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Sunday, 28 September 2014 22:00

Family-owned businesses play key role in West Michigan philanthropy

Written by  Jill HInton
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Local charities and nonprofits have a lot to be thankful for when it comes to the support they get from West Michigan’s family-owned businesses.

With many successful family-owned businesses in the region like Amway, Bissell, Gordon Food Service, Haworth, Irwin Seating, Lacks, and Meijer, West Michigan nonprofits have a large base from which to draw for support.

“Family-owned businesses have played a vital role in the success of nonprofits across the West Michigan region,” said Marilyn Zack, vice president of development at Grand Rapids Community Foundation. “Countless families have not only built their wealth in our community, but have also given back significant resources to help our community prosper.”

Zack said a large portion of Grand Rapids Community Foundation’s funds were established by family-owned business owners who believed in the power of philanthropy and wanted to invest their money in a way that would make significant, sustainable change in the community.

A recent survey conducted by the Haworth College of Business at Western Michigan University collected data on West Michigan’s family-owned businesses. The research was sponsored by Grand Valley State University’s Seidman College of Business, in partnership with the Family Business Alliance of Grand Rapids (FBA) and GVSU’s Family Owned Business Institute (FOBI).

The study, originally conducted in 2001 and then again in 2012, was released again this year and measured the impacts of family-owned businesses in the region, including the businesses’ philanthropic efforts. Of the 690 family businesses in FOBI’s database, 156 completed the survey for a 23 percent response rate. Family owned businesses can still take the survey, found at gvsu.edu/fobi/survey, and be included in a 2015 report.

The study found that 82 percent of the companies surveyed gave up to $100,000 in charitable giving annually, 6 percent gave between $100,001 and $500,000, while one family gave between $1 million and $10 million annually.

“We happen to be incredibly lucky because of all the philanthropy that is attached to the value system of the owners of our family businesses,” said Ellie Frey, director of the Family Business Alliance. “You walk through downtown, you can see the many, many examples of why our city is named one of the best places to visit or retire.”

West Michigan can largely credit its family-owned businesses for the gifts that helped improve the quality of life in the region and positioned it to be able to considered as a top destination, she said.

Carl Dufendach, a partner at Warner, Norcross & Judd LLP who specializes in working with family-owned businesses, said the impact of the local companies on the philanthropic community has been wide-ranging.

“There’s lots of different ways that family businesses are important, particularly in West Michigan,” Dufendach said. “They do a tremendous amount of giving, and a lot of it is even under the radar — not publicly known. They’ve had a tremendous impact through the years. Many charities would be in real dire straights if not for those gifts.”

These families are often looking for ways to give back to the people and communities who have, over the years, bought the companies’ products and services, loaned them capital and generally supported them, sometimes over several generations.

The average age of the companies that responded to the GVSU/WMU survey was 50 years.

Family owned businesses can give back to the community in a number of ways, everything from financially supporting local nonprofits, civic organizations, museums and other community-shared resources, to throwing their weight behind fundraisers such as the annual United Way drives.

Family businesses also lend their support by underwriting sporting and community wellness events like 5K races and festivals. They can even donate by providing time for their employees to serve on boards and work on projects like building Habitat for Humanity houses on company time.

According to the study, West Michigan family-owned companies vary in how they prefer to make philanthropic donations: 21 percent gave on an individual basis and 20 percent gave “as a business,” though most businesses (56 percent) used a combination of the two. Only a small percentage gave through a foundation.

Most companies in the survey had a formal giving plan in place, and the amount of yearly financial support was determined by three factors: most commonly, 41 percent, by a predetermined amount of money, while 40 percent gave a percentage of their net income and 19 percent used a combination of both strategies.

While it’s easiest just to write a check, many family-owned companies find they get more traction from their philanthropic efforts if there’s some strategy and thought behind the giving.

“We all gain when the community is successful. We all do better,” said Dufendach, whose own law firm donates to a variety of West Michigan causes. “We feel that kind of an obligation since we’re a significant business in the community. We feel that it’s important for us to give back.”

Read 3593 times Last modified on Sunday, 28 September 2014 21:03

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