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Good Corporate Citizens

Jan. 1, 2006
Many electrical distributors and manufacturers give back to the community with donations of time, dollars and products. What’s the pay off?

Few electrical distributors take their good-citizenship strategy to the level of Minnesota Electric Supply. Sure, many spearhead food drives and promote a myriad of moneymaking festivities to benefit charities and not-for-profits, but few have implemented a formal community service policy. Undoubtedly, even fewer tie part of their employees' performance reviews to volunteering in the community.

As part of the goals and objectives Minnesota Electric's employees must meet for their quarterly and annual performance incentive reviews, employees can chose between volunteering in the community or continuing education. “We try to encourage them to go to a vocational school or take a college course … or they can elect to do charitable work and be involved in a service organization,” said Steve Peterson, Minnesota Electric's president and chief executive officer.

With headquarters in Willmar, Minn., and seven additional branches scattered throughout the state, Minnesota Electric caters primarily to small electrical contractors. In 1996, Minnesota Electric instituted its community service policy. The employee handbook spells it out: “We encourage all employees to participate in pre-approved community service activities. Please arrange for time off with your supervisor or manager.” Time off, if during the workday, is paid.

“We think it's the right thing to do,” said Peterson. “We believe in family. We believe in the communities. We believe in our people participating.”

Minnesota Electric's employees belong to a long list of community organizations. As members of the Rotary Club, Sertoma Club, Chamber of Commerce and Knights of Columbus, they are consistently giving back to their communities. Minnesota Electric currently has 13 employees who are volunteer firefighters for their local volunteer fire departments, which are critical to the safety and welfare of rural America. It's not uncommon for those volunteer firefighters to leave work at a moment's notice when there's a fire call, and they take paid time off work for training.

Other employees mentor high-school students or deliver meals as volunteers for Meals on Wheels to people needing help due to age, disability or illness.

“We encourage our people to be involved one way or another,” said Peterson. “People really start to have fun with it.”

In addition to the volunteer hours logged independently by Minnesota Electric's employees, the wholesaler sponsors company-wide events benefiting charities and makes donations of products or money to organizations in need. Like many other electrical distributors, Minnesota Electric donated to relief efforts for Hurricanes Katrina and Rita earlier this year with a contribution to the American Red Cross.

“If there has been a focus, though, it's been trying to be involved and give to those charitable groups that affect our employees personally and probably our communities a little more,” said Peterson. “Cancer's been a big one because it affects just about every family, and we've had some employees pass away in the last few years from cancer. Heart disease is another big issue that affects most families.”

In December, the distributor raised more than $4,800 for the American Heart Association by auctioning promotional items leftover from the year's marketing activities via the company's Intranet. The auction was done similar to eBay with employees using secret code names and placing bids on their computers.

The American Cancer Society's Relay for Life is another event with big Minnesota Electric participation. “We're a small company with 130 people, and I think we probably had 40 people get involved in that,” said Peterson. For the overnight event, members of relay teams take turns walking or running laps from sunset to sunrise. Teams get sponsors and collect money.

In support of the fire departments where employees volunteer, Minnesota Electric donated new inflatable rafts last fall. As the Land of 10,000 Lakes, in Minnesota those rafts are sure to save some lives. In case some child or fisherman breaks through the ice, a rescue worker can use the inflatable raft to quickly skim across the ice to get the victim.

Although Minnesota Electric made a formal commitment to community service nearly a decade ago by implementing policy, the electrical distributor isn't alone when it comes to philanthropic endeavors.

Platt Electric, Beaverton, Ore., is well known for its 17-year commitment to raising funds for the Cystic Fibrosis Foundation. In 2005, Platt broke its previous annual records in participation and dollars raised with fund-raising efforts topping $320,000. Since 1989, the distributor has raised more than $3.5 million for the foundation.

In response to disasters like 9-11, the 2004 Tsunami and, most recently, Hurricanes Katrina and Rita, it's commonplace for electrical distributors to makes donations of products and money to aid in relief efforts. As a whole, electrical distributors are a pretty benevolent bunch. Like Minnesota Electric, they're often independent distributors with strong community ties and a commitment to doing the right thing.

As a bonus for doing the right thing, a company's good citizenship positively impacts profits, according to a 2003 survey conducted by The Center for Corporate Citizenship at Boston College. Among the national sample of executives from small, medium and large companies, 82 percent said corporate good citizenship helps the bottom line.

Still, the question remains unanswered when it comes to how much a company's philanthropic activities and employee volunteerism might affect profit and general perceptions of a company.

“It's very, very difficult to put a dollar figure on what kind of return you may be getting,” said Minnesota Electric's Peterson.

Nonetheless, other benefits to good corporate citizenship include building employee pride, creating a positive work environment, improving employee retention and building brand awareness, according to a 2004 study, “Measuring Corporate Volunteerism,” performed by LBG Associates, Stamford, Conn.

Beth Dombrowa, director of corporate communications, Cooper Industries, Houston, says supporting the organizations that Cooper Industries' employees and customers support builds goodwill all around.

For employees, Cooper's matching gift program matches 100 percent up to $2,500 annually for contributions an employee makes to charitable organizations of his or her choice.

“A lot of our customers will either be involved in various charities or have foundations of their own,” said Dombrowa. Cooper Industries commits $50,000 annually to the National Association of Electrical Distributors (NAED) educational fund. “We support NAED's scholarship program, which in turn supports the children and the future generations of our customers,” said Dombrowa

The various divisions of Cooper also frequently partner with individual distributors. Cooper Wiring Devices, along with other electrical manufacturers, partnered with Lite House Electric Supply to donate products to rebuild a home featured last fall on ABC's “Extreme Makeover: Home Edition.”

With more than 45,000 square feet of warehouse space, Lite House Electric Supply serves the Washington, D.C., metro area from its single location in Camp Springs, Md. George Aman, president and chief executive officer for Lite House, said the builder, Somerset Homes, contacted Lite House about donating products for the “Extreme” home.

“They gave us the blueprints, and we went through them and determined fixture by fixture what they would need,” said Aman. Lite House employees also volunteered time working on the reconstruction of the fast-track home rebuild.

Lite House Electric Supply often gets requests from churches, schools and other charitable organizations for donations of money or products, said Aman. As part of the distributor's annual budget process in November, Aman says Lite House includes charitable donations to organizations that have made requests during the year.

“We want to donate in a balanced way,” said Aman. “It would be easy to just say, ‘OK, let's give everything to the Red Cross or everything to the Salvation Army, but we really want to cover as many bases as we can and be meaningful.

“We do it because — this may sound corny — but we want to be a good member of the community. We honestly believe in doing things the right way … and what goes around comes around.”

Pondering Corporate Citizenship

The Center for Corporate Citizenship at Boston College and The Center for Corporate Citizenship at the U.S. Chamber of Commerce teamed up for a survey of American businesses of all sizes on “The State of Corporate Citizenship in the U.S.” Here are highlights from the survey results, which were released in 2003.

  • 82 percent of executives say good corporate citizenship helps the bottom line.

  • 74 percent believe the public has a right to expect companies to act as good citizens.

  • More than half of the companies surveyed employ corporate citizenship as part of their business strategy.

  • 75 percent said corporate citizenship is part of their companies' traditions and values.

  • Nearly one third of survey respondents tie their efforts closely to their businesses by providing in-kind donations of products and services as a part of their philanthropic efforts.

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