Spring 2011 Feature Article
Present Tense
Like any other investment decision, central Minnesota businesses
employ strategies for their charitable gifts.
By Lawrence Schumacher
Photography by John Linn
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| CHUCK ALBRECHT, CEO, MID-MINNESOTA FEDERAL CREDIT UNION: ."There are ways for businesses to do more than just donate cash." | ||
At St. Cloud-based Marco, which provides technology and other services to businesses, employees offer discounted tech support to nonprofits. They also loan out laptops and projectors and give free or discounted copy and print services.
Those are just a few examples of how central Minnesota companies support their communities through business giving, a term that used to refer mostly to cash donations to charities.
While businesses still believe in giving money—according to the Minnesota Council on Foundations, Minnesota businesses gave $669 million in grants from June 1, 2008 to May 31, 2009, a 14 percent increase over the previous year—as needs grow, they’re stepping up in all kinds of creative ways to help their communities.
“There are a lot of requests out there and a lot of them are worthy,” said Chuck Albrecht, the CEO and president at Mid- Minnesota. “Nobody has enough money to say yes to all of them. But there are ways for businesses to do more than just donate cash, if you have a good plan in place.”
Companies who want to create or expand their business giving programs can benefit from taking time to analyze and develop a comprehensive plan that incorporates donations of cash, services and employee time, said Jackie Reis, who heads the Minnesota Chamber of Commerce’s Business Gives program.
Getting Started
For small business owners in outstateMinnesota communities, saying no to requests for help can be hard because they come from friends, neighbors and people they see every day.
The Minnesota Business Gives program helps educate business owners who want to support their communities on strategies for smart giving—what Reis describes as “when to say yes and how to say no.”
The program’s origins go back to an effort begun in 2001 that included the Chamber, the Initiative Foundation and several other foundations interested in promoting business giving. The need for these services continues to be profound. “A small percentage of businesses have written guidelines or criteria for who to support and very few have a budget for their giving,” said Reis.
The Initiative Foundation also has many resources available to help small businesses figure out a giving program, said Kathy Gaalswyk, the foundation’s president. Those services can include establishing business giving funds, advising businesses in the grantmaking process and raising questions to inform and educate businesses on setting up giving programs.
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| JEFF GAU, CEO, MARCO: "You have to think about the personality of your company and who buys your goods and services when you give to causes. It's an extension of a company's marketing efforts." |
Having a good giving plan can also help businesses avoid controversy. Reis advises business owners to separate their own personal interests from what types of charitable giving fit their companies. It’s a sentiment echoed by Jeff Gau, CEO at Marco. “You have to think about the personality of your company, who buys your goods and services, when you give to causes,” he said. “It’s an extension of a company’s marketing efforts. We like to do what our customers like us to do.”
For that reason, Marco stays away from donations to political and religious groups, aside from humanitarian and service organizations such as Catholic Charities.
Better Business
At Marco, “doing well and doing good,” has been part of the company’s culture since it was founded in St. Cloud in 1973, said Gau. The company was one of a handful in outstate Minnesota that qualified for the Minnesota Keystone Program, which recognized companies that gave five percent or more of their pretax profits back to the community.
The employee-owned company won the 2009 Business Award in Philanthropy from the Central Minnesota Community Foundation, and in 2008 was recognized by the United Way of Central Minnesota with a Community Builder award. A committee of seven employees that is chaired by a non-managerial employee meets monthly to decide on charitable requests of $500 or less, drawing on a budget based on setting aside a percentage of the company’s pretax profits.
“In smaller towns, especially where resources are limited, employers play a pivotal role in improving the health of their communities through their giving.”
- Kathy Gaalswyk, Initiative Foundation President
For larger contributions, Marco’s management team reviews long-term commitments,
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Mid-Minnesota Federal Credit Union decentralizes its giving, allowing branches in Cass, Crow Wing, Douglas, Morrison, Todd and Wadena counties to decide how to respond to local requests for donations of $500 or less. “It seems appropriate to tie the levels and decision-making to our membership,” Albrecht said. “As our membership grows in a community, we’re able to give more back to it and they have more control over how it’s spent.”
The credit union’s philanthropy guidelines emphasize support for education and families, especially other organizations that provide services to individuals and communities in which they have branches, Albrecht said.
Focused Philanthropy
Hunt Utilities Group in Pine River focuses its philanthropic efforts on community and economic development, including clean and renewable energy development, said LynnHunt, company cofounder and chairwoman. The company even set up a separate foundation, Happy Dancing Turtle, that supports food and water, energy and environmental efforts.
The company was a co-sponsor of an Initiative Foundation forum in February that looked at long-term issues affecting the region. It also sponsors clean energy conferences, community gardens, farmers markets and other efforts that promote sustainability.
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| Hunt Utilities Group (HUG) in Pine River set up a separate foundation called “Happy Dancing Turtle” that supports sustainable communities and environmental preservation. Pictured are company cofounders Lynn and Paul Hunt. |
Every giving avenue is planned out in advance.“We analyzed what we spent in the past, looked at which ones we wanted to continue to sponsor,” she said. “We looked at specific amounts to set aside for employee matches, and looked for a percentage for new giving.”
Most companies don’t need to be motivated to give to charitable causes, according to Reis. Instead, they need to see how they can manage the requests they get and decide how much they can give.
Every company has different needs and goals for their giving programs, but foundations can make it easier for businesses to give back to
the community, said Lee Hanson, Initiative Foundation board chair. Establishing an endowed fund can help a company maintain a steady charitable presence through good years and bad.
“The greatest advantage for establishing an endowed fund is flexibility,” Hanson added. “Management can choose to grow their fund at year-end when net profits are known, and they also have time to be strategic with their charitable distributions. That way, you’re not playing ‘beat the clock’ in late December, and you have the option of involving an employee team.”
“Skilled business owners give from their hearts, but they write the checks with their heads."
- Lee Hanson, Gray Plant Mooty
Creating a fund before retiring or selling a business is a popular way for philanthropic business owners to direct more of their company’s worth to charity without having to pay taxes on the fund. Companies don’t generally claim state tax deductions for their philanthropy, preferring to write them off as a business expense,Reis said. The additional paperwork involved in deductions often makes it impractical for small businesses, which are the majority of the participants in the Minnesota Business Gives program.
Reis recommends companies develop a giving plan, review it every year to look back at what they’ve done, and adjust it to look ahead to the next year. “Skilled business owners give from their hearts, but they write the checks with their heads,” Hanson said. IQ
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