The Case for Generosity

The Case for Generosity

Examining the Returns that Philanthropy Produces
By Nick Dmitrovich

It’s all about that feeling. When we do something nice for someone else, it makes us feel good. But can that feeling be amplified to say, the level of an entire company? And will those feelings produce a discernable impact on that company’s operations? It turns out, yes, it very well can. There’s a very powerful link between the frequency with which a company or its employees give and the business outcomes that are produced as a result, and it all comes down to that feeling.

Human psychology plays an important role here, as is the case with so many other aspects of our daily lives. Researchers at Rush University Medical Center used MRI scans on the brains of donors to discover that the mesolimbic system, or the part of the brain that’s responsible for feelings of reward and pleasure, becomes active after acts of generosity. Furthermore, researchers noted that generosity also has the added benefits of improving a person’s self-esteem and satisfaction with life, lowering the risks of depression, and generally improving overall physical health. All of which then translate into the types of individual attributes that would be great for any company.

The impact of generosity can be measured across different types of philanthropy, specifically with regard to whether the act was conducted by the company itself or through employee-led efforts. Both of which have been noted to boost productivity due to increased employee engagement.

For example, Network for Good, a nonprofit fundraising platform for charities, published a study which found that more than 75 percent of employees want to be involved in their company’s giving and volunteering programs, and “Employee engagement through cause is a vital means by which to strengthen employee relationships, enhance employee morale and even build critical skill sets and expertise.”

Network for Good also cited a Volunteer IMPACT Survey from Deloitte, a tax advisory firm, which found that employed adults who frequently participate in workplace volunteer activities are nearly twice as likely to be very satisfied with the progression of their career.

A company’s level of generosity can actually be a predictive indicator when attempting to map out the future potential profitability of a given entity.

In business, it’s been well-established for years that increased employee engagement and morale correlates directly to a company’s success or failure. But it’s interesting to note that recent research suggests a company’s level of generosity can actually be a predictive indicator when attempting to map out the future potential profitability of a given entity.

“Higher rates of giving are predictive of higher unit profitability, productivity, efficiency, and customer satisfaction, along with lower costs and turnover rates. When employees act like givers, they facilitate efficient problem solving and coordination and build cohesive, supportive cultures that appeal to customers, suppliers, and top talent alike,” wrote Adam Grant of the Harvard Business Review, citing research conducted at the University of Arizona.

Expounding on that idea, the researchers in that study noted that generous employees are a much better investment for a company over most other personality types, primarily due to workplace relationships involving collaborative efforts. Researchers found that, typically, generous employees produce around 50 percent more in annual revenue on average over their not-so-generous counterparts. Generous employees are more willing to help others and are “ideal collaborators” who can serve toward the betterment of the entire organization over their own personal needs. There’s also research which suggests teams that participate in acts of giving or volunteering tend to have less friction and interpersonal problems, further boosting efficiency and productivity.

Let’s recap all the facts and benefits we’ve gathered thus far:

  • Science has proven a correlation between generous actions, feelings of happiness, and overall health, and it’s well-known that happy and healthy employees are great for companies.
  • The majority of employees want to be involved in their company’s volunteering or giving programs and would participate if given the opportunity.
  • Greater involvement leads to greater engagement and has a direct impact on job satisfaction, teamwork, and employee productivity.
  • And lastly, generosity is such an effective boost for companies that it can actually be used as a predictive indicator of a company’s future success.

The next time your board of directors is looking to infuse your company with a little added boost, consider all there is to gain by giving back. Taking the time to implement a corporate giving program, or programs, is definitely a worthwhile investment in terms of the tremendous returns that can be generated among your personnel and beyond.

Did you Know?

Generous employees produce around 50% more in annual revenue on average over their not-so-generous counterparts.

Sources: Harvard Business Review, University of Arizona