Corporate Philanthropy Innovation in Corporate Giving

Question: Discuss about theCorporate Philanthropy for Innovation in Corporate Giving. Answer: Introduction: Corporate Philanthropy is when the business decides to the promote welfare of the society in which they work and live. It is focused on treating people right, working for a cause to make changes for the betterment of the community (Levy, 1999). The organizations undertaking corporate philanthropy make donations to other organizations working for the development of the community or work directly by undertaking some initiatives. These donations could be in cash or by volunteering time or offering use of companys facilities. The organizations usually have a separate team looking after this aspect. The company aims to create and achieve a positive social impact by supporting these beneficiary causes. The business has to utilize its resources and put them to use, so that they become useful for the society. These philanthropic initiatives add value to the company, but the most important aspect is that these values have to align with the long-term goals of the company. For these programs to be successful it is important that they are strategically planned. They open up an entire platform for the company to perform its social responsibilities. They have to be viable for a long period of time. The company engaging in corporate philanthropy has to adopt ethical business practices (Koch, 2012). They should refrain from involving into any sorts of corruption whether grand, petty or political. The company can have a framework that involves certain principles in to their business practices. The foremost is to consider human rights, practices that do not violate or abuses human right policies should be supported by the business. Second is to follow labor laws, i.e. especially elimination of discrimination and child labor, valuing diversity in the organization, and following the right practices with the people employed in the company. Next is to be considerate towards the environment, realizing the impact that the business has made on the environment, encouraging environmental friendly techniques and promoting sustainable development along with undertaking few responsibilities to reduce the negative impact on the environment. Lastly, business should refrain from engaging into any form of corruption including bribery and extortion (The Ten Principles of the UN Global Compact, 2016). Traditionally the companies undertakes corporate philanthropy in two ways, first is by matching the donations made by their employees to a nonprofit organization. Second is when the employees ask the companies to donate the money when the employees volunteer their time for the similar nonprofit organization. Most companies adopt either of the two approaches of corporate philanthropy. Apple Inc., US multinational company undertakes both the practices, the matching gift Program as well as the Volunteer Grant Program. The company matches the donations up to $10,000 in a year made to an organization by its full time employees. The Volunteer Grant Program undertaken allows the company to generously donate $25 for every hour that employee volunteers for the nonprofit organization (Apple Inc. Matching Gifts, 2016). Google, one of the leading companies in the world also follows Matching Gift Program for its part and full-time employees along with following Volunteer Grant Program that give a $50 grant to a nonprofit organization for every five hours that an employee volunteers (10 Companies Doing Corporate Philanthropy Right, 2016). Effectiveness of Corporate philanthropy initiatives is a matter of debate. Organizations feel that giving it back to the society is an obligation in the current business scenario, as it creates goodwill. But there are very few companies who have in real figured out how to strategically plan their philanthropy actions that aligns with their long term goals along with creating a positive social impact. One of the most prevalent practices of philanthropy is matching the donations made by the employees to an organization. This enhances the moral compass of an employee and also reflects their beliefs, values by leaving the choice of charity onto them. This somewhere reduces the burden of decision making of donation by the company. Scholars suggest that the chances of people making their own decisions in donating the money would be more appropriate than the company at large. However it is argued that strategic philanthropy does not come into the context when an employee is making his own choice. In strategically planned philanthropy there has to be some connections between the donations made and the business. When employees are making their own choice, there are very few chances that they align with the business and its long term goals. Companies should use the corporate philanthropy to get a competitive edge. In the long run, the goals of philanthropy and business should align in such a way that it creates more opportunities for the business while simultaneously creating a good impact in the society. Supporting the related industries is one such way that will help the business in increasing its productivity. The alignment of social benefit with economic benefit will generate pure business along with pure philanthropy. The social and economic value could be created by the company by selecting the best grantees, improving the performance of the grant recipients, and most importantly by advancing their knowledge (Porter and Kramer, 2002). Ethical practices refer to carefully consider the practices and policies regarding issues, such as promoter trading, bribery, discriminatory practices, and corporate social responsibility (Simpson and Taylor, 2013). Ethical behavior and social responsibility in business should go hand in hand. A business can gain trust of the society by performing social responsibilities ethically. Undertaking the responsibilities ethically would bring certain impact on the business, it would help the business in attracting more customers, thereby increasing profits when the sale increases. It would also increase employee retention, reducing the labor turnover and thereby reducing the cost of hiring and training the employees according to the needs of the company. It would also attract investors in the company and would create a positive impact on the share prices and market value of the company. All this in a way is a progressive environment for the business to flourish. Ethical behavior also provides an advantage of improving internal communication in the business, because it is important to share significant information with the people associated with the organization. Once the people related are aware of the values they would focus on improving the overall outcome for the sake of the companys growth as well as personal growth. It also helps the business in avoiding legal complications. Once a company follows ethical practices and abides the laws, like environmental, labor laws then it builds a strong shield for itself which protects it from getting into any legal trouble. It also makes the values of the company stronger. Most importantly it gains customer loyalty, which is the ulterior motive of any business organization (Idowu and Filho , 2008). Few ethical practices that could be followed by the business are like, considering environmental factors- to reduce the negative impact of business on the environment. A business big or small definitely has some carbon footprints on the environment; business should do some efforts to reduce them. Ethical labor practices by treating all employees with fairness and equality and abiding the laws of the land are equally important. Next comes is philanthropy, a business has a lot of resources that could be used by the society for development. All these resources put to efficient use by the business could create a positive impact on it and garner a lot of goodwill in the community. An organization could motivate its employees to volunteer their time in supporting certain causes or organization that work for nonprofit motives (Conference Board, 1972). A very inspiring example of one such corporate philanthropy is Toms Shoes- a company that donates one pair of shoes to a child who is deprive d of them whenever a customer buys one pair of shoes from their brand. This reflects that the company does undertake philanthropy in its true sense (TOMS, 2016). Corporate Philanthropy should be undertaken with planning and it should align with long term goals of the business, then only it serves the purpose. It should be planned strategically then it would be useful. What is observed in the modern trends is that companies spend big money in the names of philanthropy to promote a brand and not be just to the society. They associate themselves with big brands or sponsor high profile events in the name of philanthropy. But that does not even count on it. The true meaning of philanthropy would be when business would put its resources in a strategically planned manner for the better and development of the society to create a positive impact which would also give it a competitive edge in the market. Aligning long term goals of sustainability with current philanthropy practices is what is required for the business. Uselessly spending money in the names of philanthropy but not using it to get an edge in the business would not be beneficial in the lo ng run. The philanthropy practices should be focused and should represent an objective. The more improvement of society relates to business to more it will be economically beneficial for the business. For the long run, economic and social goals should align for the business to flourish. References Conference Board (1972). Effectiveness and Innovation in Corporate Giving: Proceedings of the Working Conference on Company Contributions Held in Toronto, September 30 and October 1, 1971. [Online]. Canada: Conference Board in Canada, Available at: URL https://books.google.co.in/books?id=9YO4NwAACAAJdq=effectiveness+of+corporate+philanthropyhl=ensa=Xved=0ahUKEwisx-XikJPPAhVDSSYKHXVFD5oQ6AEIJzAB. Accessed on 15 September 2016. Idowu, S. and Filho, W. (2008). Global Practices of Corporate Social Responsibility Business and Economics [Online]. Germany: Springer Science Business Media. Available at https://books.google.co.in/books?id=hGAsvy7P5hYCpg=PA111dq=ethical+practices+of+csrhl=ensa=Xved=0ahUKEwjEqaeUiJPPAhVB2SYKHdkGD4UQ6AEIGzAA#v=onepageq=ethical%20practices%20of%20csrf=false. Accessed on 15 September 2016. Koch, F. (2012). The New Corporate Philanthropy: How Society and Business Can Profit. Germany: Springer Science Business Media. Available at: URL https://books.google.co.in/books?id=7XXjBwAAQBAJpg=PA129dq=corporate+philanthropyhl=ensa=Xved=0ahUKEwj81_OA_5DPAhVD-GMKHVGGDLIQ6AEIQzAG#v=onepageq=corporate%20philanthropyf=false Accessed on 15 September 2016. Levy, R. (1999). Give and Take: A Candid Account of Corporate Philanthropy. US: Harvard Business Press. Porter, M. and Kramer, M. (2002). The Competitive Advantage of Corporate Philanthropy. [Online].Available at: URL https://www.expert2business.com/itson/Porter%20HBR%20Corporate %20philantropy.pdf Accessed on 15 September 2016. Simpson, J and Taylor, J. (2013). Corporate Governance Ethics and CSR. [Online]. UK:Kogan Page Publisher. Available at URL: https://books.google.co.in/books?id=XuXyGWRFu5oCprintsec=frontcoverdq=ethical+practices+of+csrhl=ensa=Xved=0ahUKEwjEqaeUiJPPAhVB2SYKHdkGD4UQ6AEIJjAC#v=onepageq=ethical%20practices%20of%20csrf=false Accessed on 15 September 2016. www.doublethedonation.com, (2016). 10 Companies Doing Corporate Philanthropy Right. [Online]. Available at: URL https://doublethedonation.com/corporate-philanthropy-examples-10-leaders/ Accessed on 15 September 2016. www.doublethedonation.com, (2016). Apple Inc. Matching Gifts. [Online]. Available at: URL https://doublethedonation.com/matching-gifts/apple-inc Accessed on 15 September 2016. www.toms.com (2016). About TOMS. [Online]. Available at: URL https://www.toms.com/corporate-responsibility Accessed on 15 September 2016. www.unglobalcompact.org , (2016). The Ten Principles of the UN Global Compact. [Online]. Available at: URL https://www.unglobalcompact.org/what-is-gc/mission/principles Accessed on 15 September 2016.