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Mini-cast 111: ROI and EO Org Support

Supporting EO/ESOP organizations is often viewed as philanthropy. Bret Keisling explains why it is also excellent business development for EO practitioners.


Mini-cast 111 Transcript

Bret Keisling: 00:05 Welcome to the ESOP mini cast. Thank you so much for listening. My name is Bret Keisling and as it says on my business cards, I'm a passionate advocate for employee ownership. Earlier this week on Episode 128 of our primary EO/ESOP podcast, I was joined by Steve Storkan who is the executive director of the Employee Ownership Expansion network, better known as EOX.

Bret Keisling: 00:29 Steve did a great job sharing about the exciting growth EOX has seen with the opening of seven new state centers in 2020 and he also discussed the financial needs of EO organizations, particularly EOX. He made a point that I've heard a lot that differentiates support for EO organizations between philanthropy -- donating because it's the right thing to do -- and as a business advertising or marketing expense, I'm going to share my experiences. From the seven years I spent building a boutique ESOP trustee firm. We spend an awful lot of money that directly or indirectly supported employee ownership, and I almost always considered it an investment in my own company's growth and success rather than philanthropy but first let's listen to a brief clip from Steve Storkan from Episode 128.


Steve Storkan: 01:21 And it's the service providers and employee owned companies and selling shareholders who, yes, it is a return on investment. You do want to be at the table when someone's talking about employee ownership, but more than anything, it's giving back to a community that's given you probably a really good career over the years, your employees, you know, it's both philanthropy and maybe a little bit of return on investment.

Steve Storkan: 01:43 And so, trying to get that message across that this is not advertising dollars. This is not a return on your investment, a hundred percent. This is about giving back to a community.


Bret Keisling: 01:55 I understand the point that Steve is making. I also understand the challenging position that organizations like EOX are in when it comes to asking for, or receiving funds. Whether they're considered membership dues, meeting fees, or anything else, it's natural for someone to ask, what am I going to get back for my money? What's the return on investment?

Bret Keisling: 02:17 When my partner and I formed Capital Trustees in 2012, I had just come off two and a half years as CEO of an employee owned company. My partner, who was primarily in the financial services field had a few ESOP trustee clients that we used as kind of the building blocks for our practice.

Bret Keisling: 02:35 For the first couple of years, we went to maybe four to five conferences each and just tried to get our faces and our names out there, the same, anyone trying to build their practice does in addition to attending the conferences, we each began to speak at presentations, further enhancing our exposure.

Bret Keisling: 02:53 We then moved into sponsorship mode, where we'd sponsor individual conferences and for several years, we were also the gold sponsor of the New England chapter of The ESOP Association. In 2016, we were approached by some ESOP professionals that we worked with who asked us to consider becoming co-founders of the Pennsylvania Center for Employee Ownership [PaCEO]. At that point, we made a three-year commitment of about 10,000 a year. By the time I sold my share in Capital Trustees in the summer of 2019, we had built a nationally recognized and financially successful trustee firm.

Bret Keisling: 03:25 Was paying to attend conferences philanthropy? Of course not. We had to be present to build our visibility. Also, the only way to speak at conferences is to be an attendee.

Bret Keisling: 03:37 Was it philanthropy for us to present? Of course not. It build our presence and hopefully our reputation and expertise.

Bret Keisling: 03:44 One could make the argument, I suppose, to being a conference sponsor for one of the major organizations is philanthropy, you don't need to sponsor and get a table to be at the conference. But again, being a sponsor, being in the program books and having a table where people can come see you is solid marketing. It's not philanthropy.

Bret Keisling: 04:06 As to our initial investment in PaCEO, to be perfectly candid I don't know that anyone called my partner or me in its initial three years and said specifically, they want to hire us because of our work with PaCEO. Does that mean our three-year commitment was philanthropy? No, it doesn't. When PaCEO was formed, it was very important to us as a trustee firm based in Harrisburg, Pennsylvania's state capital, that we be strong supporters of the new organization. Yes, it was the right thing to do. I suppose, that is philanthropic in nature. But more importantly, if there was going to be an organization in our home state, we were going to make sure to position ourselves as the home trustees who were active.

Bret Keisling: 04:51 Now, I just said, I wasn't aware of anybody who called my partner or me to hire us specifically because of our connection to PaCEO, but here's something that's also very true. Every time we were asked to submit RFPs or biographical data on the firm, the fact that we were co-founders was always included, along with all of our other biographical information. So with an investment that was pretty healthy for two partners, we used our commitment to solidify our own credentials and provide a more national appearance than we might otherwise have had.

Bret Keisling: 05:22 Look at it this way, a potential client from Indiana for example, is looking at trustees. They see a Pennsylvania firm and they think maybe they want someone more local. It happens all the time. But then they see not only are we active and co-founders in PaCEO, but we're gold sponsors of the New England conference of The ESOP Association, and we were sponsors of the Great Lake conference, and we were sponsors NCEO's national conferences, et cetera, et cetera.

Bret Keisling: 05:51 It always brings me back to John Wanamaker, the founder of the department store chain. He famously said in the late 1800s that he knew half of his marketing budget was wasted, he just didn't know which half. My marketing budget had consisted primarily during all seven years with dollars that were sent to EO organizations. There may have been some philanthropy involved and for that, I feel good, but it's a smart way to grow your practice and that's the return on investment that we're talking about. Invest in our ESOP and the organizations, and have a lucrative practice in return.

Bret Keisling: 06:28 On the other hand, if you just want to write a big check to any EO organization and not expect anything in return, you have my blessing and my gratitude!

Bret Keisling: 06:39 Hey folks, we're going through an awful lot in this country together right now, and in the best spirit of employee ownership, that's how we're going to get through it, together. Thank you so much for listening. This is Bret. Keisling, have a great day.

Bitsy McCann: 06:57 We'd love to hear from you! To contact us, find us on Facebook at KEISOP, LLC and on Twitter @ESOPPodcast. To reach Bret, with one "T", email, on LinkedIn at Bret Keisling, and most actively on Twitter at @EO_Bret. Again, that's one "T". This podcast has been produced by The KEISOP Group, technical assistance provided by Third Circle, Inc. and BitsyPlus Design. Original music composed by Max Keisling, archival podcast material edited and produced by Brian Keisling, and I'm Bitsy McCann.

Standard Disclaimer: The views expressed herein are my own and don't represent those of my own firms or the organizations to which I belong. Nothing in the podcast should be construed as guidance or advice of any kind in any field and the fact that I mentioned an organizational website or an advocate or a company on a podcast does not reflect an endorsement, but if you've heard your name or your group's name mentioned on this podcast, I'd love to have you come on and talk about it yourself.

A note on the transcript: This transcript was produced by Temi, an automated transcription service. While it has been reviewed by The ESOP Podcast, we can not guarantee the accuracy of the transcription. Please refer to the original audio when citing sources.


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