The Value of Corporate Philanthropy

There are several ways to interpret the definition of corporate philanthropy, but in general it is considered to be the act of corporations donating some of their profits or resources to nonprofit organizations. Most commonly these are cash donations but may also include product and in-kind donations, volunteers, professional services, technology, advertising support, or the use of facilities/property. The idea is that through philanthropic participation corporations have the ability to combine forces and leverage resources to give back as a group to effect social, community, and public needs.

Measuring and benchmarking the value of corporate philanthropy is challenging and there are several theories as to the best methodology for analyzing bottom-line results; depending on the type of company, the kind of philanthropic efforts and so on. However, there is a general consensus that if corporations carefully judge the interests of their customers and constituencies they can positively impact the company’s bottom line by behaving as good citizens. It also stands to reason that investing in communities and social causes results in customer trust as well as customer and employee loyalty, all of which translate to bottom-line results and shareholder value. Above all, strategically addressing social, community, and public needs benefits all parties and is ultimately just an honorable way to conduct business while giving back.

When creating a strategy for philanthropic endeavors it is important to keep several things in mind:
1) Before committing to a particular group or need, conduct research to determine which causes are most important to executive leadership and employees.
2) Ensure that the cause aligns with company values and culture.
3) Develop a program that is specifically tailored to the corporation and determine how the portfolio of contributions can best be leveraged for the most benefit. The most sustainable solution is usually one that includes a mixture of cash, in-kind contributions, volunteerism, and pro-bono services.
4) Set clear goals, be proactive, and make certain there are clear lines of communication with employees and with the causes/nonprofits your organization is supporting.
5) Regularly review results to ensure that both parties are benefiting from the relationship.

What are some of the unique ways your organization gives back to the community? What do you see as the most significant contributions your organization has made to society? Please send us your comments below. We look forward to hearing your experiences.

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