ARTICLES

Corporate/Community Relationships Yield a Healthy Return

By Laurie de Koch
Founder of Fuse

Enduring relationships are often at the core of an organization's health and stability. Research suggests that people and organizations derive tremendous value from such relationships and that these relationships are quite often the very key to their success. The community is one stakeholder that, while often overlooked, should be considered a central activity within the company's core business objectives. If invested in strategically, the community will bring substantial returns to the company and all of its stakeholders.

Consider the partnership between Calphalon, a leading producer of high-quality cookware, and Share Our Strength, a national nonprofit organization that works to alleviate hunger. After learning about Share Our Strength and its nationwide Taste of the Nation benefit, Calphalon Vice-President Dean Kasperzak proposed that his company design a Taste of the Nation two-quart sauté pan. Bill Shore, Executive Director of Share Our Strength, agreed to let Calphalon license the Taste of the Nation trademark for which his organization was then paid a $5 royalty for every pan sold. At the end of the first year, Share Our Strength received $180,000 in royalties, and Calphalon sold four times as many two-quart sauté pans as they had sold the year before. When Bill Shore received the first royalty check from Calphalon at a ceremony in front of all the Calphalon employees, Dean Kasperzak whispered to Bill, "If we're giving you $180,000, can you imagine how much we made?" (The Cathedral Within, Bill Shore).

The benefits to the corporation in this example are quite clear: they sold four times as many sauté pans in the first year of partnership as they had the year before. Even so, many people are legitimately skeptical of the potential for financial return on community investments. For decades, there has been mostly anecdotal proof with very little statistical research to build the case.

Within the last few years, however, research from such reputable sources as THE FORD FOUNDATION, THE CONFERENCE BOARD, and CONE/ROPER has statistically demonstrated that corporate community engagement builds customer loyalty, increasing sales; raises employee satisfaction, supporting recruitment and retention; improves corporate reputation, differentiating brand and establishing trust; and increases shareholder value, strengthening shareholder confidence. All of these benefits from community investment are tangible and support the bottom-line success of a company.

These benefits, however, are also very much dependent on the presence of key ingredients in a corporate giving or community engagement plan. Without fail, a corporate giving plan must be strategic and tightly bound to the company's core business objectives. In the case of Calphalon, pots and pans are the very core of its business and the people of Calphalon discovered that their business objectives were quite compatible with the mission and activities of Share Our Strength. The stage was set for a mutually beneficial relationship, one from which both parties, and the community, could gain.

Additionally, engagement only works successfully when top-level decision makers back the partnership. Company employees can have tremendous vision, but, without financial decision-making power, these visions can rarely be realized. With executive management support, however, community engagement has the psychological and financial momentum to move forward. The Calphalon/Share Our Strength partnership was the brain-child of Dean Kasperzak, Calphalon Vice-President and son of Calpalon's founder. He went straight to Share Our Strength's Executive Director, Bill Shore. Their joint-decision making power made the vision a reality and a success.

Nonprofit accountability is another key ingredient to successful strategic relationships. A nonprofit partner must be able to effectively manage the resources that it receives and implement measurement methods that demonstrate the kinds of outcomes they are getting with these resources. Furthermore, they must play an active role and invest value in the partnership. Share Our Strength was responsible for bringing some of the country's best chefs into larger retailers where they performed cooking demonstrations using Calphalon cookware in front of a large display of Taste of the Nation Calphalon sauté pans. Share Our Strength was not a passive recipient of funds but played a significant role in making this partnership a success. They couldn't invest money in the project, but they could invest their time and expertise. With such an investment, Share Our Strength increased the potential of a financial return for both itself and Calphalon, while providing both organizations with incredible exposure.

While strategically engaging with its community, a corporation must also manage its relationships with its other stakeholders. By ensuring that it has buy-in from its employees, shareholders, and customers, the corporation will be more likely to profit from its community engagement efforts. Communication with and inclusion of a company's clients in the community engagement efforts will strengthen customer loyalty and improve the company's image.

Surveys of employees will determine how they are interested in serving the community and how they would like to be included in the corporate community efforts. Employee commitment will bring energy and momentum to the partnership with a nonprofit, as well as a sense of unity and camaraderie within the company. Calphalon employees had Share Our Strength screen savers on their computers and posters on the walls. When it came time to present Share Our Strength with its first royalty check, a big celebration was planned and all the employees came to see Bill Shore receive the $180,000.

A corporation can also manage its stakeholder relationships by implementing reliable accounting, measuring, and reporting methods which demonstrate the benefits of the dollars invested in the project. These methods will reassure shareholders and ensure their continued support. The financial success of the Calphalon/Share Our Strength partnership was so clear and compelling, that the relationship has been continued by Calphalon's new owner, Newell.

When companies engage with their communities through strategic giving, everyone wins. Companies that invest wisely and strategically in the community are actually investing in all of their stakeholder relations. Employees view the company as one worth working for. Customers view the company as one worth giving their business to. And shareholders view the company as a stable, long-term investment because they see that the company acts strategically and responsibly with their money. Among all of these benefits, however, the most important is a stronger, healthier community. With increased resources and a demand by the corporate sector for accountability, nonprofit organizations can efficiently and effectively serve their constituents and improve the community's overall quality of life.