Why is Philanthropy Important for Business?

Companies are always on the lookout for ideas that make for good business. This is the reason why leading companies invest millions of dollars in marketing, product innovations, and technology advancements. It’s clear to management how these investments can help improve profitability, grow a larger customer base, and fulfill other core business needs.

What isn’t always apparent to senior executives is why philanthropy is good for business too. To some business leaders, corporate giving and philanthropy may seem like an “extra” or something you engage in only if there is sufficient time, money, and interest to do so. In today’s highly competitive market, this couldn’t be further from the truth. Companies who have embraced philanthropy as a core business practice have found they reap rewards far beyond what they thought was possible. This has turned philanthropy, corporate volunteering, and employee giving into corporate imperatives that can’t be ignored and are an essential part of doing business.

Philanthropy Gives a Greater Meaning to the Company

Obviously, every company is in business to make money, but having a vision and duty that goes beyond the goal of turning a profit gives your company a broader sense of purpose. Embracing this vision of giving back to the community can revitalize the initial energy and drive that led to the creation of your company in the first place. When your company builds itself around a greater mission of doing good, you infuse that passion into your products, services, employees, customers, and shareholders. This passion eventually begins to manifest itself in the work of your employees and managers, providing a greater sense of purpose that actually drives innovation and creativity and, in turn, leads to business growth.

Employee Engagement Is Everything

It has become increasingly important to engage employees in the core mission of your business. Today's employees want more out of a job than just to take home a paycheck at the end of a 40-hour workweek. They want to believe in their company’s initiatives and invest personally into the work they do. That is the core of employee engagement.

Knowledge workers make up a much larger portion of the corporate workforce than just a few decades ago. It’s clear to most managers that an inspired and engaged office worker is exponentially more productive than someone who isn’t passionate about their job. This is especially true for younger employees, who are the business leaders of tomorrow and value job engagement more than previous generations. Millennials want to feel inspired by their work.

Customers Are at the Core of Your Business

Whether you realize it or not, your business has an unwritten social contract with the community. Meeting your customers’ needs is the key to running a successful business, and this is why companies focus so many resources on customer service and improving the customer experience. Philanthropy initiatives lead to greater customer engagement by making the connection between your company, the customer experience, and community building. Like employees, customers want to feel good about the companies they interact with. By showing your customers that you care about more than just selling your products, you end up with a more loyal customer base and a stronger bond with the community.

Good Business Is About Generating Positive Emotions

Making business decisions based on emotion can seem counterintuitive. Business leaders are taught to make decisions based on hard data and facts, not how they feel. The reality is people aren’t robots, and most customers (and even employees) make decisions based on their state of mind. Positive emotions like empathy, inspiration, and enthusiasm can drive customers to make a more authentic connection with your brand. A well-executed corporate philanthropy program can resonate with your customers on a deeply emotional level that goes far beyond even the most creative advertising campaign. Knowing that your company is working to be a good corporate citizen makes customers feel better about choosing to buy your products.

Corporate philanthropy should be more than just an afterthought or something to do because it's “nice.” It should be a core mission in your efforts to grow your business, engage your employees, and connect with customers.

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