Corporate Philanthropy For Business Charity Purpose

Evolution of Corporate Philanthropy

Describe about the Corporate Philanthropy for Business Charity Purpose.

Fruitful philanthropy nowadays is not about issuing checks for charity purposes; it is continuously becoming a method used by most institutions to communicate with investors, measure their interests, and fulfill their expectations. Corporate philanthropy refers to the generous donations of proceeds given by corporations to non-profit organizations. Corporate philanthropy is continuously evolving, yet the evolution of this exercise has remained constant for more than a decade, and still the concerns of the society regarding corporate involvement on social issues are related to those dated as far back as the 1800s (Edwards, 2015).

In the dawn of the 19th and early 20th century, the courts in the US maintained verdicts against company giving cash away.  With time, however, this activity gained reception and was legitimized through the law court.

The most common corporate philanthropy known to many may be the direct funding of charity events. However, the modern corporate philanthropy landscape has evolved and includes a wide variation of types of ‘giving,’ not only cash contributions but also other means of product donations, knowledge and employee volunteering.

While some may argue that philanthropy may cost the business, it may also provide some benefits to the organization, employees and the community. Understanding the meaning of corporate philanthropy may help the company substantiate the expenditures to the investors and upper administration. Much of the writings on morals and corporate philanthropy campaign for corporate donating by refuting arguments that the exercise is unethical (Ehrlich, 2013). The nuclear dispute regarding corporate giving is that profit is put back into the business or go to the shareholders.

Business is obliged to be economically viable. Early philanthropy by corporates was the owners giving away their money, not those of the company. Nevertheless, donations by corporate started growing in the late 1800s; companies started funding learning institutions and local services like hospitals and churches.

Development in the dawn of the 19th century led to societal hitches, and economic challenges were providing a setting for corporate involvement, Courts during this time began to rule favoring companies that were donating to areas that would, directly and indirectly, profit the business and its workers.

Critics in the early years of corporate donation highlighted that rather than compassionate behavior, companies aimed at fixing problems they had caused (Edwards, 2015). That is, the economic challenges and social issues that the corporations brought. Similar accusations befall organizations involved in donations today. Suspect reasons including an attempt to cover unethical financial connections, environmental issues, and other manipulative business practices. Many scholars have explored corporates inspiration and consumer insights towards corporate philanthropy. The problem is also common in trade publications and the press. It seems to be a regular topic in the journals such as the Journal of Business Ethics. The arguments mostly are that corporations should act responsibly, and shareholders and the community should hold them answerable for their activities from their daily business to their philanthropic endeavors (Haynes, et al., 2012). However, the question begs what measure of accountability is to be employed.

Types of Corporate Philanthropy

Normally, the pyramid of corporates societal duty is the foundation by which investigators measure company’s activities. The most important functions of a business are maintaining economic viability, obeying the laws that regulate the business and being aware of principled practices outside legal devotion, to act conferring to the people’s expectations (Harvey & Brest, 2013). For example, being fair to employees, being environmentally sensitive and competing fairly. The managers of today must be able to balance a mixed drive model bringing together all the three into a tactical pattern satisfactory to the public (Harvey & Brest, 2013).

Corporate philanthropy is on the decline nowadays; the reasons are not difficult to understand. Directors see themselves in a no-win situation; they find themselves in the middle between critics who are challenging multiple levels of philanthropy and the stakeholders persistently pressuring the managers for short duration profits. Giving extra does not satisfy critics, the more corporates donate, the more community anticipates from them. Executive hence find it difficult to justify open-handed expenses regarding bottom line benefits (Brooks& Dunn, 2012).

This predicament has led to companies being tactical in their philanthropy (Harvey & Brest, 2013), though being philanthropic does not guarantee success for the business, nowadays it is not strategic. Increasingly, corporate philanthropy is a form of public relations and marketing purposes, meant to endorse the corporate brand and image through cause-related promotion or other high profile funding. While these activities deliver much-needed aid to worthy causes, they anticipate to escalate company reflectivity and increase employee drive so as to create societal impact (Shaw et al., 2013).

Companies with successful strategic philanthropic efforts follow four plans, they set quantifiable goals, define their involvement, set established principles that guide in decision-making and communicate their activities to the stakeholders. For instance, instead of a company just marketing their participation in societal issues, they also report their charitable efforts as part of CSR report unified into the enterprise’s activities, while pursuing two-way communication with the investors, engaging them in corporate outreach programs (Harvey & Brest, 2013). This stress on the business leadership involvement in driving corporate philanthropy decision-making rather than a department is an indicator that some business stakeholders embrace the awareness of corporate citizenship as an all-inclusive entity. Research suggests that corporate citizen has grown and is projected to integrate its responsible communal behavior, service its economic importance and the interest of the society in which it functions.

Benefits of Corporate Philanthropy

The way corporate philanthropy is in practice today proves that many businesses engaging in this activity are unfocused and diffuse. Many comprise of small cash contributions to aid local civic programs or to provide general support to learning institutions and national charities, all in the expectation of generating goodwill. Rather than being aligned with clear business objectives (Velasquez, 2012), these funds mirror the personal beliefs and values of executives and workforces. It seems that a majority of charity choices made by corporations would be better made by people giving their money. Cisco is one of the companies using context focused philanthropy to attain both societal and economic gain. Through the Cisco Networking Academy, they have come up with an ambitious educational program in which they train computer network administrators, hence easing a possible limit on its growth while providing jobs to high school alumni (Ehrlich, 2013).

By concentrating on social issues affecting its business setting, and by making use of its particular qualities, Cisco demonstrates the unrealized hidden potential of corporate philanthropy. Taking this course, however, necessitates major deviations in the way corporations style their contribution agendas.

There are numerous channels of corporate philanthropy; the most prominent are the matching gift programs and the volunteer grants.

Commonly referred to as “free cash for non-profits.” These are generous giving plans set up by companies in which the business matches giving’s made by workers to eligible non-profit institutions. The categories of events depend on what the corporation’s policies are. Matching gift plan is considered to be corporate philanthropy because the monetary contribution to nonprofit institutions is projected to help assist a mission that once solved, would better civilization (Haynes, et al., 2012).

These differ in that the corporations involved do not contribute cash directly to a nonprofit entity, but they encourage volunteering of their workforce in populations where they reside and work. In this way, corporations provide donations to organizations where workers volunteer on a regular basis (Grace & Cohen, 2013). They achieve it in two ways; a firm donates cash per hour to an organization where employees volunteers and secondly, a corporation sets the threshold that once a member volunteers for a particular period, the company is to provide its donation to that non-profit. Volunteer donations like matching gifts is a corporate philanthropy (Edwards, 2015).

An example of a company that has taken corporate philanthropy to another level is the Apple Corporation. Apple matches gifts up to $10,000 in a year made by full-time employees, and the company has 80,000 workers. Through its charity programs, Apple has contributed more than $78 million through the matching gift plan. Apple volunteer grant ensures that for an hour that its employee volunteers; the firm donates $25 to that nonprofit organization (Velasquez, 2012).

Corporations are encouraged to participate in complete community responsibility, to go beyond customary philanthropy to participatory partnerships that shape commercial and social capital for viable business (Ferrell et al., 2015). Economically viable corporations identify those values and concentrate resources on building and supporting the institution’s viability via a common market and capability alignment approach to financial giving (Shaw et al., 2013). The range of activities for these firms include traditional philanthropy, but the emphasis is on events that take the lead of corporate expertise, build on brands or expand corporate values.

In the years ensuing pivotal corporate moral breaches, corporations rally to institute core values and social practices, communicating their role in the society in a manner equivalent to those used by personalities. The development of the corporate character through court rulings and accepted commitment in social matters point to the culture allowing the business voice to be part of the society’s resolution making. Thus, until changes in legal and satisfactory practices ensue giving corporations less authority, accepting the present status of the corporate being is vital for its participation in the society.

References

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Collins, D 2012, Business ethics: how to design and manage ethical organizations, John Wiley & Sons, Hoboken, NJ.

Edwards, H., 2015. social responsibility and the evolution of corporate philanthropy. An analysis of successful corporate-cause partnership, pp. 1-10.

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Available at: https://doublethedonation.com/blog/2013/09/defining-corporate-philanrthropy/
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[Accessed 18 September 2016].

Harvey, H. & Brest, P., 2013. Money Well Spent: a strategic plan for smart philanthropy. Hoboken New Jersey: Bloomberg Press.

Haynes, K., Dillard, J. & Murray, A., 2012. Corporate Social Responsibility. s.l.:Routledge.

Shaw, WH, Barry, V, Isa, T & Carley, B 2013, Moral issues in business, 2nd Asia-Pacific ed, Cengage Learning, Australia.

Velasquez, MG 2012, Business ethics: concepts and cases, 7th ed, Pearson Education, New York.