Is "Doing Good" Good for You?

By Susan Knobler

Release Date: January 1, 2015

Expiration Date: November 10, 2019

Learning Objectives:
Upon completion of this program, the participant should be able to:

  1. Learn why there are good reasons to give back to the community in which you work.
  2. Understand how your customer base views doing good and the impact it can have on a business.
  3. Learn ways to participate in doing good and their business and tax implications.

Faculty/Editorial Board:
Susan KnoblerSusan Knobler is the founder and former Director of OneSight; Director of Development, Cincinnati Ballet and is currently a clear and persuasive writer and grant writing consultant with academic, nonprofit, business and consulting experience.

Credit Statement:
This course is approved for one (1) hour of CE credit by the American Board of Opticianry (ABO). Course SWJH557

HISTORICAL PERSPECTIVE

In 1970, economist and Nobel laureate Milton Friedman argued in a New York Times Magazine article that "the only social responsibility of business" is to "increase its profits." According to Friedman, spending corporate funds to promote social goals detracts from the bottom line. In his book, Capitalism and Freedom, Friedman states, "The corporation is an instrument of the stockholders who own it. If the corporation makes a contribution, it prevents the individual stockholder from himself deciding how he should dispose of his funds." More recently, critics of corporate giving programs contend that corporate philanthropy consumes company resources and more often than not, furthers the goals of management rather than the goals of shareholders.

Jump to 2013, when the Cone Corporate Citizenship Study found that just 6 percent of consumers believe the singular purpose of business is to make money for shareholders, while the clear majority expects companies to do more than play a limited role in communities. In fact, 91 percent of consumers want companies to support social or environmental issues in some capacity—up 8 percent since the 2010 survey.

Similarly, the authors of a study published in the Summer 2013 Journal of Marketing Theory and Practice found that retailers can improve their bottom lines by becoming immersed in the community, whether the business is small and locally-owned or a large global chain. "Retailers who want to reap the benefits of heightened loyalty and attract consumers who don’t mind paying a bit more should actively build community connections."

WHAT HAPPENED BETWEEN 1970 AND 2013?

The influence of the ’60s changed how we look at business. Losing confidence in government, we’ve begun to look to Fortune 500 companies equipped with the most advanced research departments and top tier talent to solve social problems.

Women now buy nearly 80 percent of all consumer products worldwide (including eyeglasses!) and are more influenced than men by brands affiliated with causes they support. Millennials (also called Generation Y, roughly ages 14 to 34) are receptive to cause marketing and more likely than non-Millennials to purchase items associated with a particular cause. It’s the most racially diverse generational group in the U.S. and at 23 percent of the U.S. population, just edges past Baby Boomers in group size. While some depict the group as entitled, selfish, lazy and addicted to technology, they have become a vital force for social good. They are socially and environmentally conscious, and expect businesses to be as well.

GENERATIONAL BREAKDOWNS

These are approximations. Only the Baby Boomer generation is clearly defined by the U.S. Census.

DOING GOOD IN TODAY’S WORLD

In fact, traditional donations of product, service or cash to a worthy cause no longer satisfy consumers who expect companies to take a more active interest in the core issues facing our world.

Attitudes have shifted so dramatically that a new type of business certification called Benefit Corporation or B-Corporation is now available in most states, designed for for-profit entities committed to consider society and the environment in addition to profit in their decision-making process. Benefit Corporations commit to creating a general public benefit—defined as a material positive impact on society and the environment. More than 1,064 B Corporations in 60 industries now exist in 34 countries offering a positive vision of a better way, or at least a different way to approach business.

PLAN IT: OPTICAL OR NOT

Involve staff in planning your community outreach as a team-building opportunity. Perhaps someone is a volunteer or board member at a nonprofit organization where you might get involved. Discuss whether or not to focus your community outreach on donating optical care or seek out totally different ways to help. Would your team prefer donating free eyeglasses to the homeless or helping to build homes with Habitat for Humanity?

A common recommendation regarding business giving is to establish a flagship or signature charitable initiative that leverages the unique resources of the business to address a social problem where it can make a difference. For example, a bookstore supports adult literacy, a restaurant partners with a food bank, and a dry cleaner makes recycled prom gowns available to borrowers. (Optical suggestions may be found below.) Whatever you decide, be sure to choose a cause your customers care about.

CAUSE MARKETING VS. COMMUNITY INVOLVEMENT

Cause marketing is not the same as community involvement. It’s a type of marketing promotion involving the cooperative efforts of a business and a nonprofit organization for mutual benefit. In traditional cause marketing, a company designates a particular item or service and commits to donate some amount of money to a charity for each item sold within a specific time frame. Creating opportunities for customers to donate in-store and sponsoring events or teams are also examples of cause marketing.

Cause marketing can be successful in building business. However, it has downsides. Prevalent since the ’60s, some consumers have become skeptical of its claims. They want to know how much of the proceeds are being donated to the charity, whether or not there’s a cap on the ultimate overall donation, that the donation was actually made and its ultimate impact. They want to know whether or not prices were inflated to include the contribution. Cause marketing done poorly can boomerang and create negative reactions if customers think the promotion is just about buying goodwill.

DO IT

Here are suggestions for community involvement aligned with your business:

  1. Serve at a nonprofit organization as a volunteer or board member. Join the Chamber of Commerce, Better Business Bureau or Lions Club. Use the opportunity to network, meet new people, talk about your business and build your mailing/e-mail lists.

  2. Donate nonprescription sunglasses or certificates for prescription glasses to charity auctions. This helps the sponsoring charity while building traffic to your shop.

  3. Donate eye exams and glasses to the disadvantaged. Consider staging an in-store event, bringing kids from a local school or shelter to your store, creating a party, and getting neighboring stores to donate gifts and refreshments. This may sound easier than it is. Make sure your optometrist is on board and work with a proven, cooperative nonprofit agency or school willing to identify students they believe would benefit from complete eye exams, provide transportation to and from your business, and secure permission slips from parents.

    Depending on your lab situation, you may need to bring the students to your facility twice. Or have the designated students come with their parents at varying off-peak times for their eye exams and frame selection, then bring them in all at the same time to receive their glasses in a party atmosphere with refreshments and gifts. Always partner with a nonprofit agency or school to select those with financial and optical need. Make sure candidates have already failed a vision screening. Remember that HIPAA regulations apply whether or not a recipient pays for services.

  4. Help school nurses deliver vision screenings. Consider allowing employees to volunteer during work time. Wear shirts with your company logo.

  5. Sponsor a sport protective eyewear program for student athletes in schools with high poverty (RecSpecs, Leader Eyewear). Sponsor a youth sports team such as soccer. Use the opportunity to educate coaches, parents and players about the importance of safety eyewear and UV protection for children in sports. Your office will be seen as an expert in eyewear safety on and off the field.

  6. Encourage all employees to participate in a charity walk/run together wearing T-shirts with your business logo.

TALK ABOUT IT

If as the Cone reports consistently report, 93 percent of consumers want to see more products, services and retailers support worthy social causes and issues, and nearly 9 in 10 consumers feel responsible to purchase products that are socially and environmentally responsible, it would be foolish NOT TO SHARE your community outreach efforts with customers and prospective customers.

While most world religions consider the highest level of charitable giving to be anonymous, this should not be the approach for businesses. Customers want to know your plans and results, and the more transparent you are, the better.

Use your practice’s website, social media presence (i.e., Facebook page), electronic newsletter, in-store signage and photos to share your community commitment. Inform local media of your plans in the hope they’ll cover the story. (Remember there are no guarantees with public relations but its benefit of an implied editorial endorsement is worth the risk.)

Train employees to talk about their involvement with customers in a personal way. Ask the charity you’re supporting to include your business in their publicity and social media efforts.

DON’T REINVENT THE WHEEL

Many optical charities would welcome your involvement. Here are a few in alphabetical order:

CAN A SMALL SHOP AFFORD THIS?

YES. If you fear you can’t compete with the chains in this arena, you are wrong. Independents have a huge advantage when it comes to community outreach because they can make decisions locally and move more quickly. In a community emergency, the small shop may be first on the scene to help.

According to the U.S. Small Business Administration (www.SBA.gov), 75 percent of small firms donate to charities each year, averaging a contribution of 6 percent of profits. Women-owned businesses tend to donate an average of 10 percent.

• Charitable donations can be handled as charitable or business deductions. (Charitable deductions are subject to limitations while business expenses are not.) Those deducted as business expenses must be related to the business and have some financial benefit expected in return such as a bump in sales or exposure. Think of the Little League team sponsorship as a substitute for a print or radio ad and compare how each delivers for your business.

• Charitable donations of cash gifts can be deducted as charitable contributions by the business owner on her personal taxes or by sole proprietors, partners or shareholders in an S corporation on Schedule A (Form 1040) on their personal tax form.

• In-kind gifts of property, equipment, frames and lenses may be deducted at fair market value. Unfortunately, volunteers cannot deduct the value of their service (including eye exams), but can deduct certain expenses related to the volunteer work such as transportation and out-of-pocket expenses such as supplies or refreshments.

• Businesses, like individuals, must donate to qualified organizations in order to take charitable deductions. These are groups given tax-exempt status by the IRS because they are organized to benefit society. You can check a charity’s tax-exempt status at www. irs.gov/app/pub-78. Information about all charities can be found at www.guidestar.org. Never donate to individuals who claim they are needy or to the relative of an employee who insists their family member is indigent. There are no tax benefits in this case plus it’s better to have an approved nonprofit organization determine who is financially deserving.

• Always consult with your own tax advisor.

The above suggestions are not meant to replace the advice of a tax professional.

BENEFITS FOR YOUR CUSTOMERS

Doing good in the community and publiciz ing it in the right way builds your name recognition, respect, goodwill, preference and loyalty toward your practice. It can be a competitive advantage in a crowded field. Again, from the Cone 2013 Study: "When companies support social or environmental causes, consumer affinity surges. Nearly all consumers say that when companies behave this way, they have a more positive image of the company (96 percent), would be more likely to trust that company (94 percent) and would be more loyal to that company (93 percent)."

BENEFITS FOR YOUR EMPLOYEES

Involving employees in community outreach builds pride, morale, job satisfaction and cooperation.

Potential employees perceive companies with strong community involvement as more attractive, so it becomes easier to recruit and retain talented employees, especially Millennials. As recently as Sept. 2, 2014, the Wall Street Journal reported that employers are increasingly offering donor and volunteer opportunities as a means to recruit young talent. "A younger employee population wants to work for companies that are socially responsible." Those Millennials again!

BENEFITS FOR YOUR HEALTH

As if these are not sufficient benefits to get you motivated, how about this? You will feel better physically and contribute to a "pay it forward" phenomenon. Studies from several institutions describe the biological "warm glow" triggered by giving. Giving has been linked to the release of oxytocin, a hormone that induces feelings of warmth, euphoria and connection to others. And those on an "oxy-tocin high" can potentially jump-start a virtuous circle, in which one person’s generous behavior triggers another’s.

Studies have shown that when one person behaves generously, it inspires observers to behave generously later, toward different people. In fact, researchers found that altruism could spread by three degrees so that each person in a network can influence dozens or even hundreds of people, some of whom he or she does not even know.

Don’t risk becoming irrelevant to your customers and losing out on these powerful benefits. Offer your customers a powerful benefit in addition to healthy eyesight—the possibility of connecting, through you, to the community.