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The Business of Giving: Give More, Not Less

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The money you give away may help your bottom line the most.

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As the head of a charity, I've been hearing that many corporate charitable budgets are being slashed for 2009. But I found a silver lining: There are some that are actually increasing their giving for this coming year.

Of those people who already donate a whopping 50% or more of their income to charity, the majority plan to maintain their high level of giving, and 18% plan to actually give a little more. This is according to a report from Bolder Giving in Extraordinary Times, a nonprofit that encourages people to become super-donors and exceed the average 2-3% that most households give to nonprofit organizations.

The reason? "Watching people suffer now has strengthened my resolve to do whatever I can do," says philanthropist David Ludlow of Jamaica Plain, Massachusetts.

I've seen this trend in my own organization, the Children's Aid Society. Our longtime committed donors are increasing their year-end gifts because they understand that if the economy is squeezing those at the top of the food chain, it's starving those at the bottom.

If the dollars just aren't there for you to exceed your current level of giving, get creative. Bruce Boyd, partner at Arabella Philanthropic Investment Advisors -- which helps companies and individuals manage their giving programs -- says companies are giving employees paid time off to participate in volunteer projects. Others have increased their matching-gift programs to double or even triple employee contributions. And manufacturers that have a glut of product are donating items to nonprofits for daily use or to be auctioned off for profit.

Intel Corp. (INTC) is a good example of innovative philanthropic thinking. In celebration of its 40th anniversary, the company is awarding grants to organizations whose employees volunteer. The more hours a person volunteers, the larger the grant. The company has also made a $120 million commitment to improve science and math education - an investment that might benefit the company in the future, when it welcomes some of those same students through its doors.

Intel demonstrates that philanthropy isn't just good for those in need - it's good for the donor as well. "There are lots of reasons for companies to be generous that have nothing to do with altruism but instead are focused on the bottom line," Boyd says. "Corporate citizenship is good business."

That's because philanthropy is good for PR and for sales. The competition over consumer dollars -- which aren't being spent as lavishly as before -- is intense. And if a customer has a choice between your product and your competitor's, the fact that you sponsored the last Little League tournament is guaranteed to factor into the decision-making process. Giving locally pays off exponentially.

"Vibrant communities support vibrant companies," Boyd says. "Ensuring that communities are healthy is in the best interest of the company."

So when you look at your year-end balance sheet, resist the urge to slash your charitable giving. See the value in philanthropy, even in difficult times. "We are encouraging our clients to be as generous as they can be," says Boyd. "We also encourage companies to treat philanthropy like any other business venture. Be strategic and thoughtful. Ask, 'What do you hope to achieve? What are the issues you care about?' Use the same principles that apply to building a business."

If you follow Boyd's advice, the money you give away might just be the best investment you can make for your bottom line.
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