Reaping Biz Benefits of Philanthropy Programs

Generosity comes easily when business is booming and optimism is running high. But when companies experience economic setbacks, corporate giving programs may face increased scrutiny from internal stakeholders who are looking for places to cut costs or at least have more justification for the investment.

As unfortunate as that mind-set is, PR professionals must remain realistic about varying viewpoints on the value of corporate philanthropy in their organization. Giving is one of the fundamental elements of a sound CSR program. But not everyone has a clear understanding of the incredible value of these programs. Let’s face it: There are those who would argue a dollar earmarked for a charitable cause would be better spent upgrading equipment, expanding technology or simply not being spent at all.
Fortunately, there is strong support at the highest ranks throughout the business community for philanthropy as a critical component of an organization’s long-term business strategy. This commitment appears to be unwavering even during the current economic slowdown, and in fact philanthropy appears to have growing support for its business benefits.

At the conclusion of this year’s “Board of Boards CEO conference,” organized by the Committee Encouraging Corporate Philanthropy, CEO participants shared their perspectives on economic issues and the relationship between corporate philanthropy and business strategy. Some key findings:

•    64% believe equal weight should be given to both the business benefits as well as the social impact of corporate philanthropy;

•    89% of CEOs believe companies should have mechanisms in place (e.g. cash reserves or endowed foundations) to sustain contributions during periods of weak financial performance; and,

•    100% believe corporate philanthropy is important to creating long-term shareholder value.

While it is comforting to know the philosophical approach to philanthropy is not generally tied to the ups and downs of the business cycle, perhaps more notable is the view of corporate philanthropy as a strategic business tool. According to a January 2007 McKinsey global survey of more than 500 CEOs or other C-level executives, in addition to impacting social goals, nearly 90% of respondents also seek business benefits from their philanthropy endeavors. It goes without saying that corporate philanthropy is a long-term proposition that should benefit the greater good, but companies needn’t believe they can’t benefit as well. In addition to creating a healthier society, corporate philanthropy can provide direct benefits to the company as well.

Particularly during difficult times, PR execs should anticipate some level of internal push-back about philanthropic initiatives and be prepared to demonstrate ROI to the company from a well designed strategic giving program. Establishing meaningful metrics and evaluation processes will ensure plenty of data is there to support the program’s effectiveness on an ongoing basis. There are seven principles for corporate giving that bring the rigor of business to the passion of philanthropy and help answer the inevitable questions: “Why should we give, and what should we get in return?”

Ultimately, a well-designed corporate giving program meets important societal needs, but it can also generate meaningful returns to the organization and give it a true competitive advantage. Public relations professionals need to be ready to champion the business benefits of a strategic giving program internally whenever the opportunity arises to help ensure philanthropy budgets remain secure and, more importantly, that corporate giving can be seen as the powerful catalyst for organizational improvement it was meant to be.

Elise Mitchell is CEO of Mitchell Communications Group and a member of the PRSA/Counselors Academy. She can be reached at