5 Steps to Creating a Corporate Philanthropy Strategy That Resonates With Millennials
Corporate philanthropy strategies are changing at a rapid pace. Supporting a specific cause or charity was once viewed as a simple method for businesses to enhance their brand image and earn the loyalty of customers. Today, corporate philanthropy efforts are much more complex due to the transparency created by social media and the change in values of the generation with the most buying power– Millennials.
Businesses still have the power to engender social change by using resources to contribute to the community in a positive way. However, businesses must leverage this power in accordance with a new set of customer values in order to maximize the impact of their efforts and gain the loyalty of Millennials.
“Millennials are hyperaware of, and have high expectations for, corporate social responsibility efforts to make the world a better place — for themselves and broader society.”
Step 1: Establishing the Necessity of a Corporate Philanthropy Strategy For Your Business
Traditional philanthropy involves a brand attempting to enhance its reputation through a large donation to a specific charity as a PR method. Consumers now expect businesses to be involved in some type of corporate responsibility effort. The following statistics from the 2015 Cone Communications Social Impact Study display the importance of executing a corporate philanthropy strategy:
- 90% of consumers are more likely to trust companies that support social and environmental issues.
- Given a similar price and quality, 90% of consumers stated that are likely to switch brands to one associated with a good cause.
The study also exposed that “Millennials are hyperaware of, and have high expectations for, corporate social responsibility efforts to make the world a better place — for themselves and broader society.”
While having a corporate responsibility effort established is key, successful businesses do not stop there. Philanthropy, in fact, can be utilized to create a competitive advantage. However, Millennial values and the use of technology must also be addressed in order to create a truly comprehensive strategy.
Step 2: Understanding Who Millennials Are and How They Impact Your Business
Millennials Have the Purchasing Power
Millennials are defined as consumers between the ages of 18 and 36, tech savvy, and constantly connected through digital media. According to pewresearch.org, Millennials have now overtaken Baby Boomers as the largest generation in America, with a population of 75.4 million.
Even in the U.S. alone, the buying power of Millennials is staggering. An article in Forbes noted that Millennials are estimated to be spending $200 billion annually by 2017 and $10 trillion over their lifetimes as consumers. With this in mind businesses must jump on board to capture the loyalty of this key generation, as Millennial spending power is only projected to increase as they age and are more established in their careers.
“This new generation of students has social consciousness built into their DNA.”
Millennials Are Generous
Millennials have a bad reputation to say the least. Surprisingly, the generation repeatedly labelled as selfish, lazy, and entitled– we all know the list goes on– is the generation that is the most giving. According to the 2015 Millennial Impact Report, 84% of millennials made a charitable donation last year.
In an interview with the Huffington Post Laura Arrillaga-Andreessen, a Strategic Philanthropy professor at the Stanford Graduate Business School, notes the shift in values she has seen from Millennials in her classroom stating that, “This new generation of students has social consciousness built into their DNA.”
When businesses consider Millennial buying power along with trends in Millennial generosity, the quick solution in establishing a corporate philanthropy strategy is the traditional, unchanged method:
Choose a charity to support and advertise what a great company we are for giving back to the community.
Establishing some type of corporate philanthropy strategy is definitely a good start for businesses, but it is not enough to truly gain the loyalty of the Millennial customers. Two issues are identified when brands create a generic corporate philanthropy strategy:
- It is now so commonplace for a brand to associate itself with a cause or charity that its philanthropic efforts go unnoticed by consumers, blending in with all of the other businesses.
- The brand’s charitable efforts are noticed by customers, but these efforts do not resonate with customer values.
In order to create an effective corporate philanthropy strategy and gain loyalty from Millennial customers, a business must consider several crucial values.
Step 3: Leverage Insights on Millennial Values
Businesses need to understand several key values of Millennials, then use these values as a baseline in building the corporate giving strategy. With these values in mind, it becomes clear exactly why the traditional method described previously (businesses choosing only one charity to support in their corporate philanthropy efforts) does not evoke brand loyalty in Millennials.
Millennial Value #1: Personalization
Millennials have grown up in a world of instant gratification, able to choose a products with the exact features they prefer.
Most businesses know that personalization of products or services is key to success, but this mindset is seldom applied to corporate philanthropy strategy. Businesses lag behind in giving their customers personalization in their corporate philanthropy strategy because they assume the one size fits all approach will suffice. Generic giving campaigns are no longer effective, as the connection between the brand and the charity is most often lost in the data overload that Millennials experience on a day to day basis.
In order to gain loyalty from corporate giving efforts, businesses must cater to the unique interests of their customers.
Millennial Value #2: Making an Impact
Millennials want to make a difference in the world and yearn to be a part of a cause bigger than themselves. In fact, 61% of Millennials are worried about the state of the world and want to make a difference. This generation’s primary motivation behind donating to charity is not receiving the tax benefit– Millennials truly believe in the causes that they support and will be loyal to businesses that do the same.
Businesses who want their charitable efforts to be noticed by Millennials need to go a step past the traditional strategy by donating a portion of profits based on a charity that is specified by each individual customer. This means that with each transaction, the customer chooses where a portion of the business’s profits go.
Step 4: Understand How Technology Impacts Corporate Philanthropy
Philanthropy, the Internet, and Globalization
In addition to understanding the interests and behavior of the Millennial generation, businesses must also consider how advances in technology affect corporate philanthropy methods.
“Over the last 14 years, technology has dramatically changed how we create, consume, connect – and philanthropy is no exception”
Technology has drastically enhanced the ease in which people can communicate, with social media giving Millennials a platform to spread their ideals at a rapid pace. The days of direct advertising are dwindling. It is becoming increasingly important for businesses to stay in touch with customers in a digital way– not only in communicating their products, but in communicating their corporate philanthropy strategy as well.
Technology is an essential component of a brand’s philanthropic efforts, but it doesn’t stop at making sure the brand is actively displaying contributions to the community online. In her interview with the Huffington Post, Laura Arrillaga-Andreessen, the Strategic Philanthropy professor at the Stanford Graduate Business School, describes that, “Over the last 14 years, technology has dramatically changed how we create, consume, connect – and philanthropy is no exception… Technology is disrupting philanthropy in myriad ways – impacting the scale, speed and cost at which we can create change and who gets to participate.”
The internet allows for the discovery of a larger variety of charitable causes than ever before, motivating Millennials to create social change not only on a local level, but at a global scale. Millennials are much more aware of global poverty, environmental issues, and other global concerns compared to previous generations.
With such a vast selection of organizations for customers to donate to, business must keep in mind that creating a corporate philanthropy strategy centered around one large, well-known charity, has a significantly lower chance of resonating with consumers than it did in the past.
Philanthropy and Social Media
Through Snapchat, Instagram, Twitter, or Facebook, Millennials update their peers on their purchasing decisions, making it crucial for businesses to gain influence among this generation.
Millennials create a virtual identity on these channels as they communicate their interests in everything from the products they buy to their political views. These interests also include causes or charities, which are typically shared by Millennials for the following reasons:
- To drive change around a cause that is important to them
- To “look good”. In other words, to gain recognition and praise from peers for doing the “right” thing.
Whatever the motivation, businesses can leverage the content their customers share to enhance its brand image as well.
How is this possible?
Well, the business must be associated with the charity or cause that its customer is passionate about. As a result, the customer will be more inclined to display the support of the business on social media because by purchasing products from this business, the customer also supports a greater cause.
The key with leveraging social media in congruence with corporate philanthropy efforts is rooted in the Millennial value of personalization mentioned earlier in this article. The philanthropic acts of a business are not “shareable” for the customer if these acts are not associated directly with the specific charity that the customer values most.
“Businesses must cultivate the Millennial passion for giving and create a corporate philanthropy strategy that resonates”
Step 5: Bringing It All Together- The Final Step For Your Business to Enhance its Corporate Philanthropy Strategy
Ditching the Old School Corporate Philanthropy Efforts
Traditionally, businesses are renowned for launching corporate philanthropy efforts in order to display corporate social responsibility and drive customer loyalty. However, if these businesses aren’t on the same wavelength as Millennials, these efforts will remain unseen.
In order to engage Millennials, businesses must cultivate the Millennial passion for giving and create a corporate philanthropy strategy that resonates. The key for a business to be successful with corporate philanthropy efforts is allowing customers to choose a cause that they are passionate about.
It is arguable that some brands may have success with traditional corporate philanthropy campaigns, attracting consumers who have identified with the one charity. However, if businesses want to stand out from competitors, it is essential to be proactive in catering to the individualistic demands of Millennials instead of assuming that all customers are passionate about the same charity.
Reducing the Complexity of an Individualized Corporate Philanthropy Strategy
This may sound like a complex process, but with the 4ME4WE app customers can easily donate to the charity of their choice through everyday purchases from the brands they love. When the brand effectively communicates its connection to the charity that the customer is passionate about, an enhanced sense of loyalty is achieved.
The brands that jump on board with this approach to corporate philanthropy and understand the benefit of personalized, cause driven marketing will gain competitive advantage over businesses who are not consumer focused.