Corporate Philanthropy Reflected Beyond the Bottom Line



In the wake of the scandals that rocked the U.S. corporate community in the early part of this decade, corporate social responsibility has moved from catch phrase to cachet, each day becoming more ingrained in the way companies do business. One of the most recognizable ways in which these companies are demonstrating their commitment to community is through philanthropic endeavors.

Businesses both large and small recognize the importance of corporate social responsibility and philanthropy because of the long-term benefits. We can’t overlook the importance of giving back to the community in which a company does business – its home. It is the source of the clients and customers without whom it wouldn’t exist; and it is home to employees, their families and future employees, upon whom its continued success depends.

Have a Heart
Corporate giving helps to humanize a company, gives it heart. In the eyes of the public, it becomes more than just a product or service, but an integral part of the community. As such, the return on investment for a company – in terms of generating goodwill, enhancing brand reputation, building customer loyalty, increasing market share and raising employee morale – can be priceless. 

Brand equity operates like all equity; it can be a security blanket or a safety net in a time of crisis. Like all good relationships, the relationships companies build with consumers can serve as a buffer if they are built solidly enough.
 
Creating brand equity is the most powerful weapon in a company’s arsenal to beat the competition. In the fiercely competitive, global marketplace of today, customer and societal expectations are changing rapidly, requiring constant innovation of new ideas, products and services.

Building Brand Awareness through CSR
For example, when Reebok was about to launch a walking shoe designed especially for women, it partnered with the American Heart Association for a multifaceted campaign to raise awareness and raise money. The “Learn and Live” campaign encouraged women to walk their way to a healthier heart; $5 from each pair of the shoes and a limited edition T-shirt sold was donated to the AHA. The AHA American Heart Walk logo was displayed on all Reebok walking shoe packaging and heart healthy tips were provided on the shoebox tissue paper

This campaign empowered women to take control of their health and well-being; brought attention to heart disease as the biggest killer of women in the United States; motivated women to walk; and generated funds for the AHA.
A company should carefully evaluate the pros and cons of its branding strategy for the right fit and to ensure a balanced view of the components of corporate social responsibility, or cause-related marketing, and implement the philanthropic strategies in accordance with its vision, mission and values.
Additionally:
•    Multinational companies should tailor philanthropic works to the indigenous needs of the different countries in which they operate. While education may be the focus in the United States, it may not be as significant an issue as pollution in China or housing reconstruction in Malaysia.
 
•    Make philanthropy and CSR a guiding principle. To build good will, a company has to make a commitment to social responsibility beyond supporting good causes. Ethical conduct has to be the normal way of doing business.

•    Tell people about the good things a company is doing. In this digital age, media watchdogs are everywhere, from consumer reporters for traditional television and print outlets right down to Joe Consumer and his personal blog. Consumers are better read and more informed than ever before and they do their homework before choosing to do business with or invest in a company. If a company stumbles, the news will be out there for anyone to find. Consider it a proactive approach to showcase a company’s good works, through corporate blogs, Web sites and consumer newsletters.

•    Design a metric to track how a company’s actions are affecting it in the eyes of the consumer. Has it increased overall sales or brand reputation? Have there been increases or declines in certain markets? Among certain demographics of consumers?

It is also increasingly important that companies hold all the branches on the corporate tree – from suppliers and marketers to accountants and attorneys – accountable to the standards to which they hold themselves.

A good example is The Body Shop, founded by Anita Roddick in 1976 out of need, but also to promote causes and her own philosophies, including ending animal testing and supporting the environment. Her activism and her encouragement and support for employees to volunteer, endeared her to consumers. The sale of The Body Shop in the mid-90s to L’Oreal, which does test its products on animals, drew criticism, but didn’t hurt sales because of the strong brand equity built up over the previous decades.

Philanthropic Benefits 
Philanthropy can pay off in a big way for corporations by enhancing brand reputation and brand equity, especially when key stakeholders know its core values are practiced from the boardroom to the mailroom. It creates reservoirs of good will that plays into consumer values and establishes a solid foundation for the company reputation and brand equity, which in turn can lessen the effect of a future crisis.
 
Companies should be responsible for their activities and owe it to the society and environment in which they operate. But it takes more than supporting the most current issue to get mileage. Identifying the right cause, one that is aligned with a company’s core corporate values and common goals, can bring about the best results both internally with employees and also externally with key stakeholders.

This is an excerpt of an article written by Colette A.M. Phillips founder and CEO of Colette Phillips Communications, Inc. It is currently featured in PR News 2008 Guide to Best Practices in Corporate Social Responsibility. To order a copy, visit http://www.prnewsonline.com/store/9.html.




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