Corporate Philanthropy

The companies need to apply the same kind of strategic focus to their philanthropic decision that they do with the rest of the business. Some general guidelines, which every company must keep in mind while engaging in any philanthropic activity:

1)????Undertake meaningful actions: If the company and the cause is not aligned (if an intuitive fit does not exist), then the company risk consumer being skeptical of the relationship, which may lead to failed initiative. For example, many times we see a corporation getting wrapped in the girlish “pink ribbon” of breast cancer awareness without asking tough questions about who really benefits from it. Usually, companies fall into the trap, when they pick a cause more for the intention of boosting its sales and corporate image and less for the intention of helping a worthwhile cause. Hence, it is very important for the company’s management, to carefully review how the campaign portrays who are affected by the cause (pretest the concept, perform research, ask tough questions, vet the merits and execution of the campaign). Most successful initiatives are those which met an unfulfilled need. Hence, companies must invest sufficient time and energy while picking up the cause/activity, and must avoid redundancy in selecting a cause which is already supported by multiple organizations.

2)???Must be authentic and should fit within company’s culture: Engaging in a philanthropic initiative is a serious business for any company, and it’s not just a matter of simply writing checks. The initiative, which any company engages in, must be authentic and must be connected to what they do or to the company’s culture. It is impossible to sustain any initiative, if it does not match with the company’s culture or its core competency. In fact, companies who pick initiative basis cultural fit and their core competency goes on to improve their value chain.?It is also important, that any initiative is within the legal boundaries of the law and must not challenge any government rules and regulations of the nation where it’s carried out.

3)???Must have long term vision: One should not look for immediate result from any philanthropic activity. A company must be willing to have a long term vision, and must invest in the initiative for a substantial period of time to fetch any positive result and must be a committed to the cause/activity. Many times, we see companies supporting any cause, but then soon they pull back their support as they don’t see any benefits on short-term. It is very important for the management to be patient with their initiative, as mostly any philanthropic initiative takes time in bringing back the desired result. Having a long term vision also helps or prepares company to sail through tough times (recession or economic uncertainty), as they approach such initiative with proper planning, set-up and back-up plan.

4)???Involve top management: Since any idea requires long-standing support, hence approval and back-up of top management is required for its continuity. It is also important from the perspective of raising financial and non-financial support and to transform a firm’s culture. Also to make sure that every employee within the organization is aligned to the cause/initiative, the top management support plays a key role, since everyone is ready or willing to support the cause to the best of their potential.

5)???Encourage employee’s involvement: Although the employees must be voluntarily ready to share their knowledge and talent, but still company’s must encourage and reward employees for volunteering time and talent to support the initiative. Eventually such company’s score high on employee satisfaction rating and are admired by everyone (from within and outside of the company) hence leading to low attrition rates.

6)???Must create synergies: A company must be ready to create synergy with other partner without losing focus on the initiative’s main objective, consistency and integrity. As synergy can create greater efficiencies or scale which is very critical for any philanthropic activity. Also with synergy comes expertise, as company’s can leverage each other’s core competencies, which can help with successful execution of the activity.

7)???Measure initiative progress: It is critical to evaluate the progress of any initiative at regular interval, as without any measurement tool, it’s not possible to assess the success or failure of the initiative. It is also important from the ROI measurement perspective, as otherwise it can create a distraction, especially from top management’s point of view, as they might not be willing to pursue it further if no progress can be reported on time. ?Hence it is very important at the beginning to set such objectives, which are measurable/quantifiable, and one needs to keep evaluating the progress on a timely basis as it helps in spotting weakness (what & where to improve) and lets you focus on strengths.

8)???Cultivate global communities: While execution, companies must go beyond the local requirement. This means company must have set the standard for their actions to avoid any discrepancy.

9)???Align each stakeholder’s incentives: Each stakeholder (society, partner, investor, customer, and employee) is important in its own right, and each is also linked to others. ?Alignment of incentives across stakeholders reduces the risk and ensures high quality and effective execution. Each of these relationships must be managed in a way that – two-way flow of value exists and interest of all parties is aligned.

10) Be consistent: Last, but probably the most important principle is to have consistency when it comes to philanthropy initiatives. Generally, most of the organizations participate heavily in such activities, when they are making huge profits and cut down on their investments during tough economic times. However, the key is to be consistent with your actions, as then all the stakeholders involve within the process will find your actions genuine and authentic.?Being consistent adds credibility to your actions, and every stakeholder will appreciate the efforts and will see more value in it, if it’s done/executed in a steadier manner.