Corporate Philanthropy: Good for Business, or Just Plain Good?

When it comes to corporate giving, some brands simply write a check and promote the goodness out of it. Others make much out of “investing” in the communities – where day-to-day, ongoing efforts might not be so high profile – while also throwing around their cash and accompanying logos/taglines.

A no-brainer, right? Try anything less than a community investment approach (with scaled down logos and taglines) and brands risk being seen as making a token donation for maximum PR effect. Unless, of course, an overplayed community investment angle winds up portraying a brand as merely trying to disguise that blatant photo-op.

Where should companies draw the line on corporate philanthropy? Is all charitable giving considered “good giving”? Should getting a bang for your buck be part of every marketing effort, including ones intended to “give back” to the community? Even PBS gives you a DVD when you donate enough cash. Corporations have feelings, too, you know.

The two-handed philanthropist?

A trio of Minnesota-based executives, all leaders of the local Itasca Project, tell McKinsey Quarterly that businesses should see it as vitally in their interests to “contribute meaningfully to civic advancement.”

Why? Companies that wish to attract top talent need to show potential employees that the community to which they’re relocating enjoys strong corporate support. Government can’t be expected to solve every problem at the community level, can it?

Beyond that idea, though, lies another that seems to be gathering even more momentum: There’s no point in debating whether companies should give back. The discussion needs to center on what stands to be gained on both sides of the equation. Forget about “what’s in it for the brand.” Something already is and will be in it for the brand. The trick is in understanding how to make the most of both ends of the bargain – the company’s reputation and the community’s benefit. Without short-changing either.

Just do it

Doug Conant, the former CEO of the Campbell Soup Company, tells McKinsey that corporate philanthropy shouldn’t be defined solely as “doing well by doing good.” Companies need to regard the practice as a way to better understand their communities and themselves. Rather than wait for a problem to mushroom and then throw money and a logo at it, Conant believes that companies should see philanthropy as another business opportunity. Then lead the market rather than follow it.

Conant cites Campbell’s stated mission of “building the world’s most extraordinary food company by nourishing people’s lives everywhere, every day.” The company committed to halving their environmental footprint by 2020, partnered with the American Heart Association to address nutritional concerns (which were rumored to have been addressed by removing 2 cups of sodium from every can of soup) and built a longer term program to address childhood obesity and hunger in those communities where the company operated plants. Conant claims that the more the company walked its talk, the more engaged employees became. Translation: Better morale equated to better profits.

Conant readily admits that Campbell’s was hardly an isolated case. Vodafone, he points out, invested in mobile banking services in Africa, where getting an actual bank account can be impossible for those without a permanent street address. Which pretty much includes most people. The U.K. government pitched in with a matching grant, and Vodafone’s idea was off the ground – a success with lessened risk, all because Vodafone took a smaller risk to begin with. And IBM, through its Smarter Cities Challenge, reaped employee developmental benefits that Conant claims couldn’t have been bought by turning to the market for a store-bought solution.

And even though philanthropy is but one weapon in a company’s social responsibility arsenal, Conant believes that the practice is here to stay. And with good reason: “It’s a great way to learn about communities and their needs, and test new business strategies,” he says. “The key is bringing good business insight and discipline to the process.”

Don’t mess. Get the best.

Which brings us back to the Itasca boys. They’re a success in Minneapolis-St. Paul, having twice asked on their organization’s 5th and 10th anniversaries if they should continue. With the “ayes” resoundingly carrying the day both times, here’s how Itasca believes a civic-minded alliance – which is made up of people and not of names or logos – should operate:

  • Organize for Action: For Itasca, this means working virtually, without a formal structure. Because “organization,” to them, means how they do things, not who they are. How does that work? Simple: “[A]ll communities have smart people, companies, and institutions that can provide support—especially when the benefits of being freed from traditional organizational structures are so obvious.” Pick your issues and mobilize for results. Out of issues? Disband and walk away.
  • Concentrate on Specific Areas and Issues: And choose those where you can definitely make a difference as opposed to ones where you’d merely like to.
  • “Just the Facts, Ma’am”: Get all ‘Dragnet’-y on your philanthropic goals – stay focused on facts, but also allow for strong hunches. It’s way easier to partner with groups and individuals who know your feet are firmly on the ground and not tangled up in a hypothetical web of “we’re not sure…but we’re really sincere”.
  • Go Straight to the Top: You want good leaders involved in your cause? Go get ‘em – at the governmental, community and corporate levels. And keep everyone on an equal footing, which reduces miscommunication and the need to get approval from a half-dozen impossibly remote Grand Poobahs. Everyone at the table – even a virtual one — is a principal. We need go-betweens why?
  • Keep the Focus on a Deeper Meaning: Any group can reach a stated goal within a reasonable timeframe. And those 200 backpacks with school supplies will likely go to those who need them. What about the other 800 who need and deserve them just as much? Which is better: Let’s fill as many backpacks as we can and call it a day – or, let’s not call it a day until every kid in this school district who needs a backpack of supplies has one. No ifs, ands or buts. Because it’s not about pencils and paper. It’s about true equality of opportunity.

There will be setbacks and some efforts will fall short. However, as the Itasca gents themselves conclude: “We know personally how meaningful it has been to try to improve the community in which we live and work. The way we see it, leaders spend decades acquiring influence that typically peaks when they reach the very top of their organizations. Wouldn’t it be wonderful to have the opportunity, at that point in your life, to engage with others in the same position and do something bigger than all of you?”

Image via Mike Gifford / CC BY-SA 2.0

Pierce Mattie

Pierce Mattie is a full-service marketing agency that interacts with consumers and key stakeholders at every stage of the journey. With a focus in beauty, health and wellness, we are immersed in the marketing landscape, able to powerfully communicate a brand’s point of difference to acquire and maintaining customers. The content team is obsessed with what's trending in the digital world, and how it intersects with consumer behavior. We are passionate about the changing landscape of the world, including how emergent technologies affect brand attachment, how diversity and inclusivity are critical to success, and where humans fit into the equation.

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