The dos and don'ts of corporate giving

UAlberta research shows how companies can best influence employee attitudes with their philanthropy this season.

Corporate giving done right: WestJet's annual "Christmas miracle" campaign targets high-visibility recipients, involves employees directly and lets them (and the world) see the impact of the donation.

Turns out corporate financial gifts keep on giving: a University of Alberta study shows that donations benefit not only recipients, corporate reputation and community connection-building, but also employee attitudes.

"Our study is the first of its kind to look at how financial corporate philanthropy can be strategically managed to maximize its impact on employees," said Emily Block, a strategic management expert at the U of A. "This is important for engaging today's employees, especially millennials, who value social responsibility. There's even evidence that a corporation's philanthropy can boost employee engagement."

So companies can get the most impact for their donated dollars this Christmas, here are some strategic dos and don'ts based on the U of A study, recently published in the Journal of Business Ethics.

Don't: Leave the beneficiary selection up to different offices or departments

The theory is that employees will enjoy a stronger connection with the corporate philanthropy effort if it is directed at a local charity. But the study showed the opposite was true.

"Employees' attitudes were most positively impacted the bigger and more strategically focused the recipient," said Block.

Why: Employees want to experience a sense of pride in their employer. Giving to a bunch of lesser-known charities doesn't generate the same level of pride as giving big to a big-name charity.

"The good news is that companies won't need to choose between high-visibility strategic targets that might have reputational benefits-a big trend currently-and local targets with a more personal connection to the office," said Block.

Do: Arrange for employees to see the impact of their dollar first-hand

No surprise here-employees have a much stronger connection to a donation if they have "beneficiary contact" or direct interaction, according to the study.

Why: "It makes an abstract giving experience real, and drives home the benefits of giving," said Block.

Don't: Let employees forget they've got skin in the game

The study showed that despite numerous programs in place that involve employees donating personal money alongside corporate money to a charity-think United Way-the impact of this practice on employee attitudes may be minimal.

Why: The study provided no clear answer for this surprising finding. But Block said companies shouldn't discard the approach.

"Instead, make sure the employee donation is linked strongly with the corporate campaign, and skip the practice of payroll charity deductions. When we don't think about the actual donation, there's too much cognitive distance for it to inspire and empower," she said.

Do: Pair these strategies together

"One could imagine an organization realizing substantial benefits associated with increasing their focus on strategically selected partner organizations, and then providing their employees with the opportunity to visit or volunteer at these organizations to see the impact of their organization's giving," said Block.

Why: This study shows that applying a little strategy to corporate philanthropy can deepen the prosocial impact to include internal outcomes-namely, boosting employee motivation and performance.