President's Letter

Not long ago I spoke to a group of Hudson Valley business leaders about the role of corporate philanthropy during the current economic downturn. Opinions may vary on how quickly we are recovering from the economic crisis that began in 2008, but I believe that corporations and businesses can and should continue to support their communities through charitable giving and those investments will boost their bottom lines many times over.

A recent report, Shaping the Future: Solving Social Problems Through Business Strategy, from the business consulting group McKinsey & Company, states that companies who survive economic hard times will be the ones who find ways to engage in solving social and environmental problems. Traditional philanthropy is not enough, it says. Corporations need to find opportunities to use their business skills to advance social causes. The Chronicle of Philanthropy quotes from a McKinsey director who says that "If you do that well, it is also good for business."

Whether it's viewed as enlightened self-interest or just the right thing for a company to do, corporate philanthropy simply makes sense. And there has never been a more critical time for companies to innovate while making charitable contributions in the communities in which they operate.

As I have written in this space before, as a business person myself, I believe that nonprofit organizations are among the most important resources that we have in our communities. They do the critical work of feeding the hungry, taking care of the sick, and housing the homeless. From recreational facilities to senior citizens' centers, to mental health services and after-school programs...if nonprofits can't perform their vital functions, then the community suffers. Whole communities become less attractive places to work and live. If it were not for nonprofits, the government would be even more overburdened than it is now. And so many functions of the nonprofit sector are not the province of government anyhow.

No doubt about it, we are all suffering during the current economic recession. But the nonprofit sector has been hit harder than most. A June 2010 report from Guidestar, a leading nonprofit resource, found that 40% of all nonprofit organizations are experiencing reduced contributions so far this year, while at the same time an even greater number (63%) are seeing increased demand for services. And it is many of the same organizations that serve those most affected by the economy that are suffering the most; the report found that mental health, crisis intervention, and housing organizations are seeing the greatest decreases in financial support and increased need for their services.

The same report found that 8% of all nonprofits surveyed felt that their organizations were in imminent danger of closing because of the economy. In our own region here in the Hudson Valley, we have seen youth and community centers shuttered, senior citizens programs closed, victim services agencies dissolved – just during the last 18 months. Some of the area's hospital emergency rooms report that visits are up 10% - largely because so many people are putting off preventive care because of cost, or because they can't afford to see their private doctors.

Local health and social services departments have cut back dramatically on funding services in their counties. Their budgets are stressed to the seams because of the many mandated services they are funding – but these are the very safety net services that many of our neighbors have turned to after being laid off or losing their health insurance. In 2009, one local county saw an increase in Medicaid caseloads of 13% and a 19% increase in requests for food stamps.

But in the Hudson Valley and beyond, I also see forward-thinking companies recognizing that focused, intelligent, LOCAL giving can have a profound impact upon the communities in which they do business. Remember, you don't have to be a member of Bill Gates' and Warren Buffet's Giving Pledge group to have an impact.

Our region is full of examples of corporate philanthropy undiminished by the current financial downturn. For instance, the Stewarts Corporation, which operates hundreds of convenience stores throughout eastern New York State, has boldly dedicated 5% of its profits to charities located in its operating territory, including most of the Hudson Valley. In 2010, Stewarts plans to donate $2.25 million to local charities through a combination of direct monetary contributions, donations of products in support of events, and matching contributions through its "Holiday Match Program," in which customers' donations to various local causes are matched dollar-for-dollar by the corporation.

The Ulster Savings Bank Charitable Foundation is another in a long list of corporate supporters of nonprofit initiatives in our region. In addition to donating to a range of charitable causes—such as a recent $30,000 donation to The Children's Annex in Kingston—in its operating territory, the bank's foundation offers Learning Initiatives for Educators (LIFE) grants, a focused program designed to encourage teachers to gain new training and expertise in their areas of concentration. This is especially important when schools are cutting back on training and development.

Another regional bank, Rhinebeck Savings Bank, is celebrating its 150th anniversary this year by offering a "Random Acts of Kindness" campaign. In April, the bank's representatives pleasantly surprised Dutchess Outreach board members when they delivered 150 $20 Stop & Shop gift certificates to be given out to Dutchess Outreach's Food Pantry clients. It was "a little something extra" for needy families and it demonstrates how small, personal donations can have a big impact.

Creative businesses, no matter how small or how large, can find ways of giving back to their communities. A great local restaurant in Pawling, McKinney & Doyle Fine Foods, sponsors regular "Stimulus Sandwich" contests in which customers get to create a new sandwich to be featured on the restaurant's menu, and all proceeds are donated to a local charity.

A Poughkeepsie-based law firm, McCabe & Mack LLP, has established another kind of giving tradition. They opened a donor-advised fund with the Community Foundation of Dutchess County, and the staff of McCabe & Mack, instead of giving each other holiday gifts, contribute to the fund and then decide as a group which charities to support.

There are too many examples to list here, but the concept is clear. Business leaders are increasingly recognizing their responsibility to be good stewards within the communities in which they operate. More and more they are engaging customers and residents in helping to direct their philanthropy, creating a bond between client and company that might not have been there before. And business leaders are recognizing the opportunity associated with intelligent giving, that focused philanthropy can make the communities in which they do business stronger and more resilient in the long run.

I hope that more companies see the wisdom of investing in their communities' nonprofit work. It will only accrue to their benefit in the long run.

Robert R. Dyson