What is corporate philanthropy?
In the midst of countless business-related terms that companies may use at some point, “corporate philanthropy” is bound to come up. It refers to any and all charitable donations made by a company to help a cause. Sadly, however, not a lot of organizations are prioritizing ventures that help society. Those are the companies that fail to understand what the importance of corporate philanthropy is.
Benefits for the Company
Even though an act of philanthropy aims to help the third party, it also comes with countless benefits for the donor. This means that corporations that are engaged in this activity will also find many positive outcomes. The main two are the creation of strong brand value and the fostering of important employee connections.
Building Brand Value
According to Forbes, corporate philanthropy is not as simple as writing blank checks to charity. Instead, companies need to spend time looking for unique ways to give back to the community. For instance, UPS utilized their trucks to help those affected during the terrible hurricane that happened in Houston in 2017. Based on that example, corporations that invest in philanthropy must go above and beyond to help those in need.
As a consequence, they will simultaneously increase their own brand value. That means that the public will see their organizations in a positive light. Think about how the local population in Houston views UPS after their donations. Naturally, an increased brand value leads to more customers who increase sales and revenues. Thus, corporations that contribute to philanthropic causes could effortlessly improve brand recognition and customer retention rates.
The next important benefit of corporate philanthropy relates to employee connections. Generally speaking, most charitable causes are specifically focused on certain events. For instance, there are numerous ways to donate to those who might be fighting a certain disease. This is helpful because workers can often choose exactly what they would like to contribute to. As a consequence, the employees who work for some company and support the same charitable causes will form relationships. This leads to a better work atmosphere and could even increase productivity.
Benefits for Society
Of course, corporations almost always contribute to charitable causes so that they can help the community. After all, the most important objective of philanthropy is to help those in need. To that end, the following two benefits of corporate philanthropy are usually the main reasons why businesses give back in the first place.
Facilitating a Change
Scott Cooper Miami is an online collection of publications and news that cover various philanthropic events. According to them, one of the most important benefits of corporate responsibility is its power to facilitate a change. Meaning, it will give rise to better living standards and conditions for the average person. Consider, for example, one of the many donations that Microsoft made over the last few years. In 2014, they gave $1 billion away to help schools around the nation update their PCs.
The previous contribution by Microsoft is a perfect example of what Scott Cooper Miami mentioned. After all, a billion-dollar donation will undoubtedly do wonders when it comes to upgrading the resources that the students use. Ultimately, they will obtain a better education as the tools at their disposal are modern and more powerful.
Motivating Other Companies
Competitive nature of the business is not a secret to anyone. After all, to obtain new customers, brands usually have to steal them from other companies. Luckily, a similar concept applies to charitable contributions. When large organizations make headlines with their latest donation campaign, they receive a ton of positive coverage. Consequently, they maximize their odds of taking the competitors’ clientele.
Well, to not lose market share, competing brands have to reply with their own philanthropic ideas. Think about Amazon and Walmart. If Amazon decided to invest $10 billion into educational opportunities for underprivileged nations, Walmart would have to do something even more impactful. Failing to do so could put them behind Amazon when it comes to popularity. Subsequently, they could lose their customers and revenues would diminish.