Greed is No Longer Good: The Rise of Corporate Philanthropy

Corporate philanthropy (CP) has come a long way in recent years.

And when it is done properly, CP benefits not only the businesses and staff involved but also the community and specific organisations being helped.

CP can range from company donations to employees volunteering their time for a cause.

And it is growing, with a recent survey by the US Committee Encouraging Corporate Philanthropy (CECP), finding 77 per cent of CEOs rated “embedding social engagement into business strategy and organisational structure” as the most important action they could initiate for society.

As US leadership expert Shelley Frost explains in a recent Chron.com article, corporate philanthropy results in “a cleaner community, more opportunities for residents, and a boost to the local economy”.

Another advantage, asserts Frost, is organisations involved also experience a noticeable boost in staff morale.

This is because the idea of ‘giving something back’, i.e. working together on charitable or team-building projects, is a great way to bring employees closer together.

And it also helps to positively raise the organisation’s profile in the community.

In these days of equality and a ‘level playing field’ for all, the philanthropic ideal is also very attractive to potential employees.

Indeed, it is likely to appeal directly to those individuals who currently volunteer or already do work with charities and other philanthropic organisations.

Having a philanthropic image adds substantial kudos to an organisation which can in turn encourage customers to choose your business over the competition.

Of course, maintaining a positive company image is not the sole aim of philanthropy!

To be successful, however, philanthropic efforts must be done primarily for the benefit of the recipients and not to drive more business to your company.

I am sure if people thought an organisation was only doing philanthropic work for ‘self-serving’ reasons, they would most certainly not support them.

As a consequence , sincerity is important for philanthropy, and there are many well-known examples of such benefactors.

Those champions of philanthropy Bill and Melinda Gates have given billions of dollars to charity over the years.

And of course here in WA, one of our most famous benefactors is Andrew ‘Twiggy’ Forrest of the Fortescue Metals Group.

Fortunately, as this new generation of philanthropic entrepreneurs ‘does its bit’, they also help spur on other corporations in Australia to create genuine social change.

According to social issues expert Madhuraa Prakash, writing for Inside Enterprise magazine, the rise in corporate philanthropy in Australia is currently being led by an increase in ‘impact investing’.

This is where organisations not only donate funds; but also use their massive capabilities and connections to directly benefit causes.  

Companies like Qantas, Coca Cola Amatil and McDonalds, for example, recently pushed for positive social change by becoming signatories and partners in the same sex marriage debate.

Prakash says this new type of philanthropy helps ensure actual change, and promotes corporations to do more than just the bare minimum to contribute to broader society.

The impact-investing sector is also growing rapidly, and according to Impact Investing Australia will be worth an estimated $33 billion by 2020.

As new technology allows for ever-easier communication between individuals, corporations and foundations, the strength of this sector is only likely to grow.