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3 Questions to Ask Before Building Business Philanthropy Into Your Practice

October 13, 2017

The decision to begin a business philanthropy effort as part of your practice is a very personal one, both in the desire needed to take it on and in the causes you select. But if you’re a practice owner, it’s also a business decision because you need to be mindful of how it will impact your bottom line. Cash donations add strain to already tight budgets, and even organized volunteering is likely to take up some of your staff’s time to coordinate sign-ups, rally the troops, and select organizations to work with.

cheerful-doctor-with-preteen-girl_socFortunately, a charitable effort can benefit your practice in direct and indirect ways, making at least the decision to begin less onerous. Here are just some of the business benefits you could realize with your charitable effort:3

  • Building your reputation in the community
  • Making your community a better place to live
  • Increasing employee respect for the practice’s leaders
  • Making connections and networking

The best place to start when undertaking a formal charitable effort is with a documented strategy. These three questions will help you create one and get started on a path to success.

1. Why Are you Doing It?

The first thing to ask when considering a charitable initiative is why you’re doing it.1 Knowing your motivation will help focus your planning and identify a target charity. Is there a cause you’re passionate about? Having a personal stake in the effort will help motivate you to push the initiative along. Building good will in the community you serve is also a strong motivating factor, and one equally suited to small practices and large groups. Did you grow up in poverty? Perhaps an anti-poverty effort is right for you. Is there a population in your community with underserved healthcare needs? Physicians and nurses are in a unique position as health care providers to serve this need in a charitable way through community organizations and other charitable groups.* Knowing what motivates you will help identify the target of your efforts.1

2. What Will You Do?

The best philanthropic efforts for practices are the ones that build up communities by building relationships with the organizations that serve them. Customers and employees who are already personally engaged in their communities are a good source for identifying the most effective organizations to include in your philanthropic efforts. This is the approach NORCAL is taking with the NORCAL Foundation. By requiring referrals from your employees, patients and business partners, you can ensure that your local communities are being served in a way that fits well with your practice.

Perform all the due diligence when selecting a non-profit organization that you would for a business partnership, including assessing their leadership, financials, activities, track record, etc.2 Also, selecting an organization that ties in closely to your practice makes this much easier because you already have expert knowledge to apply to the assessment and the effort focuses on your practice’s existing strengths, allowing for a more effective transition into philanthropy.

3. How Will You Do It?

A stable, profitable practice is an essential foundation for engaging in philanthropy.2 Since a philanthropic initiative is also a business one — usually including some combination of time, money, or goods and services — your business metrics must be able to sustain the effort you undertake. Your staffing levels must be adequate; expenses must be kept in check, etc. This doesn’t mean philanthropy is not possible for small practices on tight budgets. Coordinating employee volunteering and offering pro bono services are great ways to give back.2 Whatever your formal philanthropic strategy looks like, it will demand the time, efforts, or funding of your business, so there should be room for this in the budget and resource plans.

Identifying the individuals responsible for organizing, coordinating, or managing the efforts is also a good idea.2 Having clearly defined responsibilities — assigned to willing employees, preferably ones who volunteer for the task — will help ensure success. This may be as simple as assigning someone to deliver periodic email communications or invites for a small initiative or as formal as a full-time manager and staff managing a corporate foundation. It’s also important to ensure that new responsibilities don’t add unreasonable burdens to employees’ existing job responsibilities. Engaging human resources could be important to help mitigate these issues.

Document your Strategy

As you work through these questions in your planning stages, begin to formalize the effort with a documented strategy. A documented plan — whether simple or formal depending on the scope of your effort — will help everyone in your organization understand what will happen. Your philanthropic strategy should be in sync with your practice’s current business results and forecasts, and should identify:2

  • The issues you will be involved in and the organizations you will work with
  • The form your philanthropy will take — cash donations? organized volunteering? promotional partnerships? pro bono services?
  • The long-term goal of the effort
  • How it fits into your practice’s core values
  • Sustainable donation targets — whether of time, services or money
  • Roles & responsibilities within your organization

As with all business initiatives, your philanthropic plans and targets can (and perhaps should) change as your practice climate changes. For example, a new practice may set a target limited to employee volunteer hours (possibly encouraged through incentive programs) and incorporate future cash donations as the practice grows.2

With a documented strategy based on sound business planning, your charitable efforts will not only help build your practice’s reputation in your community, but make your community a better place to live for all.

* Before engaging in efforts that involve providing medical care, ensure that you have adequate liability coverage. Many states have “charitable immunity laws” that offer some legal protections for physicians volunteering their services, but you should still contact your practice attorney, the organization you’re volunteering with or your practice’s medical professional liability insurance carrier to identify what coverage is available to you.

References

1. Ambassador Bruny, Mike. “How to Incorporate Charity into Your Business Model.” Forbes Young Entrepreneur Council. (accessed 7/24/2017)

2. Danigelis, Alyssa. “How to Incorporate Philanthropy into Your Business.” Inc.com. (accessed 7/24/2017)

3. Boitnott, John. “4 Ways Your Company Benefits From Giving Back.” Entrepreneur. 1/27/15. (accessed 7/26/2017)

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