The Business Case for Corporate Philanthropy in 2020

Author:
Leslie Pine
Theme:
Corporate Philanthropy
Friday, August 21, 2020

Two years ago on this blog, I observed that many company leaders had started to shift from asking “why do philanthropy” at all, to “why do strategic corporate philanthropy?” The broader business community had accepted that philanthropy delivers positive change on the bottom line as well as in the world around them, and companies were realizing that being strategic could be as important to nimble and effective philanthropy as it is to business operations. I offered five pillars on which such an approach consistently rests. 

Fast forward to 2020 and a year of unprecedented crisis and change that continues to test us all. Yet even within these past few months, companies that built upon the pillars of strategic philanthropy have realized the flexibility to pivot in crucial ways, becoming even more connected with communities and stakeholders. Being strategic with your company’s philanthropy is as – or possibly more – important as ever. All eyes are on businesses’ responses to world events, and how companies step up to make a difference when and where it is needed most. As your company addresses change and examines ways to adapt effectively, the five pillars of strategic corporate philanthropy remain as steady guideposts for evaluating current programs and next steps:

Strategic Philanthropy is Authentic 

TPI’s conversations with corporate leaders make it crystal clear that authentic actions are of utmost importance to all stakeholders. Employees, customers, and others become skeptical if they think a company is supporting philanthropic causes purely for good optics. On the other hand, stakeholders have particularly positive feelings about companies whose corporate leaders are genuine in their concern about the community and the world. One senior leader with whom we spoke said corporate philanthropy “is in our DNA,” as the company’s founder was philanthropic from day one, and this legacy continues decades later. Another CEO described his company as “a profitable philanthropy,” and instilled this idea in the company’s mission statement, values, and actions. Many TPI clients, in creating or refining programs, engage their most valuable stakeholders – their employees – in defining their most authentic missions.

Strategic Philanthropy is Integrated

If you “really think through it and get a smart start,” notes one CEO, you avoid the scenario of a disjointed program, with marketing, human resources, product development, and customer service each heading off in different directions. A strategic program gives you a solid foundation from which to build, to assign tasks, and to streamline the resources you plan to invest. It also means that each employee knows the value of his or her contribution, and the company can increase training in the areas of teamwork and leadership productively and in ways that dovetail with employees’ passions, in turn. Thermo Fisher Scientific, for example, relies on its internal associate teams to drive local responses, and those connections have allowed it to pivot and tailor its outreach on community needs, no matter what they may be in the wake of COVID-19.

Strategic Philanthropy is Multi-Layered

Philanthropy is more than handing over a check, and corporations have multiple tools to leverage that reinforce progress on the issues of concern. Supporting volunteerism and the events employees participate in on their own time, or matching donations, multiplies their impact and yours in turn. In-kind donations can range from products, to real estate, to supplies needed in disaster recovery. Reebok withdrew from marketing and partnership commitments with other companies that did not respond promptly to calls for change for social justice and racial equity. Anheuser-Busch donated water in cans to hurricane-hit regions, while others opened their doors or delivered food and support to rescue teams and victims taking shelter. Strategic philanthropy also means your company knows in advance what can be done, so that procedures are in place and action can be immediate. 

Strategic Philanthropy is Open-Minded and Creative

Strategic philanthropy requires companies to “start talking to people who don’t look like you and start talking with those who are on the receiving end.” This applies not only to charitable dollars and in-kind resources, but to product lines and customer support. Research and development tied to philanthropic programs is not-so-coincidentally in place in many companies that give greater percentages of their pre-tax profits. A competitor’s new SKUs on the shelves, an upgraded app, or that award-winning marketing campaign are more likely to be the result of personal and direct engagement with customers and communities on issues of mutual concern than the brainchild of some genius hidden away in an office.

Strategic Philanthropy is Transparent

A company needs to be authentic in its philanthropy in order to be transparent. Transparency, in turn, will make or break you in difficult times. Companies evolve and issues arise, and a company’s character and track record on honest, thoughtful, and clear communication with stakeholders is often measured by how it manages its philanthropic programming. Reputation management and the ability to maintain consumer, employee, community, and business partner trust is more important now than ever. 

As companies around the world tackle new, unimaginable challenges, corporate philanthropy is more important than ever. And doing philanthropy strategically is absolutely critical. As any good leader will tell you, the better the question, the more impact an answer can deliver. So if your company is now asking “why strategic philanthropy” then congratulations, and don’t worry. “You don’t need to reinvent the wheel,” as one CEO with whom we’ve worked confirms. Knowing you need a strategic philanthropic giving program is the first step in the best possible direction your company can take, for your business, your employees, and the communities you serve and value.

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