The Business of Giving

With the explosion of private enterprise in many parts of the world, there are more wealthy people looking for ways to give back to their communities. Business leaders in areas like Eastern Europe, the former Soviet Union, and China are exploring ways to contribute to society.

Some may wonder where business and philanthropy intersect. I believe that a healthy public sector is absolutely essential to a capitalist economy. When more money is invested in areas such as education and public welfare, it generally strengthens the environment in which businesses operate. This can result in a virtuous cycle where a better business environment leads to better profits that can lead to increased philanthropy.

What really excites me is how business has informed the philanthropic sector. Historically, corporate philanthropy was little more than a one-time gift of money that met an immediate need, often totally unrelated to a company’s mission. Today, however, there is a new area—strategic philanthropy—involving corporations that find ways to link their philanthropy to their business strategy. Companies increasingly are finding synergies between these two areas so that both profit and philanthropic efforts are under the same strategic umbrella.

Many large corporations have embraced strategic philanthropy. Networking technology giant Cisco offers free technology courses and certifications that are taught using Cisco equipment. American Express provides travel agent training online, free of charge. Dannon sells its Danone Dahi, a nutrient-enriched yogurt tailored to the health needs of many of India’s impoverished children, at a low cost.

These philanthropic efforts help society, but they also result in profit for the company. By creating a financial return to the company they can then reinvest these funds to create a sustainable philanthropic effort.  There is an old Chinese proverb that says: “Give a man a fish and you feed him for a day. Teach a man to fish and you feed him for a lifetime.” Strategic philanthropy is the modern equivalent of teaching someone to fish. 

–Excerpts of an article by Philip L. Cochran, associate dean Indiana University Kelley School of Business

CSR and working for the good guys

Experts agree: employees want to work for the good guys. And if companies want to attract and keep top talent, corporate social responsibility (CSR) matters.

“For today’s ‘millennials’ entering the workforce engagement in sustainability is a must-have, not a nice-to-have,” says Kellie McElhaney, director at the Center for Responsible Business, Haas School of Business, University of Berkeley. “They don’t want to be told what the company is doing. They want to do it.”

Don’t be surprised to see more CSR projects popping up at offices near you. Employee engagement and CSR is a hot topic, and if you are wondering why, the answer may be in the numbers. In a Society for Human Resources Management study, companies with strong sustainability programs were compared to companies with poor programs. The former had 55% better morale, 43% more efficient businesses processes, 43% stronger public image, and 38% better employee loyalty.

“CSR has proven to be one of top ways to keep people engaged,” says McElhaney. “The top two criteria young people put on job selection today is ‘flexible’ and ‘meaningful,'” she says. “We are looking for purpose. And these kids will go work for a non-profit or some sort of social enterprise to get it.”

Many believe the case for CSR is not just internal, but together with price and quality, it could be the one of the top three qualities needed for a successful company’s brand development. A study from earlier this year by public relations firm Edelman found that 87% of consumers around the world believe corporations should place at least equal weight on business and society.

Spreading corporate social responsibility globally

It is now essential for U.S. companies that expand overseas to manage their global workforces, and respect other cultures and other workforce environments, and start forming a global profile and consciousness. Part of this connects to corporate social responsibility (CSR).

The rapidly expanding global workplace is driving the implementation of sound corporate human resources practices that should focus on three key areas for CSR to help create a cohesive map for the present and the future. The three main ways to bridge the gap between corporations and their employees are:
• Proactive community relations
• Strong training and development
• A cohesive global HR platform

Ensuring that an organization maximizes the impact of its CSR efforts begins with encouraging community relations. This can be done through your HR department by implementing reward programs and charitable contributions, and encouraging community involvement and practices. What you can do as part of your corporate responsibility plan:

1. Recognize, via corporate email, websites, and newsletters, the social-type work done by employees.
2. Institute a rewards program to promote other employees to join these activities.
3. Recycle paper and bottles in offices and recognize departmental efforts to do so.
4. Collect food and donations for victims of floods, hurricanes, and other natural disasters around the globe.
5. Encourage reduced energy consumption – subsidize transit passes, make it easy for employees to carpool, encourage staggered staffing to allow for after rush-hour transit, and permit telecommuting to some degree.
6. Encourage shutting off lights, computers, and printers after hours.
7. Work with the information technology team to switch to laptops over desktop computers. Laptops consume up to 90 percent less power.

8. Increase the use of teleconferencing in addition to on-site meetings and trips.

9. Promote “brown bagging” lunch in the office to help employees stay healthy.

–Shafiq Lokhandwala

Philanthropy and Corporate Social Responsibility (CSR)

Corporate social responsibility (CSR) is also referred to as corporate conscience, corporate citizenship, social performance, or sustainable responsible business. The goal of CSR is to embrace responsibility for a company’s actions and encourage a positive impact through its activities.

CSR is meant to aid an organization’s mission as well as a guide to what the company stands for and will uphold to its consumers.

Corporate philanthropy is many times mistaken for corporate responsibility. But it is not the same, or to be more accurate, it is just one dimension of CSR, and frankly not the one we should be concentrating on when we talk and debate about the social responsibility of business.

To figure out what CSR means and why it doesn’t equal philanthropy, we can use the classifications Prof. Geoffrey P. Lantos presents in his paper, The Ethicality of Altruistic Corporate Social Responsibility. Lantos offers three different types of CSR:

1. Ethical CSR: Morally mandatory fulfillment of a firm’s economic responsibilities, legal responsibilities, and ethical responsibilities.

2. Altruistic CSR: Fulfillment of an organization’s philanthropic responsibilities, going beyond preventing possible harms (ethical CSR) to helping alleviate public welfare deficiencies, regardless of whether or not this will benefit the business itself.

3. Strategic CSR: Caring corporate community service activities that accomplish strategic business goals.