What Drives Corporate Social Responsibility, Corporate Philanthropy?
They support causes such as feeding the homeless, disaster relief, protecting the environment, and much more besides. They are under no obligation to do so, and profit margins are affected, so why do so many businesses willingly embrace corporate giving and corporate social responsibility?
Why Businesses Support Worthy Causes and Behave Responsibly
Those of you who regularly read Rob O’Byrne’s blogs will know he believes that “giving feeds the soul”. His thinking is as follows:
- There are a lot of people out there in need, and often, it’s through no fault of their own.
- A little can go a long way towards helping them.
- Giving rewards the giver, just as much as the receiver.
“It is for this reason that Rob’s influential Logistics Bureau group of companies, has, like many other businesses around the world, signed on to B1G1 (Buy1Give1). Under this scheme, Logistics Bureau gives a proportion of its revenue to a worthy cause each time it transacts with a client.”
To date, Rob’s B1G1 giving initiative has notched up more than six million “giving impacts” and has, among hundreds of other worldwide projects it is involved in, achieved the following:
- Brought fresh water to communities in Malawi, Ethiopia, Cambodia, and to scores of other communities affected by water-borne diseases
- Provided blankets for winter protection in Moldova, Belarus, and Ukraine
- Given medical support to children in Vietnam, Moldova, Ukraine
- Provided support for subsistence farmers in Cambodia, Malawi, Kenya, and in dozens of other rural communities
- Helped provide education to thousands of children and adults around the world, including in Thailand, Cambodia, Vietnam, India, Ukraine, Kenya, Malawi, and New Zealand.
The ‘Matching Gift’ Model of Corporate Giving
Rob’s B1G1 giving model differs from those used by many large corporations, although the ultimate goal—making a real difference in the world—is the same.
A popular choice of multinationals is the ‘matching gift’ system, under which staff is encouraged to make donations to non-profit groups, which are then matched dollar-for-dollar by the company. Employees can also engage in voluntary work with a non-profit, which will receive a cash grant from the company once a specified number of volunteer hours are notched up.
ExxonMobil: Matches donations by employees to arts and cultural organisations, as well as to higher education, at a ratio of 1:1. After an employee volunteers 20 hours at a non-profit, ExxonMobil provides a volunteer grant of $500 to the organisation.
Johnson & Johnson: Matches donations by employees to arts and cultural organisations, to civic and community organisations, and to health and human services at a ratio of 2:1.
Microsoft: Matches donations by employees to educational institutions, arts and culture organisations, to health services, and to environmental groups at a ratio of 1:1. Pays a grant of $25 to a non-profit for every volunteer hour notched up by an employee.
Google: Matches donations by employees to educational institutions, arts and culture organisations, to health services, and to environmental groups at a ratio of 1:1. Matches donations by employees to disaster relief/international relief at a ratio of 1:1. Matches funds employees personally raise for a charitable event in which they actively take part, such as a marathon, bike ride, or walk. Pays a grant of $10 to a non-profit for every volunteer hour notched up by an employee.
Apple: Matches donations by employees to educational institutions, arts and culture organisations, to health services, and to environmental groups at a ratio of 1:1. Pays a grant of $25 to a non-profit for every volunteer hour notched up by an employee.
Why do Companies Embrace Corporate Philanthropy?
The short answer is that they CAN and that they WANT TO.
But there are other reasons as well, which go beyond pure altruism:
- It Benefits Employees. Companies who stress the importance of volunteering and donating invariably notice a boost in the morale of employees, especially if they work as a team on a volunteer or charity project.
- It Benefits the Community. When companies offer financial support or grants, non-profit organisations are able to launch programmes that would otherwise go unfunded. This creates a trickle-down effect and ultimately strengthens the community as a whole.
- It Benefits the Company: Customers view philanthropic businesses positively because they are seen to be supporting the local community. One big proviso here, however: The philanthropic efforts must be of genuine benefit to the community, not merely an attempt to drive up sales.
- It Helps Attract Bright, Optimistic Workers. Companies seen to be committed to corporate giving and volunteerism usually attract workers already engaged in such activities, who generally have a positive outlook on life, and who are good team players.
What is Corporate Social Responsibility and How Does it Differ From Corporate Giving?
The terms have become interchangeable as both involve delivering corporate resources to the local—or international—community.
But unlike philanthropy, where the corporation’s involvement mainly concerns money donations, CSR involves a hands-on approach to solving environmental and social issues arising from the company’s business practices.
Example 1: A Large Supermarket
The corporate social responsibility in this example would begin at the planning stage. Where will the enterprise be sited? Will large delivery vehicles be able to access the site without causing traffic congestion? Will there be enough parking for customers? Other considerations would be, for example, how to reduce plastic packaging, where to dispose of waste, and how to reduce carbon emissions.
Example 2: A Food Processing Plant
The key challenge facing food processing plants is how to deal with wastewater, which is a major source of environmental pollution. CSR in this instance would focus on proper treatment methods that would ensure negligible contamination of the surrounding area.
Example 3: A Multinational Corporation
Because their supply chains stretch across dozens of countries, and because they have outlets in some areas where business ethics are often neglected, multinationals have an enormous CSR, and they often employ large teams to drive the process.
Responsibilities would include, among others, ensuring that suppliers are paid a fair price for their goods, making unannounced calls at factories to check on working conditions, and taking steps to reduce carbon emissions all along the supply chain.
“No matter what the model, the emphasis is on giving something back to the community and cultivating a culture of caring.”
What if you are not an employee of a large corporation, or your business budget does not allow for large-scale philanthropy, but you would still like to make a difference?
Why not join Rob’s World of Giving. All donations, no matter how small, can make a difference to the life of someone, somewhere in need.