The world of corporate philanthropy is changing rapidly, and it will continue to evolve as society demands progress and accountability. By aligning your corporate giving programs more closely with your business goals, you have an opportunity to make a real difference in the community while supporting your company’s bottom line.
Taking a step back to explore new possibilities can help your company release new resources and ideas to greatly enhance your company’s positive impact on society. At the same time, this alignment may create new value for your company and increase its competitive advantage, especially in unexpected areas such as employee recruitment.
The Big Picture for Corporate Social Responsibility
The broader scope of corporate social responsibility (CSR) means that corporations adhere to ethical and legal standards across all their operations. The most visible aspect of CSR is a corporation’s willingness to promote and support community, national, and global causes. Corporations generally do this through corporate philanthropy, in which businesses donate some of their profits or resources, to charitable causes.
The best corporate giving programs exemplify philanthropy as an innovative investment in society. Your company has the opportunity to build on these strengths and become a powerful catalyst for transformative improvements that engage the full power of your business in helping solve the world’s biggest challenges.
True CSR is More than Just Giving
The act of philanthropy as a component of corporate social responsibility represents an internalization of the gifting of funds, goods, or services from the corporation itself, sometimes serving as a type of advertising for the firm. For example, the local branch of a bank might donate money to fund uniforms for a school sports team or a health care company might donate to the city opera.
Some critique the traditional philanthropic type of corporate social responsibility for, in many cases, not incorporating the CSR strategy directly into the core business of the organization. While these programs can still have a significant social impact, they can be tough to measure. Philanthropic aspects of CSR are not always tracked from a social accounting perspective, making it difficult for these efforts to be audited or held accountable to external benchmarks.
High Impact Philanthropy
Recently a new practice of high impact philanthropy has emerged, involving the action of making charitable contributions with the intention of maximizing social good in measurable ways. Philanthropy following this goal of maximizing social return often uses metrics to determine social impact, asking how specific kinds of success will be measured and how much actual changes or results will cost. For corporate CSR managers, this approach is one of the best ways to show measurable results for the organization.
Corporate giving programs can give your business a competitive advantage if they are well designed and carefully executed. These programs will:
- Increase your company’s name recognition
- Increase your company’s brand reputation among consumers
- Lead to an increase in sales and positive consumer sentiment as word about your company’s efforts spreads
- Improve the quality of life in communities where your company does business
- Facilitate efforts to recruit and retain talented employees for your company
Officers and directors no longer treat charitable giving and corporate volunteering as a peripheral activity or an after-the-fact distribution of profits. It is no longer sufficient for corporate philanthropy to simply “do good.” If corporate giving is to succeed in the long run, it must provide a financial return to the business.
Increasing Impact, Enhancing Corporate Value
There are a number of indicators that can show how corporate philanthropy is a legitimate and valuable business activity that promotes social good and business objectives. Corporate charitable giving growth may be associated with your company’s future revenue growth, since it enhances financial performance and is not simply a distribution of profits.
Some of the ways a philanthropy program can increase the value of your company include:
- Increases customer satisfaction, which, in turn, will boost your company revenue
- Enhances a positive business image for your clients and the community at large
- Enhances job satisfaction and a greater commitment to your company and helps employees enhance leadership and professional skills
- Enhances employee morale, health, and pride
Philanthropic behavior connects your employees to other citizens and encourages their concern with the well-being of others. Potential employees may also perceive a company with strong community involvement as a more attractive place to work, which will help you recruit top talent.
What is Good for the Community is Good for Your Business
Acknowledging the business benefits of corporate philanthropy does not negate the real power it has to alleviate social problems and enhance communities. Corporate responsibility and philanthropy initiatives embody values and demonstrate how these may be embedded with your clients, your company’s employees, and the community.
The essential justification for corporate philanthropy will be grounded in the notion of your corporation as a member of society, with associated moral and social obligations managed as an investment in the community. An enormous opportunity exists for your company’s leaders to step up and give new life and purpose to your company and increase its value to society and business.