A commitment to community

By Margaret Steen

The evolution of community engagement in family business in unique in the business world

Family businesses have long been known for their unfaltering commitment to the communities they call home. Family company logos can be found on Little League uniforms, and hospital wings are named after the family business owners who contributed the funds to build them.

“They’ve been there for generations,” says Daniel Van Der Vliet, John and Dyan Smith Executive Director of Family Business at the Smith Family Business Initiative at Cornell University. “They’re not likely to leave. Often their presence is felt throughout the community.”

This commitment to community is often a reflection of the values of the founders — who in many cases were people of modest means. Successful family businesses make later generations better off financially than their parents, which creates a new challenge: how to preserve the values of the founders.

“Even families that are many, many generations past the humble beginnings still know the humble beginnings,” says Debbie Bing, president and principal of CFAR, a management consulting company focused on working with family enterprises. “It’s part of the legacy to have come up from that place. People feel that in their history, in their identity.”

“The families that get it right find ways to institutionalize these values and beliefs across generations,” says Justin B. Craig, program director for the John L. Ward Center for Family Enterprises at Kellogg School of Management at Northwestern University. “One of the ways is to understand that they have a commitment to society, to a social good, as well as an economic logic. They are brought up with an awareness that with this wealth comes responsibility.”

IDEAL Industries reflects its founder’s philosophy in its current community engagement. Nicole Juday Rhoads’ great-grandfather, who founded the company in 1917, lived by an axiom that informs the company’s current community work: “Live and let live and help live,” says Juday Rhoads, who is executive director and board chair of the IDEAL Industries Foundation. Today, the company’s board, which guides her work with the corporate foundation, takes its cues on values and culture from the family. “The family’s values inform how I approach the work of the foundation, and the family culture is super influential in my work.”

But family values are not the only ingredient in a successful community engagement strategy. All philanthropic funders ask themselves whether a particular project will solve an important problem, Juday Rhoads says. Corporate foundations ask additional questions: “Does it align with the company’s values, help the business and fit with the long-term strategy of where this company wants to go?”

“Corporate philanthropy is not just self-dealing – it’s finding the rising tide that lifts all boats,” Juday Rhoads says.

A company’s community engagement strategy should fit with the business goals – but it does not necessarily have to generate short-term financial returns.

“It’s really a long-term play,” says Jennifer Pendergast, executive director of the John L. Ward Center for Family Enterprises at the Kellogg School. Businesses want to reinforce their reputation and make employees proud to work there — and family-owned businesses are not beholden to quarterly earnings statements. “It’s the faith that doing the right thing and being a good steward will come back as a benefit.”

Instead, family businesses often focus their philanthropy on legacy and continuity, Craig says: “’We work for our kids, and we work for our kids’ kids.’”

Although most community engagement efforts involve donations of time, products or money, companies also demonstrate their commitment to community by their long-term investment in a given location: sticking with the community through economic ups and downs, and being a good employer. Having the family’s name on the business makes the commitment more visible and personal, though there are companies whose family owners prefer to handle their companies’ donations anonymously. “The notion of privacy in family business is very real,” Van Der Vliet says.

 

Home territory: a starting point for engagement

The geographic area where the company was founded is an obvious place to for community engagement to begin.

“Often, if it’s a business that’s had multiple generations, there is a history of building something there that creates a point of connection, a touchpoint,” Bing says. Family businesses are an important source of employment for local residents. Even if the business becomes a multinational company, there often remains a connection to the place where it started. “The business becomes a place where many generations of community families might work over time.”

Many family businesses are located in smaller markets, where they may be a major employer, Pendergast says. It’s important to the success of the business for the surrounding city to be a place employees want to live — which means that investing in the community can produce long-term benefits for the company.

When family and business expand

Successful family businesses usually grow – often expanding their operations beyond the initial town or city. Families get larger, as well, with family members moving away from the first generation’s home base. This can complicate the definition of community.

“As families and businesses evolve, it’s no longer just about the local community,” Bing says. “Lots of families wrestle with that tension – is the place-based community still the source of glue and meaningful enough connection for a family that has grown and expanded well beyond it?”

Some companies continue to focus their giving and engagement in the community where they started. Others take their philosophy of community engagement and apply it to new communities as they expand. Warroad, Minn.-based Marvin, a window and door manufacturing company, is one example.

“Marvin believes it is essential to support and give back to the communities in which we do business,” says Christine Marvin, chief marketing and experience officer and member of the board of directors at Marvin. She is a fourth-generation Marvin family member. “With manufacturing and office locations across the country, we have opportunities to support communities from Baker, Ore., to Delray Beach, Fla., to our headquarters community in Warroad, Minn., and beyond.”

“It’s interesting to think about community as a value and a mindset, not just a defined set of people around you and the town and your family,” Bing says. “That has been an evolution as family enterprises grow – ‘community’ means something very concrete and practical at the beginning, and it often scales as the family scales.”

The push to broaden the definition of community for some families comes at a time when communications and transportation are easier than in the past.

“The world has become so much less bounded by traditional geographic definitions,” Bing says.

Companies searching for a broader definition of community may look at several areas, Van Der Vliet says. Some may focus their hiring on groups who struggle with employment, such as veterans or people with disabilities. Some view their environmental initiatives as part of a commitment to the global community.

And many companies turn their focus to helping their industry, using different models for balancing their commitments to their geographic and industry-specific communities.

Balancing two communities: geography and industry

IDEAL Industries: Serving industry and the local area on separate tracks

The IDEAL Industries Foundation defines community in two different ways, Juday Rhoads says. One is geographical: the primary physical community where the company does business. Although the company has multiple locations in the United States and internationally, the foundation decided to define the local community as the county where the business started. “That’s really important because that’s where people feel connected. It’s where the company can have a presence and can have a real footprint in a geographical location,” Juday Rhoads says.

The company has a longstanding tradition of supporting nonprofits in DeKalb County, Ill., where it is headquartered. “The company is 105 years old – it’s very, very much a part of the community,” Juday Rhoads says.

When Juday Rhoads began her role with the foundation in early 2022, the foundation’s role became part of a larger conversation about ESG principles and social responsibility.

“It really became apparent that this foundation was an asset that could be utilized to align a lot better with the mission of the company,” Juday Rhoads says. The foundation decided to change its approach to philanthropy. “We adopted a much more trust-based model. We’re working with organizations that have been in the community for decades. We really don’t need to ask them to submit an application or come up with a project.”

The foundation chose eight organizations with whom it could build long-term partnerships. It will give these groups predictable financial support each year. The fouldation also want to make it easy for employees to volunteer with these groups.

Most of the organizations are in social services: The YMCA, for example, is the largest provider of affordable daycare in the county. “That’s something that really makes it a lot easier for people to go to work,” Juday Rhoads says. The others are social safety net organizations. “If you don’t have those in place in terms of food security, emergency housing, and youth programs, it just is hard to have a truly vibrant community that’s taking care of all its members.”

IDEAL also looks at community through another lens: the manufacturing industry. IDEAL supplies products and materials used in electrical services and electrical distribution.

“In a larger sense, our community is the people that do this work: the customers of IDEAL, the people who are in the electrical trades and their families,” Juday Rhoads says.

The foundation is exploring ways to increase and diversify participation in the electrical trades. “Yes, it will help IDEAL Industries, but it should help even our competitors,” Juday Rhoads says. “If this industry becomes more reflective of the cultures that make up our country, it’s good for IDEAL, it’s good for our competitors and it’s good for the people going into the trades.”

Bush Brothers Provision Company: Using industry expertise to help the community

Bush Brothers Provision Company, a 97-year-old meat packing company in West Palm Beach, Fla., with almost 60 employees, has occupied the same building for its entire history (Bush Brothers Provision Company is not connected to the much larger Bush Brothers & Co., which is headquartered in Tennessee). Although the company is rooted in the community, it is a relatively small player in the local economy. Its community focus is not on being the largest employer, for example, but on using its food industry expertise to help local nonprofits.

“That’s our business, that’s our space,” says Doug Bush, vice president of Bush Brothers Provision Company and a fifth-generation family member. They give some financial support to nonprofits, but their main donations are of their products. They donate food to food pantries and soup kitchens, as well as to nonprofit fundraising dinners.

“We can provide more value to a charity by donating product to them than we can by trying to make financial contributions,” Bush says. “It’s a multiplier.”

In addition, donating food is difficult, and they have the expertise and equipment to do it. “It’s perishable. It’s got to be delivered at the right place at the right time,” Bush says.

Bush Brothers Provision Company supports the local Meals on Wheels chapter, facilitating deliveries for their fundraisers that support their daily deliveries. “Our employees really get engaged in stuff like that,” Bush says.

The engagement is the continuation of a longstanding tradition.

“I think every generation of our family in this business has been engaged with this kind of support for the community,” Bush says. “The particular organizations we’re involved with now aren’t necessarily the same organizations that my father or grandfather were involved with. But we have always had a strong relationship with food-related charities in the area, going back many generations.”

The company is also involved in the culinary arts program at a local high school. This sharing of expertise benefits the broader industry, helping keep restaurants and hotels well stocked with well-trained cooks and chefs, as well as the company.

“If they learn about meat from our people teaching a class at culinary school, they may be a customer down the road,” Bush says.

Ensign-Bickford Industries: Evolving away from a primary focus on a single community

When Ensign-Bickford Industries was founded in 1836, it made explosives for the mining industry around in Simsbury, Conn. The company and the family supported that community, funding the first fire department for the city, for example, and donating land for the first synagogue, Catholic church and Methodist church. Until the early 2000s, the majority of the company’s charitable giving remained focused on the area around its headquarters.

The business has evolved over the years, though, and its community engagement strategy has evolved with it. It began to serve the aerospace and defense industries and later added businesses in the pet food and agriculture sectors. 

The company’s definition of community began to shift in the early 2000s. “It became more focused and more mission-driven,” says Caleb White, a sixth-generation family member, board member and former CEO, who is also a principal at CFAR. Ensign-Bickford started making contributions in different cities where they had operations, focusing those donations on areas related to the businesses: computers for the local library, STEM programs in schools, a zoo sponsorship.

This new philosophy continued when, three years ago, the company moved its headquarters to Denver to be closer to its customers and key suppliers. By that time, the headquarters had only a few dozen employees, so not many jobs moved – and the company still has a large presence in Connecticut.

“Now most of our community efforts are following the passions of our employees or the interests of our customers, and making it local to where we do business,” White says.

Marvin: Nurturing local talent

“Marvin defines community as the places where we live, work and play – and that includes all 16 of our manufacturing, retail, distribution and office locations,” Marvin says. “In addition, we collaborate with our dealer and distribution partners across the country to make an impact where it can do the most good.”

For example, Marvin is a close partner of the United Way of Cass-Clay, serving the area around Fargo, N.D. In the area around Warroad, Minn., Marvin has collaborated with local educators to establish and sponsor mechatronics, robotics and related STEM education initiatives.

Marvin also supports innovation and education programs for the manufacturing industry. In partnership with Northland Community and Technical College, Marvin has helped to develop a flexible advanced manufacturing program to the Warroad area, where the company’s corporate headquarters has been for more than 110 years.

“When Marvin establishes a presence in a community, we intend to be there for the long term,” Marvin says. “We believe we have a responsibility to identify – and sometimes, create – opportunities to nurture local talent and support the next generation of manufacturing employees.”

 

Margaret Steen is a freelance writer and frequent contributor to Family Business magazine.

 

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