CFOs Say Efforts Can Help Attract Young Job Candidates
By Noelle Knox and Maxwell Murphy
Curran McCready worked sunup to sunset in a remote Nicaraguan village with no electricity for a week last summer to help build a school. He volunteered as a member ofGeneral Electric Co. GE -0.52% ‘s fast-track financial-management program. And despite the bugs—both flying and stomach—he said the experience was rewarding.
“It is a test,” said the 25-year-old, who is now a part of GE’s audit staff, that showed he was up for the challenge. “You’re sleeping in [villagers’] homes, doing manual labor.”
BuildOn Inc., a charity popular with GE’s finance team, has built 660 schools in some of the world’s most impoverished countries, and it is now a key recruiting tool for new employees.
“It has completely changed [GE employees’] perspective about our company,” said Jeff Bornstein, GE’s chief financial officer. GE donated about $215 million to charities last year.
CFOs are finding that giving away money, time and products to charitable causes is a good way to attract young talent. Charitable programs, they say, can help lure job candidates away from high-tech startups with potentially lucrative stock options, and other socially minded entrepreneurs. At the same time, millennial workers and social media are forcing companies to rethink how and what they donate.
In August, for example, the ALS Association, a nonprofit that raises awareness and funds research for amyotrophic lateral sclerosis, also known as Lou Gehrig’s disease, took in more than $94 million when the ALS “Ice-bucket challenge” went viral. That’s up from $2.7 million during the same period last year.
“The younger generation is self-organizing around things they care about…They are coming together not simply to go out and clean up a beach, which was much more the thing 20 to 25 years ago. They are coming together to study issues, like water use, energy and education, and they are thinking about what kind of active role they can take,” said Wendy Hawkins, executive director of the Intel Foundation, a $40 million charity she joined in 1990. Intel Corp. gave an additional $60 million to charitable causes last year.
The shift in millennial thinking accelerated during the financial crisis. Companies fired thousands of workers and did meager college recruiting, which pushed many graduates to become entrepreneurs. Though the economy has recovered, that trend hasn’t reversed, according to Fiona Murray, associate dean at Massachusetts Institute of Technology’s Innovation Initiative.
“It challenges employers. When they recruit they have to have a very different message for our students,” Ms. Murray said.
“We now see the world’s problems up close. There is a sense of impatience and a sense that we have a lot of tools at our disposal—not just software, but also hardware and access to funding through crowdfunding. They will build their own organization or work for an operation that is impacting the world.”
While the ways corporations give and engage with their communities are changing, their share of total donations has been stagnant at 5% for decades. Corporate giving over the past decade has averaged just under 1% of pretax profits. Last year, that totaled almost $18 billion, according to the Giving USA Foundation, whose research was conducted by Indiana University.
In addition, such generosity isn’t a factor for the majority of millennial workers, 63%, who said they didn’t consider a company’s good deeds in their search for their current job, according to the 2014 Millennial Impact Report, which was based on a survey of employees at more than 300 companies by Achieve, a research and consulting firm.
Of the 39% who discussed the company’s “cause work” in their interviews, 55% said the company’s involvement helped make up their mind to take the job.
In May, Ralph Lauren Corp. RL +0.35% published its first corporate-responsibility report and has since experienced a “significant pickup in recruiting of talent,” said CFO Chris Peterson. The premium-brand clothing maker and its foundation donated $25 million to charitable causes over the past four years.
While he acknowledges there is a marketing value to the company’s philanthropic initiatives, he said: “We have a younger employee population and there’s an emotional connection between the employee and the company. People want to work for companies that are socially responsible.”
Philanthropy is important to many nonmillennials too. Carolynne Borders, 43, said her desire to help underserved communities was “a big factor” in her decision almost two years ago to join Henry Schein Inc., HSIC +0.10% a health-care and dental products and services company, which donates $10 million a year in cash, products and services.
Ms. Borders, vice president of investor relations, said she interviewed with more than one Fortune 500 company, but she was swayed by Henry Schein’s commitment to social responsibility.
Last week, the company and its employees gave out school supplies and clothes to 5,000 children. The program has been in place for 17 years.”Writing out a check is not enough,” said CFO Steve Paladino. “It has to be about engagement.” He sponsored six children this year, spending about $900 to fulfill their clothing wish lists.
Small companies with little or no profits are seeing grass-roots philanthropy from young employees.
An idea for a ping-pong competition that started for bragging rights among startups in Austin, Texas, four years ago has turned into an annual fundraiser. The Austin Startup Games now pits rivals among 16 small companies in several activities, including foosball and Connect Four.
The games have raised upward of $105,000 for a variety of charities and looks to expand the event to other cities.
“Millennials want to make an effort, but don’t have the money to do that,” said Gillian Wilson, 36, senior manager of human resources for online shipping firm uShip Inc., who has helped run the games since their inception. She plans to leave uShip later this month to become the executive director of the games.
Write to Noelle Knox at [email protected] and Maxwell Murphy at[email protected]
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