Corporate Philanthropy is a Powerful Tool for Driving Sustainability
“A certain amount of corporate philanthropy is simply good business and works for the long-term benefit of the investors.”
– John Mackey
There is a yin and a yang to everything in life, so when a business becomes successful you might argue that it has some corporate responsibility to give back to the world that helped shape it. Like the Robin Hood of the business world, companies that consider corporate philanthropy a key component of their business model provide balance to the complementary forces that have enabled them to thrive.
What is Corporate Philanthropy?
Corporate philanthropy can take the form of both monetary donations and non-monetary contributions, such as goods, services, expertise or time, contributing to initiatives that promote the public good.
Monetary donations can be achieved simply by a company donating funds to a cause that aligns with their values or goals, but there are other ways of managing direct giving too. An ecommerce business for example, might offer its customers the opportunity to make a donation to a cause at checkout, perhaps rounding up the value of their purchase or offsetting their shipping carbon by donating to a reforestation program. Matching gift programs are another way, matching the charitable donations made by their customers or employees, effectively doubling the impact of individual contributions. A good case study for corporate fund raising is GoJute’s Banger Rally Challenge where teams compete, driving on some of Europe’s most scenic roads in self-styled ‘bangers’, to raise money for charities of their own choosing. The event happens annually and over the past nine rallies, the total raised has reached just over £1,200,000 – this year we’re hoping to exceed the two million mark.
Non-monetary contributions are also a valid corporate philanthropic strategy and can bring great rewards through local collaborations that support the community as a whole. GoJute are proudly pioneering a number of corporate giving initiatives, from donating surplus bags to a local food bank to providing favorable payment terms to registered charities to enable them to generate branded a merchandise revenue stream with little to no initial investment (you can read more about this programme here).
The Relationship Between Corporate Philanthropy and Sustainability
We often look at sustainability as being an environmentally minded approach to using resources in a renewable way, which can overshadow the social and ethical principles of the concept. Sustainable practices by definition, are those that support ecological, human, and economic health and vitality.
When we ‘do good’ within the community, or for a cause we support, the positive impacts ripple outwards like a stone dropping into a pond. A donation to a charity in pragmatic terms, means that they can upscale their charitable efforts. As a secondary benefit, with cumulative support from corporate givers, they can employ more staff, setup more infrastructure, have an impact on more people and spread positivity further, which in turn compels more people to contribute creating an exponential wave of philanthropic behavior.
By positively contributing to social, environmental, and economic wellness, corporate philanthropy enhances a company’s long-term sustainability and stability.
How Does Corporate Philanthropy Benefit Business?
Businesses increasingly have a wider influence and reach than many public sector bodies, and those that embrace corporate giving are positioning themselves as best practice role models. This fosters goodwill and trust among consumers and stakeholders alike, as well as boosting employee morale and job satisfaction.
A secondary benefit of corporate philanthropy is improving your brand’s reputation and market share. Don’t let this be your primary motivation for corporate giving though, as it can be seen as driven by self-interest rather than genuine altruism, greenwashing if you like. The quickest way to lose credibility among your stakeholders is to be perceived as making false or inaccurate claims.
Corporate Philanthropy Best Practice
“From our experience, best practice is to commit to giving at least 1% of annual profits to make a significant impact. Some foundations are funded by sales of a certain product set, or even by a percentage of total revenue.”
– Edie Network
Think about the impact that 1% of annual profits from all major industries could make to ecological, human, and economic health and vitality…
If you’re sold on the concept, the next thing to consider is how and where to make your contribution. You’ll want to find a cause, or causes, that align with your brand values. This will support a coherent brand identity as well as expand your network of like-minded affiliates, which may present further opportunities as your collaboration develops.
You can shout about your philanthropic endeavors too – improving your company’s reputation is, as discussed, a secondary benefit to corporate giving but that doesn’t mean that you need to be coy about it. If anything, the opposite is true. If corporate philanthropy becomes a blueprint for good business practice, then we’re collectively one step closer to the kind of social sustainability that will provide the building blocks for a better, fairer and more connected world.