Philanthropy, by definition, is “the desire to promote the welfare of others, expressed especially by the generous donation of money to good causes.” Many practice philanthropy to give back to their communities, solve a social cause they care about, create awareness, or be an advocate for change. A musician donating to a small music school, for example, or a celebrity helping to rebuild a community impacted by a natural disaster would be examples of philanthropy.
Corporate philanthropy is when a company takes ownership of its unique position and potential for impact on society by investing its money, time, or resources into specific social or environmental causes.
Patagonia, for example, understands that producing clothing products affect people and the planet. To reduce the amount of energy used and waste generated, Patagonia supports innovative grassroots organizations dedicated to protecting the environment. Through their Corporate Grants Program, Patagonia pledges to commit one percent of their total annual sales to support these organizations.
Patagonia is one example of a business that’s getting corporate philanthropy right. This article provides insight on what corporate philanthropy is, who it helps, and examples of some of the best corporate givers. We’ll take a closer look at:
- What corporate philanthropy is (and isn’t)
- The different types of corporate philanthropy
- The benefits of corporate philanthropy
- Some of the best business examples of corporate philanthropy
What Is Corporate Philanthropy?
Philanthropy, charity, giving voluntarily and freely . . . call it what you like, but it is truly a jewel of an American tradition.
john f. kennedy
Corporate philanthropy is a way for a business to impact society through the investment of its money, resources, or time. Monetary donations, providing in-kind products and services, employee volunteerism, and sponsorships are all ways a business can demonstrate philanthropy. Corporate philanthropy isn’t about public displays of the money and resources that your company can afford to give, though. It’s about genuinely wanting to impact the people and communities they serve with long-lasting benefits.
Lebron James, a professional basketball player, provides an excellent example of true philanthropy. Since achieving success, he’s helped make his hometown of Akron, Ohio, a better place for children to grow up. By establishing the Lebron James Family Foundation, he’s worked to raise money and donate to several charities in that community. One of them, the After-School All-Stars program, raises money to help with the education and mentorship of “at-risk” children to help them graduate. His program currently sponsors over 800 children. In 2021, his first class graduated. James hopes to extend the program throughout the entire state of Ohio.
James’ After-School All-Stars program is a great example of corporate philanthropy. This is because it isn’t just a one-time monetary donation to generate good PR. His program supports things that are personal and meaningful for him, and the money invested will help the Akron community well beyond just any immediate needs and numbers.
Many companies are now getting on board with giving back. A 2020 special report by Giving USA compared total corporate giving from 2019 to 2020, revealing a 5.1 percent increase, totaling $471.44 billion in corporate dollars donated in 2019.
The only problem?
Many of these donations come with strings attached.
What Corporate Philanthropy Is Not
Bill Gates, George Soros, and Michael Bloomberg are considered philanthropists because their foundations donate billions of dollars to various organizations. The problem is that, unlike Lebron James, Patagonia, or even Jan Koum, the founder of WhatsApp, the large donations from these foundations aren’t from the heart. Their donations are supporting whatever channels that are most advantageous and self-preserving for their company. Documents reveal, for example, that Bill Gates donated $319 million to significant media and news outlets like CNN, NBC, and NPR. Generating propaganda in your favor doesn’t come cheap.
Ultimately, money donated to generate positive PR, gain political power, or as a means of self-preservation, isn’t representative of true philanthropy.
Different Types of Corporate Giving
Corporate philanthropy can take shape in several ways. While monetary donations are most common, some companies choose other or additional ways to show support.
Types of corporate giving include:
- Matching Gifts: This is when an employee picks an organization to donate their money to, and the company matches (or even doubles) the donation.
- Volunteer Grants: When employees donate their time to a specific charity or nonprofit, and the company matches that time volunteered in donations, this is a volunteer grant. Volunteer grants are also a prevalent type of corporate giving.
- Employee Grant Stipends: This is when a company offers grants to employees to then donate to a nonprofit of their choice.
- Corporate Sponsorships: A nonprofit organization will acknowledge its monetary support of its mission or activities when a company donates to sponsor a particular effort.
- Volunteer Initiatives: Many companies choose to demonstrate philanthropy by partnering employees with specialized skills with nonprofits to provide added support or expertise.
- Community Grants: Some companies choose to make community grants available for nonprofits to apply for. To apply, the nonprofit would need to explain how their organization could use the grant money in most cases.
Benefits of Corporate Philanthropy for a Company
You want to be the pebble in the pond that creates the ripple for change.
When corporations donate their time or resources, it creates a ripple effect beyond the immediate benefit or needs. If done right, corporate giving can have a positive impact on your corporate culture, your reputation, and your profitability.
Corporate giving can also:
- Improve Brand Awareness: Donating time, money, or resources to support a cause provides the opportunity to show customers and partners what they stand for. This is great for a company’s public image.
- Increase Sales: When your customers and target audience see that you are supporting a nonprofit organization or initiative, they’ll spend more money with you and remain brand loyal. Customers like to support companies that support others.
- Gain Tax Deductions: Tax deductions can greatly impact your company’s bottom line. According to the IRS, corporations can deduct qualified contributions of up to 25 percent of their taxable income.
- Attract Top Talent: People want to work for companies that care about others and their community. Demonstrating philanthropy will increase your pool of candidates to choose from. A study by the MRI Network revealed that millennials place a higher value on a company’s brand recognition, reputation, and level of respect when choosing a company to apply for anything else. This is important because millennials now make up more than half of the American workforce.
- Increase Employee Engagement and Productivity: When employees feel good about their company’s values and actions, they perform better and feel more engaged in their work.
5 Great Examples of Corporate Philanthropy
Serving others prepares you to lead others.
Many companies engage in corporate philanthropy programs, but several of them really set the example. The organizations listed below have invested careful strategy toward using their business to impact the world. And as such, they’re executing their programs seamlessly. Let’s take a look at what they’re doing.
- TOMS: TOMS believes in supporting sustainability for a better, healthier future. To do this, they invest a third of their profits in cash grants and partnerships with grassroots organizations dedicated to driving community-focused change.
- Warby Parker: The Warby Parker Impact Foundation provides greater access to vision services, eye health education, and glasses to those in need. To do this, they partner closely with nonprofits and government agencies and make grants available for application.
- Ancient Nutrition: With the R.A.N.C.H. Project, Ancient Nutrition extends beyond providing powerful superfood supplements that heal the mind and body. Its mission improves sustainability by reducing water, building topsoil, and sequestering carbon dioxide. Additionally, Ancient Nutrition pledges that each purchase supports the planting of one million superfood-bearing perennial trees.
- ThirdLove: More than just an undergarment company, ThirdLove is now the largest donor of undergarments in the U.S., having donated over $50 million worth of products to girls and women.
- Bombas: For every purchase, Bombas donates an item of clothing to people in homeless shelters. Bombas has made over fifty million donations of socks, underwear, and t-shirts for those experiencing street homelessness.
Giving Without Strings Attached
When you can give without expecting anything in return, you have mastered the art of living.
Corporate philanthropy is about giving without having self-serving motives or expectations. It’s a choice that has to come from the heart. Companies like those above are great examples of corporate social responsibility because they’re spearheading philanthropic programs towards initiatives that serve and bless others.
For these companies, it’s not about the tax breaks, political favor, power, or PR. Major corporations are often recognized as corporate heroes for their charitable giving and enormous monetary donations. But in reality, many times, their enormous donations serve to do more harm than good.
Continue learning about a company’s potential for impact and influence by reading:
15 of the Most Socially Responsible Companies
Source: Cosmo Politian
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