I returned last week from the Institute for International Research “Future Trends” conference in Miami with a welcome message for this holiday season – the more you give, the more you get. Below are some interesting takeaways from the conference supporting this message:
Arthur Brooks, an economist, author and keynote speaker, has written about the economics of giving. Based on analysis of several studies, he claims the ROI of individual giving is 3.75 to 1. That’s right, give a dollar and make $3.75, give $100 and make $375. For more on Brooks' analysis, see his recent article in Condé Nast’s Portfolio magazine.
An exciting concept – but how, and why, does it work?
This curious economic case is apparently one that makes good psychological sense. Many of us have heard of a “helper’s high” or the “Mother Teresa effect” – ideas that charitable acts lead to positive feelings. Brooks notes: givers are 33% more likely to say they are happy than are non-givers. Books like Luks’ and Payne’s “ The Healing Powers of Doing Good” or Stephen Post’s “ Why Good Things Happen to Good People” cover the actual change in brain chemistry that occurs after doing something charitable. Giving actually produces endorphins and reduces stress hormones in a similar way that exercise does. And, studies show that people who are happier and less stressed tend to be more productive and more apt to succeed.
Cheryl Swanson of Toniq claims that as a nation we are obsessed with the notion of happiness because we are clearly missing it. Professor Tal Ben Sahar, backs up Ms. Swanson’s point – his course, Positive Psychology, is currently the most popular one taught at Harvard. While Brooks claims the return on giving stems in part from decreased stress, Sahar provides more fodder for this case, noting the costs associated with high stress. He claims that stress is actually the leading cause of productivity losses due to absenteeism, illness, turnover, etc.
America has always been driven by money, and we are clearly seeking greater happiness. In our stressed out, overly “plugged in” state, what better way to achieve both than by giving more of our dollars and our time?
First, imagine the implications for you personally and for your family. Act as a role model for your kids by giving and volunteering regularly, and in turn, teach them valuable life lessons that benefit society while keeping them healthy, happy and wealthy.
Now, take that up a notch and imagine the implications for your company. For Cone, the idea that giving breeds wealth and power is one that we believe in, as we work daily to help companies “stand for something” and focus giving around business-aligned social issues to achieve financial and/or reputational goals. Cone’s research shows that 87 percent of Americans are willing to switch brands, price and quality being equal, if the other is associated with a good cause. Average corporate giving was about .93 percent of pre-tax profit in 2006 (CECP Giving in Numbers 2007) and best-of-breed companies like Target are committed to giving five percent of income to select worthwhile causes.
But don’t stop at just making corporate cash donations. Offer more opportunities for employees to volunteer, encourage individual employee giving by matching donations and recognize top givers/volunteers to increase incentives. Employees will model your behavior as a good corporate citizen and you will breed a happier, healthier workforce...and thus a much more productive one. Cone’s research further shows that 83 percent of employees believe it is important for their company to provide ways for them to get involved in causes. At Cone, we too have realized that ROI is becoming increasingly critical for our corporate clients to “sell-in” strategic philanthropy initiatives or to justify continued giving. Our proprietary Cone Social/Business Return Indicator(sm) can actually measure the specific ROI of your company’s philanthropy program(s).
Extend this notion further and imagine the implication for our country, our economy even. Sir Bob Geldof, musician, philanthropist and founder of LiveAid and Live8 and another conference keynote, shared his prediction that cooperation will be the key driver in the future success of our country, our economy and those of developing and other wealthy nations. He believes the era of competition must be over and the era of cooperation and integration must begin – this includes, in large part, the charity of wealthier nations to benefit poorer ones. Based on the theories discussed above, such charity will also improve the wealth of those nations doing the giving. As Mr. Brooks stated it best, “Charitable giving is not just smart investment strategy, but also a patriotic act.”
-Anne Erhard, Former Account Director, Cause Branding