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Rethinking the Way Your Company Should Respond to a Disaster

Guest Author Blog: In Times of Crisis, Companies Should Give More Than Money by Leslie R. Crutchfield, coauthor of "Do More Than Give: The Six Practices of Donors Who Change the World"

When a natural disaster strikes, its victims most urgently need aid. Many companies respond by making direct donations and matching employee gifts.

But in times of crisis, we advise companies to do more than give money.

Businesses are uniquely positioned to provide specific help that can accomplish more than if they simply sent funds. Our research on a leading corporations and foundations for "Do More Than Give: The Six Practices of Donors Who Change the World" shows that donors who deploy non- financial assets to solve problems can often make significant difference—in ways that go beyond conventional corporate social responsibility strategies or traditional grant giving programs.

Take the Thomson Reuters Foundation . When the earthquake struck in Haiti last year, killing more than 250,000 and injuring countless more, donors and governments worldwide sent collectively billions in aid and in-kind support. Lives were saved and suffering was eased through those gifts. Thomson Reuters Foundation went beyond donating and leveraged the company’s core competencies to catalyze change on the ground.

Guest Author Blog
Guest Author Blog

Within hours of the earthquake, it dispatched a team of journalists to Port-au-Prince to set up a first-of-its-kind Emergency Information Service(EIS) for the affected population, disseminating verified, actionable information by SMS message in Creole. While tens of thousands of Haitians desperately searched for medical care in the aftermath of the earthquake, one hospital only a mile away was fully equipped with medical staff and equipment but virtually empty of patients. EIS helped direct injured people straight to the hospital. It also provided much-needed information on how to contact search-and-rescue teams, where to receive food and water, and how to register missing loved ones. Thomson Reuters Foundation also runs the humanitarian news and information portal, AlertNet, deploying correspondents to cover dozens of crises around the world, providing fast, accurate and impartial information for aid professionals, journalists, donors and the public. And once the immediate crisis is over, the foundation provides lawyers for free to NGOs through Trustlaw who help enforce the rule of law and protect citizens struggling to reestablish their lives in the chaotic aftermath disasters when legal systems often break down.

"Another way that companies can catalyze change is to leverage their business know-how." -Co-Author, Do More Than Give, Leslie R. Crutchfield

The Thomson Reuters Foundation approach differs from conventional corporate responses. It deploys information as a form of aid and gives legal support to people in need, in addition to donating. It’s a leading example of what we call “catalytic philanthropy,” an approach that involves working across sectors—mobilizing NGOs, governments, businesses and individuals— to collectively to solve problems on the ground.

All types of companies are capable catalyzing change, and one of the most effective ways to do it is through advocacy. But advocacy is one tool that many businesses overlook. One company that bucks convention in this regard is PNC Financial Services Group . The fifth largest bank in the United States, PNC launched a $100 million program to improve early educational opportunities for low-income children, Grow Up Great. A major component of the strategy was to leverage its corporate lobbying power by training its regional presidents on how to advocate for better early childhood education policy reform at the state and local level. The early results have been impressive: Through the advocacy efforts of regional presidents in Pennsylvania and the personal drive of Rohr, PNC contributed to the passage of a $75 million line item to the Pennsylvania budget to improve school readiness programs for an additional 12,000 children.

CNBC - Disaster in Japan - Japan Earthquake and Tsunami
CNBC - Disaster in Japan - Japan Earthquake and Tsunami

PNC still donates money to high-impact early childhood service providers, and its employees participate in traditional volunteer activities, such as tutoring and mentoring at local schools and Head Start centers. But through its advocacy, PNC has moved beyond charity to catalyze systemic change.

Another way that companies can catalyze change is to leverage their business know-how.

Businesses understand better than most governments and nonprofit organizations how to build sustainable enterprises, and the giving impoverished people the tools to help bootstrap themselves into better lives is one of the best solutions a donor can offer. The Shell Foundation understands that the most valuable asset it can offer is its business sense.

Created in 2000 with a $250 million start-up gift by Royal Dutch Shell plc , Shell Foundation finances and assists entrepreneurs to launch and grow start-up businesses through programs like GroFin, a for-profit service provider to small and medium-sized enterprises (SMEs) mostly in sub-Saharan Africa. Since 2004, GroFin has financed loans to almost 200 businesses—98 percent of which are still operating—along with offering business development assistance to more than 1,200 entrepreneurs, while maintaining an overall default rate on its loans of less than 1 percent. Its success translates into significant socioeconomic benefits: nearly 5,000 sustainable jobs created and maintained and approximately 30,000 improved livelihoods.

It’s counterintuitive that a private foundation like Shell would put its philanthropic resources into for-profit concerns like Gro-Fin; most donors respond to problems like crippling poverty by giving aid. But catalytic donors understand that one of the most potent ways to assist low-income people in need is to help them help themselves.

Businesses that want to make the bigger difference in times of need should do more than give. They should determine their core competencies, and then find ways to deploy them to catalyze real change.

Leslie R. Crutchfield is coauthor of Do More Than Give: The Six Practices of Donors Who Change the World just published by Jossey-Bass/Wiley. She is a senior advisor at FSG Social Impact Consultants, a global social impact strategy firm.

Email me at bullishonbooks@cnbc.comAnd follow me on Twitter @BullishonBooks

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