How not to support your local sheriff, schools, and charities

Through their very existence, local businesses support their communities. They provide jobs and make purchases that inject money into the area’s economy, and they pay taxes that fund local government services. But when most business owners and managers talk about community support, they’re referring to something else.

It’s the requests from the high school band for donations for new uniforms, the Girl Scouts who want to sell cookies on the doorstep, the Little League teams that are after sponsorships, and the community theaters that need ads in the program for their next production. Most businesses are eager to support these activities, but the number of requests can be overwhelming, often exceeding the available budget by several times.

Further complicating this problem are some “fundraising” companies that are strong on sales techniques but weak on integrity. Typically located out of town, they use phone solicitors to convince businesses that they’re conducting a fundraising effort for a local organization such as the high school’s basketball team or the Sheriff’s department. In return for a “donation,” the business receives its logo on a trinket or a small ad on something else of questionable value. The solicitors lead the business to believe that the proceeds will go to the organization. Usually, only a tiny percentage of the money actually finds its way to the group whose name is being used.

That’s why I’m always wary of calls from these companies (some of which do business under several different names, but from the same area codes). I never recommend that a client make a donation without first checking with someone at the local organization to verify that the group has actually authorized the effort and stands to gain something substantial from it. I’ve discovered that nine times out of ten, these calls are just a gray area away from being a scam.

Even legitimate fundraising companies typically take a healthy share of the money they raise, so the dollar you donate to support the cheerleaders or the Humane Society may actually shrink to half that by the time it ends up in their coffers. Same goes for many fundraisers in which the groups have to purchase and resell something.

“…take a little bit of time to talk with the officials who run them.”

A better way to support groups like the Sheriff’s department, the high school’s athletic department, local service organizations, and all the others who regularly request funding is to take a little bit of time to talk with the officials who run them. Ask them about specific needs and how you can help. Nearly every group has a wish list, whether that’s a printed document or ideas in the director’s head.

Asking them, “We were thinking of giving you about $100 this year. What do you need that costs that much?” does more than simply give you an alternative. It shows the group that you have more interest in them than simply saying, “Here’s fifty bucks. Go away for another year.” It lets you build a relationship with the group’s leadership, which is particularly important if you do business in a small or close-knit community. Most important, you can give with the confidence that your money is working more effectively for the group and accomplishing more. (Any organization that won’t take the time to talk with you doesn’t deserve your money. Period.)

Another way to deal with the requests is to see if the organizations need any non-monetary support. For example, an organization I work with occasionally has a need for food at meetings and other sessions, and some local restaurants provide that in-kind support rather than a cash donation.

The advantage of this approach is that the value to the organization is far greater than the actual cost of the donation. If the organization had to purchase the meals at retail prices, it would first need to raise enough cash to be able to afford them. And rather than dip into its cash flow, the restaurant can use on-hand inventory (particularly surplus items with limited lives) to make its contribution. Plus, the restaurant’s donation gives attendees an opportunity to sample its menu, which may trigger future sales.

Perhaps the biggest challenge for many local businesses is determining which organizations they’ll support, because any business that tries to fund every request will soon find itself out of business. Banks in particular grapple with this issue, largely because many in the community see them as a limitless source of funds. After all, they can simply reach into the vault and grab another stack of twenties.

I counseled one bank client to establish a committee of employees to determine which groups would receive funding. The committee distributed a list of all the organizations to which the bank had donated money over the past couple of years, and asked the employees to select the three or four organizations they thought were the most important to support.

Once the responses were in, the committee grouped them into categories such as “youth athletics,” and determined which categories had the greatest support. The top three were designated as the categories the bank would support for the next two years, when the committee would repeat the process.

The approach worked well on several levels. First, the employees correctly felt that they were an important part of the decision-making process. They also became aware of just how much support their employer provided to the communities they called home. Limiting giving to the chosen categories allowed the bank to focus its dollars in those specific areas, where they could have more impact. And the bank’s top executives were removed from the decision, so they could tell other organizations who contacted them that “our employees have decided that we’re concentrating our giving this year in these areas, so we can’t help you at this time.”

Whether or not you go to the lengths of polling employees and forming committees, the key to making community support more effective and less of an annoyance is to approach it through some kind of organized plan. That way, you can parcel your dollars out in ways that have more impact than simply letting every opportunity nickel-dime you into frustration and bankruptcy.