Philanthropy

Corporate Philanthropy 101:
What You Need to Know


October 16, 2020

Though the phrase “corporate philanthropy” might bring to mind images of Warren Buffet and Bill Gates, corporations with far more modest reaches than Berkshire Hathaway and Microsoft can also integrate corporate philanthropy into their organizations. After all, businesses are frequently created to solve problems, so aligning humanitarian efforts can often be a logical extension of your company’s mission. At Plexus, for instance, we are in the business of health and nutrition, so working to end malnutrition in America is a natural philanthropic endeavor for us. Let’s talk about what corporate philanthropy is, how it differs from charity, and how you can practice it.

What Does Philanthropy Mean?

The definition of the word philanthropy comes from the Greek suffix phil-, meaning “loving,”, and anthrōpos, meaning “human being”—according to Merriam-Webster, philanthropy literally means “love of mankind” (though many philanthropists also give money to animal and environmental causes).

Philanthropy is similar to charitable giving, but philanthropy is usually more focused on fixing systemic issues instead of simply giving money (though that’s important too!). A popular understanding of the difference between charity and philanthropy is that philanthropy tries to fix a specific societal problem at its root, beyond just the problem itself.

What is corporate philanthropy?

Corporate philanthropy is the social conscious mission and behavior of a company. Often, corporate altruism incorporates direct charitable giving, such as with matching gifts and volunteer grants. But it can go farther than this, from establishing in-house foundations to working alongside existing nonprofits.

What is the Difference Between Corporate Philanthropy and Corporate Social Responsibility?

Just as charity might be an aspect of philanthropy, philanthropy might be an aspect of corporate social responsibility. Corporate social responsibility deals with the overall ethical behavior of a company, including in its day-to-day business practices.

For instance, socially responsible countries might work to minimize the waste they produce, diversify their leadership, and protect the rights and working conditions for their employees around the world.

What are the Benefits of Corporate Philanthropy?

Corporate sponsorship is sometimes seen as an ingenious way to promote, or even exculp, a corporation’s image. In the past, fossil fuel companies have come under fire for their use of nonprofits to “greenwash” polluting business practices.

But corporate philanthropy is usually not sinister, and more often than not it can be beneficial to both the companies that practice liberality and the causes they care about. As Michael E. Porter and Mark R. Kramer wrote in the Harvard Business Review, corporations can use philanthropy to boost their “competitive context,” that is, “the quality of the business environment in the location or locations where they operate.”

Generosity aligned with the goals of a business can be truly transformative—Porter and Kramer point to Cisco Systems’s Cisco Networking Academy, which not only provides valuable skills and opportunities to high school graduates, it gives Cisco access to a skilled group of potential employees.

How to Practice Corporate Philanthropy

Improving competitive context doesn’t just mean providing job training, though. There are perhaps as many ways to practice corporate philanthropy as there are companies. Some further examples of philanthropy include:

Corporate philanthropy at SC Johnson

Porter and Kramer point to work that improves a local environment, thus making it more attractive to potential employees, as another means of competitive context philanthropy. In 1996, the home supplies manufacturer SC Johnson began its “Sustainable Racine” initiative to make Racine, Wisconsin, where SC Johnson’s headquarters is based, a more environmentally and economically attractive place to settle down. Downtown Racine’s declining commercial vacancy rate, from 46 to 18 percent, may be partially credited to their efforts.

Corporate philanthropy at AT&T

When Reynold Levy, formerly of the 92nd Street Y, took over the new philanthropic foundation at AT&T in 1984, he insisted that the foundation be more than just a patron of other nonprofits. Instead, Levy tied AT&T’s philanthropy to its very business model. By supporting innovative artistic events and museum exhibitions, for instance, AT&T could appeal to the kind of upscale consumers it needed to retain.

Corporate philanthropy at Plexus

At Plexus, for every bag of Plexus Lean sold we donate 14 meals to Feeding America, the leading national organization of network food banks, and give each of our employees 16 hours of paid volunteer time annually. This not only helps feed struggling Americans, it gives our employees a sense of pride, satisfaction, and purpose.

Conclusion

A company’s legacy is not just measured by its profits and reach: it’s also measured by the good it does, particularly as many companies insist on taking easier paths. Corporate philanthropy is a way to ensure that your company’s legacy is a stake in a better world.

Find more information about my corporate philanthropy philosophy by visiting https://christopher-pair.com/philanthropy/

Author: Christopher Pair

Christopher is the President of Operations & International at Plexus Worldwide. His real passion is to help solve the global food crisis, but in addition to employing philanthropic initiatives within the company, Christopher has worked closely with Plexus overseeing the company’s distribution, manufacturing, logistics, finance and accounting departments. When he’s not publishing on christopher-pair.com, you can read his latest articles on Medium. Connect with Christopher Pair on Facebook or Twitter @christ0pherpair.

Sources:

https://christopher-pair.com/philanthropy/

https://hbr.org/1994/05/the-new-corporate-philanthropy

https://hbr.org/2002/12/the-competitive-advantage-of-corporate-philanthropy

https://www.researchgate.net/publication/47695510_Beyond_Profit_Rethinking_Corporate_Social_Responsibility_and_Greenwashing_After_the_BP_Oil_DIsaster

https://doublethedonation.com/tips/corporate-giving-programs/

https://brensimon.com/difference-between-charity-and-philanthropy/


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