Keep Giving Back In a struggling economy, entrepreneurs get creative with philanthropy.
By Carol Tice Edited by Dan Bova
Opinions expressed by Entrepreneur contributors are their own.
As food prices soar, margins are thinning at Seattle-based Gourmondo Catering Co. But co-owner Alissa Leinonen Gallagher says the $2.5 million company won't reduce its charitable donations--around $10,000 in cash and $40,000 in food and labor in 2007--despite the leaner days. "Profit isn't as strong, but we're profitable," says Leinonen Gallagher, 38, of the company she founded with Ron Johnson, 45, in 1996. "We need to continue supporting the causes of our clients."
That's savvy thinking, says Kris Putnam-Walkerly, a philanthropy consultant. She says many small businesses cut back in a downturn, and that can be a mistake, as companies lose both the community goodwill and the marketing value built up over the years. "It takes time and effort to determine your goals, find the organizations you want to support and rally employees," says Putnam-Walkerly. "It can take a while to build that back up if you have to start over two years later."
At energy-sector hedge fund company Lucas Capital Management, which manages more than $1.6 billion, soaring oil prices mean business has never been better. Last year, the Red Bank, New Jersey, company and its employees gave more than $500,000 to donor-advised funds at the Community Foundation of New Jersey, and Lucas principal Russell Lucas expects to top that this year. But as former trustee of the Community Foundation of New Jersey, he's heard from enough entrepreneurs who donate through the foundation to know his company is the exception. "I'm hearing giving levels are super low," he says.
If you're short on funds but still want to help out your community, be focused and strategic, making sure the giving you do participate in is impactful and resonates with employees and customers, says Susan Hyatt, a business philanthropy coach. Your company could loan out executives, provide mentoring, donate goods or participate in walkathons. Entrepreneurs can also help charities raise their profile by chairing a fundraiser or serving on the board, which will inspire others to give as well.
Rally Software founder and CTO Ryan Martens, 43, found similar ways around giving straight cash. Five-year-old Rally, which facilitates software development, has yet to reach profitability. So for now, the Boulder, Colorado, company's main gift is volunteering 1 percent of employees' work hours. "We're continuing to volunteer," says Martens. "That would never change." Recently, the company participated in a volunteer day and a fundraiser for a local radio station.
Says Hyatt, "This economy forces people to be more creative and rethink the best way to support their local communities."
