The Role of Philanthropy in Corporate Responsibility

As regular readers of my blog may have divined, I have struggled with the role of philanthropy and even volunteering within corporate responsibility. When I say this, I hear sharp intakes of breath from not only my fellow practitioners but I am sure from many wonderful non-profits who depend on corporate funding for some of their critically required activities.

I don’t underestimate the importance and value of the money and the services community investment enables.  But, I believe that how companies both make and spend our money has a far bigger impact on society and the environment than how we give away the one percent of our profits that is the standard.  I worry that the work on community investment of this form can distract from paying the necessary attention to the far bigger impact of products and services, operations and value chain.

In my whitepaper, The Four Dimensions of Sustainability, I don’t even mention philanthropy and volunteering. And in a post I wrote 18 months ago I expressed my dislike of the terminology “giving back to the community. Nevertheless philanthropy and volunteering are a major part of my role, and a part I really enjoy in my role heading up corporate responsibility for BT in the USA.

So how do I square the circle? I square it in the following ways:

In many countries, the US being probably the most pronounced example, community investment is considered an expected component of corporate behavior and therefore the license to operate, by many stakeholders. Stakeholder priorities are an important component of corporate responsibility, whether or not the outcome coincides with my personal view of the priorities.

Volunteering and philanthropy are important to employees, reduce churn and increase attractiveness to prospective employees. In this context perhaps they are more HR than CR, but either way they are valuable for the business. In a similar vein, these activities help brand awareness and reputation – perhaps an argument they are really marketing and communications rather than CR, but even if there is a big overlap, if they are good for the business and for the community they are still partly CR.

But most important to me, as a CR practitioner, is that in order to embed CR in the business and into the way we make and spend our money, we need to increase the awareness of, and sensitivity to, the issues amongst employees. This is best done by helping employees with their giving through employee giving programs, by aligning our philanthropy with our core business and by supporting people in their volunteering. Hands on experience is the best way to learn. But, this engagement must be associated with an understanding that the community engagement activity is not the end in itself. It is a means to an end, which is to develop understand of the issues facing community and society and bringing that understanding into the way you do your job –whatever that job is.

One last area that I want to explore in a subsequent post is whether there is a role for philanthropy as a form of compensation for negative impact of a business.

How do you see philanthropy fitting into the field of corporate responsibility?


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