The Debate about the Motivation behind Corporate Philanthropy

The Debate about the Motivation behind Corporate Philanthropy

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The benefits of corporate philanthropy for a company are manifold. In addition to creating a better public image for themselves, organizations can use philanthropy to motivate and inspire their employees. However, a great debate about the motivation behind corporate philanthropy has raged for some time. While some people believe that motivation matters, others contend that doing good, for whatever reason, is still beneficial.

For the most part, companies engage in philanthropy for reasons that are not purely altruistic. Companies expect to build connections, increase good will, and improve public relations through their giving. At the same time, this does not mean that they do not care about the causes they support. Today, companies collectively donate nearly $20 billion to causes each year, an astounding figure that has a tremendous impact and must be motivated by more than business self-interest.

 

Does Motivation behind Corporate Philanthropy Matter?

Corporate philanthropy represents a win-win situation, so does selfish motivation matter in the long run? No matter the reason prompting it, a corporate donation still makes an impact. In that sense, motivation may not matter. At the end of the day, businesses are for-profit organizations, and it makes sense for them to get the most out of their charity as they can, regardless of whether that was the primary motivation in the first place. Business-minded individuals may even see philanthropy as a sort of investment. If giving back provides additional exposure that increases revenue, then the company has even more resources to donate in the future.

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Research has shown that corporate philanthropy really does boost a business’ performance. Giving campaigns can positively influence public opinion of a company and improve the organization’s overall reputation significantly. For example, a 2014 Nielsen survey found that more than half of online shoppers would pay more for products from companies they see as socially responsible. In addition, philanthropic campaigns can help attract more talent to an organization; people want to work for an organization they can be proud of. Business professionals understand these major benefits of giving, even if their motivation is primarily social good. Failing to capitalize on the benefits of giving would not be good for business.

 

Is There an Ugly Side to Corporate Philanthropy?

The belief that any good deeds are beneficial regardless of motivation has its limitations. One of the ugliest sides of corporate philanthropy involves using charity to distract from bad press or controversy. Sometimes, companies decide to throw money at a problem instead of addressing it head on—a “solution” that is more often something demanded by attorneys than an act the company truly wants to do. While philanthropy can be used to help repair a tarnished image, it does not take the place of acknowledging and addressing a grievous mistake. Too often, the public sees through these thin veils, and the ensuing additional bad publicity fuels skepticism around corporate philanthropy as a whole. This could hinder companies that truly want to make an impact.

 

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The other issue regarding motivation behind corporate philanthropy is its transactional nature. When organizations view giving as something on a public relations checklist, they often miss the point entirely. Over the decades, corporate philanthropy has become more ingrained in the mission of companies, and this is a trend that shows great promise. For example, it is one thing for a plastics company to have its employees volunteer to clean up a local beach. However, it goes further for the company to think about why plastic products end up on the beach in the first place and put their energy into addressing the root of the problem.

 

Can Motivation Affect the Outcome of Philanthropy?

Forbes Insights took a more quantitative approach to addressing the question of motivation in corporate philanthropy. In 2012, the organization published a study called “The New Paradigm: Volunteerism. Competence. Results.” that surveyed more than 300 senior executives from corporations around the world. Respondents largely confirmed that volunteerism and philanthropy are becoming increasingly important for business interests. However, the research also uncovered some interesting findings that suggest motivation does affect the outcome of philanthropy. One of the key findings showed that corporations whose philanthropy is motivated by social benefit over corporate benefit were more likely to give and engage in volunteerism.

The study also confirmed that many corporations are moving away from transactional philanthropy. Respondents reported that they were increasingly interested in volunteerism involving the specialized skills of their employees, and that they were more likely to support organizations that could engage their employees as volunteers. Companies are noticing that they can make a much greater difference when their checkbook giving aligns with the skills and knowledge their staff can offer to various causes. Perhaps this explains why companies motivated by social good are more likely to give. These companies want to align their monetary and nonmonetary donations to create the largest impact possible.

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