Corporate giving

Corporate giving can create some tricky situations if you are a public company. Some shareholders feel that this money should go to them, not to charities and it is up to the individual shareholder to give money if he/she chooses, but not the company.

These days, there is what's called strategic philanthropy. Strategic philanthropy can be implemented in various ways, but for corporations it could mean aligning your donations with some of your corporate strategies. For example, let's say you wanted to tap into the Asian market. Then you could find out what issues the Asian market has for that time in that area and see if you can find a charity to help resolve the issue. You fund the charity. The charity develops and implements the project with your name on the information and the Asian market benefits. The hope is that this new consumer thinks of your company when they want to buy a particular product. Of course, this assumes the corporation has done all the right research on the issues, the charity, and the materials/tools that were used. If any one of those areas are performed poorly, then the overall win- win to everyone is heavily compromised.

I have seen corporations donate thousands of dollars to causes without doing any research. The result is that the corporations haven't found the right issue and all the materials aren't used or the corporation may also give to a worthy cause, but so have many others so there is a lot of clutter and too much money in one cause. No one corporation stands out. Although, this is not a marketing expense, there needs to be some mention of the corporation's name in a way that makes the corporation stand out from others. On top of that, charities need to show effectiveness and effciency so that shareholders can see that corporate dollars were accounted for both financially and in client performance.

Corporate giving is no longer about just giving to the community through various charities and then receiving a tax receipt. Corporations need to look at charitable giving as a way to align their giving with their other departments to receive some benefit. If not, then corporations will cut the donations in hard times. It has taken a long time for marketing executives to persuade most businesses not to cut their advertising budgets during hard times. They could only do this because they were able to show a strong business case as to why they should keep advertising. Corporate shareholders must also see this strong case to justify why money should go to charities instead of going to them or back into the operations.
Something to think about...

Labels: corporate giving, donations, strategic philanthropy

posted by Brenda Northey @ 4:53 AM