The act of philanthropy is deeply entrenched in modern society. From traditional money donations, the practice has transformed to encompass charitable acts. According to P5 Performance, modern acts of philanthropy involve the donation of goods and services, volunteering time and giving assets that impact the community positively. Corporate philanthropy gives organizations the opportunity to strengthen the bond with the community while pursuing a higher purpose. Great examples of corporate philanthropy in modern times include:
• Matching gifts
• Automatic payroll deductions
• Internal employee donations
• Community grants
• Volunteer support programs
• Individual and group volunteer grants
Community grants are usually offered by organizations that wish to see a positive impact on the communities they are supporting. The volunteer support programs, on the other hand, include the provision of free products and services to targeted non-profit organizations. Matching gifts have become a popular way of supporting communal causes. Organizations normally execute the plan by matching the donations made by their employees on a 1:1 ratio.
It is important to restate that organizations and initiatives that hope to attract the support of philanthropist need to be transparent and demonstrate the need for donor involvement. Companies engage in corporate philanthropy for various reasons. According to an excerpt published by the Harvard Law School, the reasons include opportunity to increase shareholder value, need to advance self-interest and Corporate Social Responsibility (CSR).
In the corporate circles, CSR is widely seen as a moral obligation to the community. In 2009, US corporations donated up to $14 billion to support various non-profit organizations. Looking at the larger picture, corporate philanthropy can evolve from two sets of scenarios. First, successful business with ready cash and high valued shares tend to donate more to charitable organizations and causes. This support is usually driven by the growth in discretionary resources.
Secondly, business entities often use charitable giving programs to achieve a competitive edge, which in return strengthens financial performance. The scenario is grounded on the assessment that corporate giving can grow the bottom line and lead to greater profitability. Digging deeper into the intricacies of corporate philanthropy, the Harvard excerpt indicates that top executives and board members with vast social networks tend to give more to charitable causes.
The most effective local networks include club memberships and membership to prestigious cultural or social organizations. Companies also tend to support charitable causes, if the members of the board of directors are generous. On the contrary, companies whose majority stocks are owned by CEO’s tend to offer very little support to charitable organizations. This is largely because most senior executives are keener on growing their bottom line.
There is a lot of discussion on whether corporate giving is a good business strategy or not. However, a meaningful corporate giving strategy can help a business develop strong ties with the community. Companies can also use the platform to improve the economic fortunes of the community while growing the customer base. For instance, contributions made to universities can stimulate innovation, grow the pool of experts and create opportunities for future research and collaboration.
Matt Redhawk’s Take
Matt Redhawk is a well-renowned executive producer, businessman, mentor and philanthropist based in Salt Lake City, Utah. He lives off the grid and prides himself in being self-sufficient. His dedication to the preparedness movement has seen him write many books on self-reliance and sensitize the community on various disruptive events such as natural disasters. His philanthropic philosophy is founded on being prepared for any eventuality and supporting the dreams of others.
While living in Idaho, Matt offered a scholarship worth $4,000 to a talented plane builder to realize his dream of renting a plane. He has also helped many young people pursue education and careers of their choice. For businesses focused on growing their bottom line through corporate philanthropy, there is an effective strategy to realize results. Being an expert in corporate philanthropy, Matt Redhawk believes firms can get the most from the noble initiative through:
• Open mindedness and ingenuity – to effectively implement strategic philanthropy, companies need to go out of their way and speak directly to the targeted communities. Candid conversations can go a long way to identify the challenges faced by the community and find the most plausible ways to impact the community.
• Use multi-layered approach – a multi-layered approach to giving can have a bigger impact on the target community. Besides the usual check handover to support various causes, a company can apply multi-prong approach involving volunteerism, matching donations and encouraging workers to sacrifice their time for a given cause.
• Encouraging a policy of transparency – an organization needs to be transparent in all its philanthropic efforts. This can be achieved by first having an impeccable record of honesty. A well-managed philanthropic program can win over company stakeholders to any cause whenever a meeting of minds is called.
