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The New Corporate Philanthropy

The New Corporate Philanthropy. Learning Objectives: The author sees a new direction corporate philanthropy: Tying corporate giving to strategy Providing not only cash, but managerial advice, technology support, employee volunteers

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The New Corporate Philanthropy

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  1. The New Corporate Philanthropy Learning Objectives: The author sees a new direction corporate philanthropy: Tying corporate giving to strategy Providing not only cash, but managerial advice, technology support, employee volunteers Promises to be most effective for US MNCs in emerging markets as foreign companies give less their US counterparts

  2. Evolution of US Corporate Philanthropy • Gifts made by prominent individuals, not companies • Not meant to serve business purposes Bankers ---- arts Industrialists ---- sick children • Most companies gave to United Way type funds • What happened ? • Corporations learned they needed help from not-for-profits (Exxon Valdez oil spill in 1989) • CEOs forced to balance social issues and return to shareholders Prominent donors ?

  3. Guidelines for NewCorporate Philanthropy What should CEOs do ? • Establish foundation and funds endowment • Empower philanthropy czar • Find company’s “natural causes” • Begin dialogue between foundation and business functions • Decentralize philanthropy efforts • Engage stakeholders to identify shared values and synergies • Apply usual management functions (planning, staffing, organizing, controlling) to foundation activities Examples of “natural causes” ?

  4. The AT&T Model Establish Corporate Foundation • Endowed with its own funds • Foundation’s initiatives should advance business interests • Foundation initiatives tied to business functions through alliances with business units (marketing, R&D, HR, etc.) • Goal: to establish “two-way-street” – dynamic relationship between philanthropy and business What’s the difference between this model and the usual corporate lobbying efforts ?

  5. Successes of the AT&T Model • Became leader in discussions of “information superhighway” concept • Unionized workforce pushed for: • Day care and elder care programs • Helped centers get accreditation • Helped train providers • Foundation helped retain the public service aura following industry deregulation • Allows company to compete on price and corporate citizenship, rather than price alone

  6. Putting the New CorporatePhilanthropy to Work • Cause marketing – promotion where part of product’s purchase price donated to charitable cause Examples ? • Policy marketing – lobbying funds mixed with donations to generate grass-roots support for social causesExamples ? Potential issues with either of these approaches ?

  7. Industries and Their Promotionof Social Causes What industries support which causes ? Do these seem tied to business interests ?

  8. US Corporate Philanthropy Abroad Several successful examples : • IBM in Japan: product development team to address hardware and software needs of the handicapped; hiring program for the handicappedResults ? • American Express in Budapest: assistance in building tourism industry in post-communist countryResults ? Do these initiatives advance business interests ? Why are US companies in danger of losing their edge ?

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