How to handle charitable donations
12 JANUARY 2015 8:44 AM
There are many factors that a company must consider prior to settling on which philanthropic causes to support.
A new year brings new challenges, new opportunities—and new requests from charitable organizations, large and small, for cash contributions and/or complimentary roomnights. Before hitting the “Close” button in disgust (“What a Scrooge!”), let me say there are innumerable worthy philanthropic causes doing important work on behalf of those less fortunate, and working tirelessly to improve the quality of life in the United States and around the world. They are deserving of our support as an industry, as hotel companies and as individual hotel properties.
What's challenging is determining where to channel one’s philanthropic activities. Much like airlines with seats, or themed attractions with tickets, hotels have a desirable commodity with rooms inventory. Figuring out how, when, where and to what extent to allocate this resource to charitable causes (along with any potential cash contributions) should be part of a carefully considered public relations or community relations strategy. It’s simply not feasible to give to everyone. Taking an ad hoc or case-by-case approach to philanthropy can result in receiving more requests and having to explain giving decisions (“Why them and not me?”).
At the corporate level, your giving might be more national or regional in scope. At the property level, the focus might be more local. But however you approach it, have a plan. There are professionals who can help create corporate giving programs, help determine areas of focus and assist in the establishment of guidelines. Because most companies and properties have systems in place to determine the most effective use of capital (maintenance, marketing, etc.) there should also be a system in place for using “capital” (cash, rooms) in making charitable contributions.
Have a focus
One of the first things to consider is areas of focus. Have a “rhyme and reason” for your giving program. Is it the arts? Education? Youth programs? Healthcare? And more specifically, if healthcare is your priority, you might focus on women's programs, a particular disease (cystic fibrosis, muscular dystrophy, ALS), pediatric issues, substance abuse or many others.
Having giving priorities carries with it a number of advantages:
- You know where your dollars or rooms are being allocated.
- You have the ability to have a greater impact on a few organizations as opposed to a minimal impact on a larger number of charities.
- There is a justifiable reason for turning down requests from organizations outside your area of focus.
Determine a budget
Upon settling on areas of giving, determine a budget for both cash and in-kind contributions. Certainly, the in-kind portion might vary during the course of a year depending on room availability, but there should be a general idea of what you intend to allocate for philanthropic activities. In short, make charitable giving part of your normal annual budgeting process.
Do your due diligence
It's also important to do the right due diligence on organizations to whom you make contributions. Clearly, this is more important at the corporate level where you might be making larger donations to national or regional charities. At the local level, it's probably overkill to spend much time looking at the books of the local Little League if you're considering putting signage on its scoreboard. But with larger groups or organizations, or when bigger dollars are involved, review groups’ tax filings and annual reports. How do they spend the dollars they receive (hopefully on research and programs that help their constituents)? How much of their funding goes to staff salaries (hopefully not much)? Do they routinely report results and activities to their donors (they should)?
When you have your program in place, someone in your organization should be assigned responsibility for its implementation. At the corporate level this could be your head of public relations or marketing. At the property level, depending on the size of the hotel, it could be the PR person or the GM. But it should be in someone’s area of responsibility to ensure contributions are tracked so that the guidelines (you established) are met.
Publicize your efforts
Don't be shy about publicizing your philanthropic efforts (but without overdoing it so you come across as exploitative). The fact is, shining a light on your activities to enhance medical research or simply helping a local soccer team acquire much-needed equipment resonates with customers and, increasingly, with investors. Many pension funds and institutional investors look at corporate philanthropy as one criteria in making investment decisions. And at the property level, if a customer gets a good feeling about your hotel because of what you do in the community, all that is to the good.
“Doing well by doing good” has become one of those trite homilies. All companies can benefit by being good corporate citizens. But as in everything else in business, the trick is effecting the right balance between helping the community, serving your customers and generating profits for the benefit of your employees, owners and shareholders.
Marc Grossman is a senior communications executive who served as senior VP, corporate affairs, for Hilton Hotels Corporation, where he was responsible for all global corporate communications, investor/financial relations, public affairs, brand/marketing public relations, crisis communications and internal communications. He also held senior positions with three leading international communications firms. He can be reached at email@example.com.
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