Corporate philanthropy is the act of giving back to society, either in surrounding communities or further afield. It may take the form of donating money for specific projects, supporting feeding schemes, or providing other resources to underprivileged communities. On a larger scale, corporations may be instrumental in creating charitable foundations or getting involved in global matters such as environmental issues or food aid to war-torn countries.
Philanthropy is important for the uplifting of communities, and at the same time, it helps to strengthen the company’s presence in the area and enhances brand awareness. However, while charitable actions such as feeding and clothing people are essential activities in many situations, they are not sustainable in the long term, as the recipients become dependent on such aid and the problems are exacerbated. People need to be taught the necessary skills to support themselves.
Philanthropy is about larger undertakings, such as providing support to communities – helping them to produce their own food, educating them, or developing training facilities and community centers with access to medical care.
However, unless managed correctly, philanthropic initiatives may be short-lived. It’s important for organizations with a philanthropic ethos to ensure continuity of their endeavors by preventing mismanagement of their charitable activities or misappropriation of funds.
A structured approach
The act of formalizing the company’s philanthropic intentions as part of its mission statement helps to ensure the continuance of philanthropic activities in the future.
Success in the company’s philanthropic endeavors is also more likely if the same business practices are adopted for managing this alternate area of the business.
In the management of the company’s philanthropic activities, the implementation of sound governance practices and long-term business strategies should stabilize the processes. This, coupled with regular analysis of performance metrics, will ensure ongoing sustainability.
Applying corporate governance principles
While it’s true that philanthropy is not a profit-making cost center, this does not mean that the management of these activities is less important. When funds are being appropriated for charitable purposes, there is often a risk of emotional spending, bad management, or even misappropriation of funds.
By involving stakeholders and adopting corporate governance and fiduciary principles, companies can introduce transparency, fairness and accountability into the philanthropic process, thus alleviating the risks.
Corporate governance principles promote stability and trust – important attributes in the philanthropic environment.
Implementing business metrics
Business leaders have the expertise and resources to implement metrics that will monitor processes in areas such as finance management, resource application, and the overall impact on the community or society as a whole.
Collaboration with other parties
Larger philanthropic projects often require collaboration with community leaders, local municipalities, government departments and non-profit organizations. Collaborations with various stakeholders help to build relationships and strengthen the impact of the projects.
Organizations with a vested interest may also provide additional funding or resources for the projects.
Ethical philanthropy
It’s important that the philanthropic endeavors of companies are seen as genuine benevolence rather than tax-saving efforts. Company leaders with a passion for philanthropic ventures can help to nurture similar feelings of empathy and integrity among their staff, and this, in turn, projects a good image for the company.
Strong leaders can also be instrumental in igniting passion within communities, nurturing their entrepreneurial and creative skills and encouraging innovation and responsibility.
In regard to philanthropic leaders, an individual worthy of mention is Ehsan Bayat, a prominent entrepreneur and philanthropist whose family was forced to flee their home country of Afghanistan. Ehsan was a young boy at the time, but after establishing a thriving business in the US, he returned to Afghanistan to help rebuild the country, establishing a nationwide mobile phone company and, later, a private TV and radio network, and an independent power producer.
In addition to providing infrastructure and employment for millions of people, Ehsan and his wife have made vast improvements in the lives of the people of Afghanistan with the establishment of a philanthropic foundation that provides widespread medical services and education.
Philanthropy affects us all
The benefits of philanthropic efforts are far-reaching, not only for the recipients but also for the providers. Caring for other people enhances our mental wellbeing and, usually, our problems pale into insignificance when we observe the trials of others less fortunate.
From a corporate perspective, many companies feel duty-bound to give back to their community. Others feel the need to support environmental issues, particularly when they are part of the problem. Regardless of the reasons, philanthropy is essential for building stronger communities and enhancing the lives of many, many people who would be destitute without it.
Consider what this world would be like without the dedicated people who go out of their way to make it a better place.
