Sweet charity: How giving back is helping business’ bottom line
Hey, big spenders: Corporate giving in Las Vegas got hit particularly hard in the Great Recession. But giving back is actually helping Las Vegas businesses.
Private foundations in Clark County (ranked by total assets in 2008)
Donald W. Reynolds Foundation - $807,623,434
Englested Family Foundation - $246,248,944
Cyrus Tang Foundation - $101,604,550
Thomas Spiegel Family Foundation - $77,036,549
Dr. Miriam and Sheldon G. Adelson - $53,588,117
Lied Foundation Trust - $36,509,511
Tony and Renee Marion Charitable Foundation - $26,891,441
Galil Foundation - $20,886,152
Tuscany Research Foundation - $16,132,475
Greenspun Family Foundation - $13,867,876
Richaed Tam Foundation - $13,629,694
Gilcrease Orchard Foundation - $13,485,423
The Hahn Family Foundation - $12,872,372
William Lion Penzner Foundation - $11,194,198
Jackie and Bertie Gaughan Foundation - $10,611,888
Eleanor Kagi Foundation A Lynn M. Bennett Legacy - $10,303,083
Source: National Center for Charitable Statistics
Click here for complete list.
Beyond VEGAS INC
Darcy Neighbors knows first hand that philanthropy is not only good for the soul, but great for the bottom line. In business, giving back is a selfish act—and that’s OK.
All credible studies show that businesses that actively donate to charitable causes increase their brand awareness, boost employee morale and fatten their balance sheets. As indisputable as these facts may be, many Las Vegas businesses are still reluctant to get into the charity game, particularly since the onset of the Great Recession.
Business development was never Neighbors’ intention when she started a pajama drive for abused and neglected children eight years ago in Las Vegas. But what it showed her is the unlimited potential of people and businesses—even if they don’t realize it yet—to make a difference in this community. What they need is someone to get them involved and show them the way forward to build on the philanthropy of donors in Las Vegas whose generosity helped mold UNLV, build the Cleveland Clinic Lou Ruvo Center for Brain Health and benefited numerous charitable organizations.
Neighbors, the founder of CIM Marketing Partners, discovered philanthropic efforts by accident when she attended a “Leadership Las Vegas” program through the Las Vegas Chamber of Commerce. The program introduced her to Child Haven, a Clark County shelter for abused and neglected children. When Neighbors visited the children, she was moved to tears. She called her mom, Alma, and told her of the plight of the at-risk kids and how she had to do something.
Neighbors’ mom suggested a drive that led to the DJs for PJs program to collect pajamas for the children at Child Haven. Neighbors would work with radio stations on promoting a one-day event where listeners could drop off pajamas or make donations toward purchasing new pajamas.
The drive has spread to 13 charities serving children with more than 65,000 pairs collected since 2003. And it all started because Neighbors attended a Las Vegas Chamber program.
Neighbors’ philanthropic awakening spurred her employees to volunteer and set in motion what she sees in our community—philanthropy and volunteerism as an ingrained reality in our city’s corporate culture.
But every empirical measure of Las Vegas’ charitable side belies Neighbors’ ambition for her city. The numbers aren’t very charitable at all.
Nevada was recently ranked among the lowest states in the nation in terms of people who donate a percentage of their discretionary income to charity. It’s less than six percent, according to federal statistics that track those who itemize deductions on their income taxes. Nevada ranks roughly the same as West Virginia, New Jersey and some states in New England. Nevada is nowhere near Utah, whose residents give more than ten percent of their income to charitable organizations.
A study by the National Center for Charitable Statistics at the Urban Institute tracking tax returns shows Nevada ranked 35th in the nation in 2008, with the average charitable donation per return at $1,013. This is despite our state having the 18th-highest adjusted growth income among all states. That’s one of the widest disparities between income and giving in the nation and highest east of the Mississippi River. Utah was No. 1 in giving despite being 24th in income.
Neighbors, however, isn’t deterred by these numbers because they don’t match what she sees every day.
“The research I’ve seen is that Vegas is usually on the bottom of the barrel for any kind of report with the least giving and least volunteerism, but what I see on the ground here is very different,” she says. “I know we have a long way to go, but I think we have the foundation because I see the great philanthropy in this city every year.”
Las Vegas has a core group of businesses and individuals who have led philanthropic endeavors and are the go-to group that makes a difference in the lives of those served by nonprofit groups. Particularly during the boom years, wealth generated by voracious growth found its way to nonprofits serving the needs of the community from abused children and food pantries to education and the arts.
But the recession has taken a toll on charities’ largest contributors. Like a basketball team that has star players but little depth, the recession shows Las Vegas needs to build up its bench when it comes to philanthropy.
No state’s charitable giving has fallen farther than Nevada’s between 2003 and 2008, as the city dealt with the housing market crash, stalled construction and beginnings of the Great Recession. The average contribution per tax return fell by 8.3 percent between 2003 and 2008, according to the National Center for Charitable Statistics at the Urban Institute. The nation as a whole rose 8.3 percent during that time span.
This disastrous economic climate has caused a shift in the approach businesses are taking: They’re giving less cash and focusing more on employee volunteerism and in-kind services, says Stacey Wedding, whose consulting firm Professionals in Philanthropy advises individuals, corporations and nonprofit organizations. Neighbors has also seen how the economy has affected her drive. DJs for PJs collected 13,900 pajamas in 2007, but when the bottom fell out of the economy, the number fell to fewer than 6,000 in 2008. It has slowly risen since then with more than 8,000 pajamas collected this year, but still well below where it was four years ago.
Many other nonprofit organizations have felt the pain of the recession as well. Several are hanging on by a proverbial shoestring.
“There’s no doubt so many nonprofits are hurting and have closed their doors because there’s only so many dollars to go around,” Neighbors says. “We’d be in much better shape if we had depth.”
But that doesn’t happen overnight. Megaresort corporations, once criticized for not giving enough, have stepped up over the years. But Las Vegas still needs to treat philanthropy more like a business. Companies and individuals whose time and money have gone untapped could have softened the blow of recessionary funding cuts to Las Vegas nonprofit groups.
“I think we have a lot of philanthropy-minded people in this town, and Nevada gets a bad rap,” says Paul Stowell, a senior vice president with City National Bank. “There are a lot of people who are giving, but we need to do a better job with the smaller companies and people who move here to show them how they can give.”
Wedding, also a volunteer on the board of Nevada Gives, a nonprofit group that aims to increase the awareness of philanthropy, says Las Vegas doesn’t have a mechanism in place to track local philanthropic and volunteer efforts so it’s difficult to compare our city with others nationwide that do such tracking.
“While we don’t have the hard data to support it, this is a town with a giving spirit,” Wedding says. “When needs come up and causes happen, there have been countless examples of people [and businesses] stepping up to the plate.”
Being a relatively young city with a highly transient population, Las Vegas hasn’t had much time to grow philanthropically.
“If you look at older cities, you have families and generation after generation of money that was given to charities, but for such a new city we don’t have those kinds of roots,” Neighbors adds. “We have a lot of people who aren’t invested in the community, and it will take a while for them to become vested.”
The problem with individuals applies to businesses as well, Wedding says. Many companies in Las Vegas have corporate headquarters elsewhere, and those firms almost always donate where their headquarters are based.
But there are bright spots.
Cass Palmer, president and CEO of United Way, says despite the slowdown in the economy, his organization has just had its best fundraising year ever at $12.4 million. Las Vegas is strong in donations per person but it drops off in volume because similar sized cities may have twice or three times the donations, he says.
“We’re still trying to build the capacity in this town that other cities have been doing for hundreds of years,” Palmer says. “It’s going to take time for that outreach, and it’s hard to do that when you have limited staff.”
United Way is, of course, just one of numerous groups that compete for the same pool of limited resources.
The answer to limited funds remains to deepen the pool of donors, which may become easier as the city diversifies its economy and builds a bigger philanthropic base, Neighbors says.
But it will take education and commitment to reach out to businesses and individuals who haven’t given in the past because they don’t know how to or haven’t been asked to do so. Philanthropy is a learning process, and Neighbors admits without going through the chamber program, she wouldn’t have started her effort.
“I just don’t know whether it’s fear or they just don’t understand how to begin,” Neighbors says. “I just dove in because I know I had to do something. I don’t want to be a preacher of philanthropy but if people could just come up with a concept and give a little something back, it can make a big impact on a lot of people.”
Many in the business community feel like they’re giving what they can but feel there a lot more companies that can be tapped besides the Fortune 100 and Fortune 500 companies.
“It’s a small group who can sit together at the same table, but we need more,” Wedding says. “We have to show people and businesses there are tangible economic benefits.”
A 2010 study for a corporate social responsibility branding survey found that 75 percent of consumers who read about a company’s social agenda on its website were more likely to make a purchase from that company, Wedding says.
Neighbors says she never had that expectation when she started the pajama drive, but said it helped generate exposure for her marketing and advertising firm and win awards.
“You don’t do it to get recognized, but it has led to clients, especially those who understand philanthropy and want to work with someone who has the same mind-set,” Neighbors says.
Corporate giving can even help change the perception of an industry.
SuperPawn, which has 24 locations in Las Vegas, donates about $150,000 a year to charitable organizations and gives another $50,000 in merchandise, says Caroline Ciocca, the company’s director of community relations. The company has donated money supporting food banks, education, scholarships and family wellness, and has steadily increased what it has given during the economic slowdown, she says. SuperPawn also has an annual drive from which all proceeds benefit the Juvenile Diabetes Research Foundation.
“It’s great advertising because your employees become walking and talking billboards,” Ciocca says. “They have a better attitude and positive approach to customer service and it reduces turnover. ... They want to work for a company that cares.”
Jim McMichael, senior marketing manager at Fashion Show mall, says philanthropy has proved to be a great vehicle to reach potential customers. As much as 35 percent of Fashion Show’s customer base is locals, and that grows as high as 85 percent in December. The mall not only donates space for charities to use but also provides items for auctions that help the groups raise money. It may combine gift cards with dining or a shows for packages that bring bidders to their venues.
“Sometimes people are hesitant to be on the Strip, but this is a way to reconnect with them and remind them we’re here,” McMichael says. “It’s a marketing effort to extend goodwill and brand presence and help local communities raise funds. Plus, we reach quality clients.”
The casino industry has seen the benefit of community involvement on its bottom line.
Wedding says the reputation of casinos has improved over the years since a report was released a decade ago that didn’t cast a positive light on their corporate giving. Casinos have also led Las Vegas with employee volunteerism.
“They’re no longer looked at with a Black X with helping this community,” Wedding says. “Everyone looked at the gaming industry and what they were doing, and they really stepped up.”
The Caesars Foundation, for example, gives about $10 million a year nationally with about 40 percent of that going to organizations in Las Vegas, says Thom Reilly, the foundation’s executive director. It also works with its employees on volunteering.
“I think it helps the bottom line because people want to patronize places that are good corporate citizens,” Reilly says.
But Las Vegas can’t solely rely on casinos and other large donors to sustain nonprofit organizations and take care of the community’s needs that government can’t or won’t address.
Wedding has something to say on the subject.
“What needs to happen is for large donors to come forward and invest in the infrastructure needed to grow the business of philanthropy in Las Vegas,” she says. “We need those who’ll invest in the tools to teach businesses how to give back. It really goes back to a funding issue. Organizations would love to do this but they don’t have the resources.
“Most businesses are willing to give. They just have to be approached and asked and be made aware that taking a larger role in the community is good for the bottom line,” Wedding says.
Admitting that you make money and doing good in the world are no longer dirty little secrets. It’s called creating ‘shared value’.”
Before that can happen, however, businesses need to be taught about philanthropy, Neighbors says. It’s a valuable lesson that will have a lasting legacy.
It’s not unlike the proverb of giving a man a fish to feed him for a day or teaching him how to fish so he can feed himself for a lifetime.
It’s much greater than large donors writing $10,000 checks, Neighbors says. She sees it when a young boy comes to the pajama drive and empties his piggy bank on the table to make a donation or a little girl who drops off a pair of pretty pajamas to help kids who need them.
“We can all go about our day, but we aren’t going to take one dime when we leave this earth,” Neighbors says. “What we can leave is what we teach people about philanthropy, and it will stick.”
Sounds like smart business, no?