Defining guidelines for corporate financial giving
This is part three in the series “A Guide to Corporate Financial Giving”. In the first post I wrote about “A desire for more and described how we previously had a very “herky jerky approach to giving at CablesAndKits and our desire for something better. In the second post, I wrote about “Defining a financial plan for corporate giving and described what we do now. This third post is about defining guidelines for giving and I will describe what, where, and how much we choose to give.
Choosing a general theme and selecting a primary cause
With so many choices for where and how you can give money, you should set some parameters now to keep your focus narrow and your efforts more effective. You always have to say no to something; there is only so much money available for giving. By defining a general theme for giving now, you will save yourself from guilt and uncertainty later when having to say no to things that do not fit your giving plan. This will also prevent you from depleting the funds you have available for giving on things that are not as meaningful to you.
Within the general theme, you may also want to select a primary cause. A primary cause is a more specific type of cause within the general theme. For example, if your general theme is the practical needs of people, a primary cause might be as broad as “water” or as narrow as “funding the drilling of wells in Uganda”. By having a primary cause that you prefer to support, you will create focus and alignment for your company and your team.
Here are some things to consider when defining your general theme and primary cause.
Determine what’s meaningful to you and your staff
Before going any further you should seek to discover what you and your staff have a passion for. Are you already connected to causes that are meaningful to you? Write down all the things you have donated to in the past. Now, go through the list and see what stands out.
Discuss with your staff, and/or form a team made up of various staff members to meet regularly to work through the options, arrange giving, and even coordinate service projects. We have a team like this at CablesAndKits. You should be a part of these meetings at some interval to set vision and guide thinking.
It will be incredibly helpful, if not imperative, for you to define your general theme and the primary cause you want to support. For instance, do you care more about people, animals, history, or the Earth? Without some level of focus to your giving you’ll be all over the place and not very effective.
Here are a few examples of things that may stand out as being more important to you. This list is certainly not exhaustive!
- People specifically vs humanity as a whole
- People – Mind (Mental Health, Addiction), Body (Food, Water, Clothing), Spirit (Sharing the Gospel)
- Humanity – Disease eradication, cancer research
- Animals specifically vs wildlife as a whole
- Animals – Dog and Cat Rescue
- Wildlife – Controlling pet/animal populations, research and cure of diseases
- Places and Things
- Preservation or nature, Operation of parks
- Funding of museums, preservation of historic places
- The Earth
- Global Warming, Geological Studies
After careful consideration you may decide that you only want to give to causes impacting the health of children, the eradication of disease, support of the homeless, or animal welfare, etc. You may want to be very narrow in your approach and support only one cause, or you may choose a more general approach, but with a guiding theme, and support several small things within the theme.
No matter what you decide, it will be helpful for you to at least choose a general theme for your giving, even if a primary cause is not as immediately obvious. Focus on causes within your general theme, and say no to everything else. You will begin to get more and more clarity about the primary cause by examining the things you tend to support within the general theme.
At CablesAndKits our general theme for giving is people (specifically), with a primary cause of caring for practical needs (body). First, we look for opportunities to take care of the needs of our people (staff). Then, we tend to look for opportunities to impact “the next generation” (children’s causes – nutrition, health, well being, education, etc).
With a general theme and primary cause defined we know when a cause is “up our alley” and can choose to consider it or not, and then decide to what level we will support it financially. Secondary causes may still get attention, but tend to be at minor levels of giving and are considered on a case by case basis.
We have supported the causes of high school or tech school student education (usually in technology tracts), adult well being such as addiction and recovery programs, donated to homeless shelters, provided study bibles to 3rd world pastors, funded mission trips, donated to hurricane and natural disaster relief, and more. In almost all cases the causes we supported were at least within our general theme.
Discovering worthy causes
If you need inspiration for a general theme or primary cause, consider the business or industry you are in. Think of ways you could make an impact in your industry, or something related to your industry. For instance, let’s say you operated a car wash. Perhaps you would like to donate to things related to water. You could donate to water conservation causes, or to drilling wells or providing clean drinking water to people in parts of the world where it’s not freely available. If you owned a restaurant, you might provide meals to hungry kids. Talk to your staff and see what comes to mind. Look at what your competitors or industry associations are doing for inspiration as well.
[If you’re not sure about the ins and outs of a charity, check their ratings on Charity Navigator]
Financial Planning Guidelines
Once you have chosen a general theme, and perhaps a primary cause for giving, you need to decide how you want to direct your charitable giving funds as they become available. You will need to choose whether to give every dollar to the same place/cause, or to divide the funds among a variety of causes. You will also need to choose to give money as it is available throughout the year, or to give it in big chunks. For instance, if you wanted to fund the drilling of a well you may choose to build up funds and give them all at once when you reach the required donation amount. Alternately, if you support a cause with more of an ongoing mission you may choose to give every month.
You should define the minimum or maximum amount to give to each cause, in each case. You will want to define this both as an absolute amount, and also a percentage of the need.
Minimum/maximum dollar amounts
There are a few reasons for defining minimums and maximums. For one thing, you don’t want to divide $1000 10,000 ways. Everyone gets a dime – so what. And, you would probably have to hire 2 full time people to handle all the details. A minimum may be a number you pull out of thin air, or it may be more purposefully selected to help you choose more carefully the things you support.
Maximum dollar amounts will help ensure that you don’t bite off more than you can chew, or quickly deplete your capability to give by draining your giving fund. It’s also a good way to force yourself to think clearly and pace yourself with your giving in the face of an opportunity. You don’t want to get overly excited about a cause and drain your entire giving account all at once, leaving nothing for anything else. Or maybe you do – and if you want to override your maximum you can, but will otherwise have a way out if tempted to give too much to a single cause.
Consider whether you want to be the knight in shining armor, or the encouraging helping hand. If you don’t want to solve 100% of a person’s problem, or fund an entire cause completely, consider setting some percentage maximums. For instance, do you want to pay the total expense for a mission trip, or only up to half – and rely on the recipient’s efforts to raise the rest? By setting maximum giving percentages you can decide to be a part of the solution, but not the knight in shining armor. Some causes need a knight in shining armor … you”ll just have to decide if you’re the right knight.
Maintain a minimum accrual account balance
If your general theme allows for responding to needs that are hard to anticipate, consider that as part of your financial planning. For instance, if you always want the ability to respond to the needs of your staff, you may want to maintain a minimum balance in your accrual account large enough to cover a need should one arise. If you were willing to pay an auto repair bill of $500, but wouldn’t cover the entire expense of a replacement car, perhaps you only need $1000 or so in your account. Think through some scenarios and come up with a “minimum number”. Get your accrual account to that level before you begin sending funds out to other causes.
[If you have an unexpected cause arise, and don’t have accrued funds available to cover it, you can allow your accrual account to “go negative” but that’s not ideal. If that happens, it’s an indication that you haven’t fully considered every financial aspect of your general theme.]
Handling things outside the norm
Consider whether you want to be prepared for major unexpected giving opportunities, and plan accordingly. If a cause arises, do you want to have funds available to respond?
At CablesAndKits we like to contribute to relief efforts after major natural disasters in the U.S. One of the financial guidelines we setup came in 2013 after a devastating tornado in Oklahoma City. We decided that in the event of a major natural disaster we were likely to give half of the balance of our accrual account to relief efforts. The reason for choosing 50% was twofold to give a significant amount to the cause while also not draining the account and losing the ability to give to other causes.
Expecting the unexpected and planning accordingly may mean not funding causes related to your primary purpose monthly. Instead, you may build the balance of your giving accrual account to a certain level, then fund your causes quarterly or a couple times per year. That way, you always have funds available for the unexpected.
In summary, choosing the general theme of your giving will help you say no to causes more confidently. It’s not a matter of good vs bad, but good vs better. By knowing where you want your focus to be, you will know where you want it not to be. Determining what’s meaningful to you and your team will create alignment and focus that is a powerful tool to inspire doing more good, more often. Choosing a primary cause for your giving will create even more focus by helping you determine where to direct the bulk of the funds you have available. You and your team will get excited when you have giving goals materialize out of your focus.
Financial planning is a key component to determining how funds will be used for causes. You should plan for the unexpected and keep funds available for these sorts of causes as they arise. Determine if there are big things (like responding to natural disasters) that need to be taken into account. Devise a plan for how funds should be used for these purposes if so.
I hope this has been helpful in your pursuit of a plan for corporate financial giving. Questions or comments? If I can be of any assistance to you please feel free to reach out to me directly.
A Special thanks to all the people inside and outside of CablesAndKits – both former and current, that were a large part of shaping my thinking, and contributing their thoughts to what our giving program has become. Who knows where we would be without my wife Christin, Susan Barge, Dave Rae, the former and current members of our Core Team, and all the staff and advisors we have had over the years that have contributed their thoughts and heart to what this has become.
Craig Haynie – Chief Steward
A Guide to Corporate Financial Giving
Part 1 – A Desire for More
Part 2 – Defining a Financial Plan for Corporate Giving
Part 3 – Defining Guidelines for Corporate Financial Giving