Charitable giving is serious business for U.S. home builders. Every year, building firms contribute millions of dollars in cash, building materials, supplies, and countless volunteer hours to charities through local, national, and international community service organizations.
The recession put the brakes on philanthropy of all kinds, reducing Americans’ total giving by 7% in 2008, and another 6.2% in 2009 before slightly increasing in 2010, according to Stanford University. Nevertheless, most U.S. home building firms report they are back to—or exceeding—their pre-recession levels of charitable activity. Company executives and employees say it would take more than an economic downturn to stop them from fulfilling their charitable commitments, which are deeply ingrained in company culture.
Home builders’ associations across the country report that members are extremely active in local communities and beyond. Even in southern Nevada, the epicenter of the housing market crash, 99% of home builders are involved in charitable work, estimates Monica Caruso, director of public affairs at the Southern Nevada Home Builders Association.
Builders say that giving back is crucial to being part of the fabric of a neighborhood. “Being a builder of communities is our business and part of that is being a good corporate citizen in those communities,” says Kira Sterling, chief marketing officer of Horsham, Pa.–based Toll Brothers, which did not decrease its charitable outreach during the recession. “Part of what we’re selling is the community spirit of each one of our locations.”
The only downfall to the recharged economy is that in many busy markets, builders have to make sure not to spread themselves too thin on charitable programs.
“As the market is making a return, our challenge is that we can kind of get limited by our own bandwidth, how much we can actually take on,” notes Matt Riley, director of sales and marketing for the 50-employee Royal Oaks Homes. The Raleigh, N.C.–based builder has built six homes with veterans housing nonprofit Operation Coming Home since 2008.
MAKING SURE IT MATTERS
Builder donors are careful about which charities they select and keep a close eye on where and how funds will be used. Working with a well-established nonprofit can help make the process go smoothly. For example, St. Jude Children’s Research Hospital provides its Dream Home builders access to the organization’s local and regional representatives, sends them to an annual conference, and helps with public relations.
“They are a marketing and fundraising machine and are expert at getting the word out through media coverage,” says Valerie Rolfes, marketing director at Kansas City, Mo.–based Summit Custom Homes, which has built five Dream Homes—four at no cost—that have raised a total of $4.75 million.
Summit is involved with other charities as well. Many have been selected by its “Shark Tank” style meetings where nonprofits give 15-minute pitches to the firm’s Charitable Contributions Committee about why they should receive grant money. At the end of the year, representatives come back and explain how the funds were used.
“It’s very important to us that we understand where the money is going and for what specific need,” says Rolfes.
Toll makes sure that participating nonprofits are aligned with the values of the company and its employees. It has raised close to $6 million for groups including the American Cancer Society, Covenant House, and Red Cross, as well as local initiatives such as Hurricane Sandy relief and breast cancer research.
“We want to make sure that it’s a group that is relatively neutral politically and neutral from a religious point of view,” Sterling says. Toll’s human resources department uses the Charity Navigator website to research how much of the group’s total expenses are spent on the programs and services it delivers.
For example, Sterling says that 100% of the money Toll has raised for the American Cancer Society is directed toward research. “That’s an underlying principle for us.”