We all know that giving is good for the soul. But is giving good for business? Some believe that being generous inevitably comes at the expense of the bottom line. But perhaps the evidence points to a different result.
In April 2015, Howard Schultz announced that Starbucks would be providing free college educations to part and full time employees through Arizona State’s online degree program. From Starbucks’ point of view, this is a perk worth providing. Not only will they attract and keep higher quality employees, but it also boosts their brand image with customers who will have another reason to be proud to buy from Starbucks. Starbucks has a history of being generous to its employees, providing stock in the company, and health insurance to all. According to Schultz, these employee benefits are not an expense, but an investment.
If you are a small business, you might think that this level of giving is not feasible for you. Jennifer Piallat, the owner of the San Francisco restaurant Zazie, (www.zaziesf.com), a small neighborhood bistro, would argue the opposite. Since Jennifer took ownership of Zazie in 2005, she has provided every staff worker – from one day per week part timers to full time employees – full health and dental benefits, paid sick leave and a 401k with employer matching. You might think that this impacts her bottom line, and it does, but not in the way you imagine. While a typical “good” restaurant profit margin is 5%, Zazie’s is often above 20%. Jennifer attributes her profitability to her extremely low employee turnover in an industry known for very transient employees. Turnover is expensive, plus experienced and engaged employees are much more efficient. Zazie treats their employees well, and in return, they attract and keep high quality people. They even have a dishwasher who has been working there for 20 years.
Jennifer Bernheim of Martinb + Company PR (www.martinbpr.com) would also agree that giving is good for business and very doable, even for small businesses. Martinb specializes in helping entrepreneurial companies set up give-back programs if they don’t already have one, and get the word out about the good works they are doing in order to maximize the impact of their programs. While generosity to employees is one way to give back, generosity to outside causes is also beneficial. According to Jennifer, “every business can take the opportunity to give back while moving their business forward. The “give back” does not need to be monetary. A small business can look for unique opportunities to utilize core business offerings in the communities they serve. A genuine “give back” could help elevate brand image and such initiatives boost employee satisfaction and retention – a win-win for both the business and the community.” For example, some companies organize community service days, where employees volunteer at a local organization or community event, creating good will among the employees, and throughout your community.
Other businesses, such as Tom’s Shoes, have built giving into the very foundation of their business model with their one-for-one policy, giving one pair of shoes to a needy child for every pair purchased. Tom’s has built a hugely successful, for-profit business based on the idea of giving and doing good in the world. They not only give away millions of shoes each year, but they have also created jobs in economically depressed areas of the world, further supporting their mission. The growth of the company is fueled by consumers who feel good about buying Toms shoes and being part of their mission.
The bottom line – doing good and giving back, either to your employees or to a cause you believe in, might actually boost your bottom line as well! So yes, giving is good for business.