One advisor discusses how to develop a plan that resonates with business-owner clients.

Brayley: How does the topic of philanthropy usually come up with business owners and executives?

McAlpine: Often, discussions about the overall business strategy lead to owners talking about their desire to support the communities in which they do business. Sometimes it’s because there’s a specific cause they want to support, or it can be part of their corporate responsibility platform. It’s also often connected to employee recruitment and retention, brand strategy and reputation-building activities.

Brayley: What happens then?

McAlpine: In the course of discussing the company’s community investments, owners often indicate they have little sense of how their giving is making a difference, or whether what they’re doing really makes sense for the business. This leads to a conversation about aligning community giving with business goals in a more meaningful way.

Brayley: How do organizations develop a strategic community investment plan?

McAlpine: There are a number of considerations that will shape the direction and impact of the plan. A key factor is the objectives for the community investment strategy—from both a community and a business perspective. This will usually involve consideration of the company’s business strategy and giving history. Other considerations include the resourcing and reporting structure. Options include the C-suite, human capital or marketing and communications. The choice will affect the direction of the program and send different messages to both internal and external stakeholders.

Businesses also have to decide whether a separate legal structure, like a foundation, is the best vehicle for their purposes. Importantly, an organization will determine the stakeholders they want to engage – employees, community, clients, suppliers. This can be an important factor in determining which charities to support, and what kind of resources they want to provide. Finally, they need to decide the direction for their charitable giving and individual organizations they may want to support.

Brayley: Do you find business leaders are thinking differently about how they direct their philanthropy?

McAlpine: Yes, I think so. Rather than simply writing cheques, they’re looking for ways to increase their impact; for example, by taking leadership on an issue.

Brayley: Do you have an example?

McAlpine: One that comes to mind is PricewaterhouseCoopers Canada Foundation’s Leadership Grants Program. Through this program, the Foundation offers grants to existing or emerging charity leaders to support the advancement of their professional development and organizational goals. The program focuses on providing support to small-to-medium-sized charities with operating budgets under $1 million – a segment that’s particularly challenged to obtain operating funds. Staff and partners invite charities aligned with the cause areas most important to them to apply for these grants and also participate in selecting grant recipients using the Foundation’s toolkit for effective grant-making. It’s a great way to engage employees, and in the process, they feel connected to the causes and organizations and learn to be strategic philanthropists.

Brayley: How can organizations enhance the effectiveness of their philanthropic plans?

McAlpine: There are a number of resources available that can add to a company’s knowledge about the issues and charitable organizations working in a community. PwC, for instance, modelled their program after the Toronto Community Foundation’s Vital People grant program. The Foundation identifies issues through its annual Toronto’s Vital Signs® report. Through its various grant programs, including Vital People, the Foundation finds community organizations that are working on solutions to those issues. The great thing is the Toronto Community Foundation is open to sharing its deep knowledge of the community to create more effective philanthropy.

Brayley: As a professional advisor, why do you think it’s important to have these kinds of conversations with your clients?

McAlpine: For me, that’s simple. My observation is that, especially with business owners and executives, the corporate conversation about philanthropy is often linked to their aspirations for both their business and their community. It provides the opportunity to deepen the relationship on both the business and personal levels, and one discussion feeds the other. It can open doors to things you would never expect, and with a wonderful outcome.