In an increasingly competitive global environment, businesses are challenged with demands for profitability and responsibility. To create value for all stakeholders, corporate leaders meet these demands with integrated strategic philanthropic programs. More and more companies encourage and embrace greater collaboration and cooperation between corporations and communities.
I. The competitive advantage of corporate philanthropy
In this first part, we will demonstrate that usually businesses that choose to employ corporate giving attitude benefit in many different ways from their actions. * First, these businesses could increase their reputation amongst the general public, and also begin to attract new consumers to their business as well.
* Secondly, businesses that choose to help out their communities could increase their employee retention rates significantly as well. Happy employees will increase their productivity levels. * Thirdly, when companies opt to engage in this giving activity their shareholders begin to build a level of confidence in the business.
In addition to customers’ behavior vis-à-vis different philanthropy programs or CSR in general, it was also been proved that philanthropy inside a company increases the employees’ motivation and thus their commitment and productivity
A. Corporate philanthropy boosts employee morale
One of the most important components of corporate philanthropy is to provide avenues/means for employees to be personally involved in a company’s commitment to social responsibility. It is widely understood that supporting local causes is a good way for a business to develop a positive image and reinforce its relationships with customers. In the process, it can also boost morale among employees. * According to experts employees who have a favorable impression of their company’s philanthropic program are four times more likely to be truly loyal employees than those who do not, and are five times more likely to remain with their employer. * They concluded that philanthropy is definitely a factor in how employees evaluate their employers. In all, employees whose companies participate in good corporate social responsibility and philanthropy reported feelings of pride in their workplace, a sense of belonging as part of a family, and admiration for the good deeds their company accomplished.
* Corporate philanthropy programs also present many opportunities for team building that would not normally occur during a typical day in the office. Employees are able to partner together and work in team environments outside of their direct work groups. People from different departments or offices, who typically wouldn’t see each other during a workday, can serve a meal, volunteer in a classroom or help build a home, side-by-side. This promotes a greater sense of camaraderie. Concretely, to encourage employees participation in corporate philanthropy, experts advices businesses to implement some practices: – Involve employees in community outreach decisions: many companies create committees to make decisions about contributions or company volunteer activities; – Start a matching gifts program: this allows your company to add to employees’ donations designated for nonprofit organizations. It can encourage charitable giving while showing appreciation for employees.
– Encourage volunteerism. Many people want to volunteer, but can’t find time in their lives to do it. Participating in employer-sponsored programs allows employees the opportunity to volunteer.. Some businesses provide paid time off for employees to devote time to a nonprofit, while others structure an annual company-sponsored employee volunteer day or series of ongoing events.
B. Corporate philanthropy builds shareholder value
According to the Harvard Business case on coporate philanthrophy, Professor Friedman said that business executives who speak of the social responsibilities of corporations are “preaching pure and unadulterated socialism.” He claimed that corporate executives must have only one objective- to make money as much money as possible-and that spending corporate funds to promote social goals detracts from the bottom line. However, according to William C. Steere, Jr, Chairman of the Board Emeritus Pfizer Inc, corporate philanthropy also enhances shareholder value. Pfizer, Inc. is an American multinational pharmaceutical corporation headquartered in New York City. It is the world’s largest pharmaceutical company by revenues. Pfizer develops and produces medicines and vaccines.