world appreciate its commitment to causes they care about, and that a philanthropic reputation helps the company attract top talent and fosters workers’ pride in where they work.

Gap Inc. donates $150 to nonprofits for every 15 hours that an employee volunteers in one year. The company allows employees to take up to five hours of paid time off per month to volunteer.

Community Building

In September, Gap Inc. launched a two-year initiative designed to build the skills of leaders at 25 nonprofits. The in-depth leadership training will be led by Gap’s HR and learning and development staff members.

“We’ve calculated its value to nonprofits to be about $260,000 based on the time provided by Gap employees,” says Gershon.

Skills-based volunteer activities—like Gap Inc.’s leadership training initiative—allow companies to contribute business knowledge and experience to help nonprofits at the same time they develop their employees’ skills.

With training budgets squeezed, many businesses see this kind of philanthropy as a strategic business investment.

“By intentionally linking two unconnected areas like community involvement and training, innovative companies can meet strategic business goals, save money and, at the same time, release new resources for the community,” says Barry Salzberg, chief executive officer of Deloitte LLP in New York. A survey released by Deloitte in April found that more than nine out of 10 nonprofits are in need of skilled volunteers including experts in finance, marketing and HR.

In 2008, Capital One skills-based teams contributed more than 2,500 hours of their time, worth approximately $2 million, through 84 projects with 33 nonprofits.

Making Giving Visible

Many HR leaders and other executives say they are working harder to share information about their corporate giving programs and to make their organization’s good works more visible to employees, customers and stakeholders.

Through a partnership with, Johnson & Johnson launched an online resource in 2007 that provides a centralized location for U.S. employees to search and register for local volunteer opportunities. The service will be expanded next year to include Johnson & Johnson retirees and employees outside the United States.

Gap Inc. plans to launch a web site in 2010 where employees can access information about volunteer opportunities, register for charitable programs and sign up for company matches. “We want to make it as easy as possible for employees to be engaged in the activities that matter most to them,” says Gershon.

Timberland began providing quarterly online CSR reports in 2008 as part of its ongoing effort to operate “greener.” Full CSR reports are available in paper form every two years.

“We’ll report on key metrics and try to be as transparent as possible,” says Pazzani. “When it comes to corporate citizenship, our goal is always to do more than we say.”

Pazzani says the charitable work that Timberland’s employees do has a positive effect in the workplace.

“People who care so much about their communities tend to care about their teammates and co-workers,” he says. “If you work side by side with a co-worker on a project cleaning up a riverbank, when you come back to work you can’t help but be more collaborative.”

The author is managing editor of HR Magazine.

Please share ideas about how your organization engages employees in the areas of philanthropy and volunteerism.

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