Charity: When Big Is Better

Small business is on a roll in America. In almost every way you can measure -- sales, employment, profitability -- the small-business sector is challenging the big boys.

One area in which that isn't true is charity, specifically in the area of employee contributions.

Statistics complied by United Way of America, the nation's community chest, show that employees of small business haven't even begun to contribute their fair share (see figure). Small companies are less likely to launch United Way campaigns. And even when they do, they have lower rates of participation and smaller contributions than big corporations.

To be fair about it, there are some good reasons for all this. Big businesses tend to pay bigger salaries, so it should be no surprise that their employees are more generous. Big business also has a long history with the United Way. In the early days of computerized payrolls, it was only big business that could arrange to deduct monthly contributions from large numbers of paychecks. And it has been only big business that can afford to assign a jurior vice-president to put the arm on everybody else. It is not surprising that big-business executives still make up most United Way boards of directors.

"We haven't gone into small businesses because it hasn't been as cost-effective as going after a bigger company," concedes Stephen Delfin, vice-president of United Way. "Now, it is becoming clear that the workplace is changing dramatically." And organizations like the United Way are rushing to change with it.

According to United Way officials, the small-business owner needs much more educating, and more stroking, before agreeing to launch an employee campaign. The corporate president, it seems, realizes that participation in the United Way makes sense for the company in terms of its image within the community, and can have a real impact on the level of services provided. The entrepreneur doesn't see direct results from the company's participation, either for the company or the community.

"We can show a small business how its involvement helps make for a healthy, vibrant community," says James Colville, executive director of United Way of the Minneapolis Area. "Now if we could only show them that the reverse is true -- that a healthy community helps their business -- then we would have a match. We haven't figured out how to do that yet."

United Way has launched special small-business campaigns in many small cities, with dramatically differing results. In Fort Worth, for example, a pilot program was largely unsuccessful. United Way there found small-business owners unwilling to involve employees in solicitation drives or suggest a particular level of giving to employees -- two important elements in most big-business campaigns. But out on New York's Long Island, the Hauppauge Industrial Association, working with the local United Way, found that it could generate average donations of $80 or more per employee -- even better than many of Long Island's bigger businesses. Among their secrets: the initial solicitations are done by small-business owners soliciting other small-business owners.

"We now go to great lengths to research business owners -- who they play golf with, go to church with, stuff like that," explains James G. Williamson, of the Berkshire United Way, in Pittsfield, Mass., which has also had success in tapping small-business employees. "It's really a question of the right person making the right call. People give to people, not causes."

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