Eight Ways To Ensure Your Company Aligns with the Right Charities

By: Laura Mohammad
December 20th, 2011

Goldman Sachs Group Inc. was recently billed as a key sponsor for a Lower East Side People’s Federal Credit Union fundraiser. It turned out that the credit union was honoring Occupy Wall Street at the fundraiser—causing Goldman Sachs to withdraw its name from the dinner, spawning a debate and raising eyebrows.

Embarrassment can ensue if you attach your name, time and money to a cause that does not reflect well on your business. How can your company and its executives minimize the likelihood of allying with a charity that is not ethical, or one that does not align with your organization’s core values, as happened to Goldman Sachs? Here are eight steps you should take to protect your personal and corporate reputation:

1. Consider your company’s values. The first step in deciding whether to support a charitable cause lies in understanding your company’s core values. “I think about how my clients would respond to what I am involved in,” says Austin-based Kristen Wicke, Maxwell Locke & Ritter LLP’s audit partner in charge of the nonprofit sector. “You have [ask]: ‘How does [this group] do business? What is their behavior? How do they achieve their mission?’”
2. Consider the charity’s values. Once you have articulated your company’s values, you should evaluate the core mission of the charity. “Understand the core values of that nonprofit, and how they go after their mission,” Wicke says.
3. Ask questions. A common error for business executives is that they fail to ask enough questions before aligning themselves with a charity. “They say, ‘I want to help animals,’ and then they get led through the situation,” Wicke says. For example, the charity may not be clear that a critical part of serving on a board is fundraising. “They may not say it up front. Business execs tend not to ask enough questions.”
4. Do your homework. It is important to properly research any group you’re interested in supporting. Wicke suggests you meet with the leadership and ascertain their personalities, whether the board has strong involvement, and whether the treasurer has strong internal controls. Also, research the nonprofit’s financials by using a tool such as GuideStar, and ask for their audit report. “If the board doesn’t have a clear sense of its job, the nonprofit can be open to fraud,” she says.
5. Meet the press. Look at how your charity is presented in the news. Are they receiving positive press about funding a new program, or is the public questioning what they are doing with donations?
6. Asses their strategy. Your charity of choice also needs to have a strategic plan, preferably two to three years out. Does the plan align with their core values? Does it align with your company’s values?
7. Solicit feedback from partners. Check in with your business partners and get their take on your philanthropic plans. Is there anything they don’t want you to get involved in? What is their reasoning?
8. Communicate your values. Consider having someone in your company keep a running list of groups your employees support, as well as the top five causes your firm wants to be associated with. If you make your core values clear to your staff and executives, you will likely have a wealth of reputable causes to choose from.

With the holiday season in full swing, it is more important than ever to make sure your company is aligned with respectable charities. By articulating your company values, doing your homework and keeping the lines of communication within your organization open, you will greatly minimize your chances of supporting a disreputable group.

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