Does It Matter What Motivates Business Philanthropy?

Whenever a business gives back, everybody wins.

When businesses share with nonprofits or volunteer their time, I often hear grumblings from other business leaders for the reason that community. It’s usually comments like:

  • “X company is supporting Y initiative because there’s something in it for them.”
  • “Oh, they are simply giving money compared to that nonprofit since it makes them look good.”
  • “They’re just trying to cover up the fact that the business includes a bad reputation.”

Do businesses surrender because they care, or since it helps their business grow? And if the answer may be the latter, should it matter?

Passion Drives You to achieve success; ALLOW IT Also Drive You to provide Back

Let’s say a company participates in a beach cleanup for selfish reasons — to allow them to look good on social media. The beach still got cleaned, right? Their not-so-noble reason behind action still helped the surroundings. Should that business not perform deeds like these because their motive isn’t entirely altruistic?

If a business owner or CEO really wants to give money to a nonprofit to improve their name recognition or gain positive exposure, I say, so be it. Giving back is a wonderful way to garner media attention. CEOs are running for-profit companies with defined objectives. It really is simply good business to get as much value possible from charitable acts. If giving back leads to positive exposure, which drives revenue, that company could have even more methods to contribute to charitable causes continue.

Dan Price, CEO of Gravity Payments, cut his own pay to energize his staff with a $70,000 minimum salary for each employee. Some thought it had been a selfless endeavor that spoke to the broader problem of a national minimum wage increase. Others thought it had been a stunt to get exposure for his company.

There’s without doubt it result in a barrage of interviews and media coverage, so much so the company probably saved money on advertising costs. The publicity also helped Price land new customers and attract new hires. But Price’s good deed shouldn’t be tarnished because people speculate about his motives. Companies don’t should be martyrs. It really is okay — or even better, smart — to provide back in techniques drive business objectives.

Companies donated $18.5 billion to charity in 2016, according to Giving USA. Companies undertake philanthropic causes to greatly help their public image, that may, subsequently, improve profitability. Academic research implies that corporate social responsibility (CSR) campaigns have a considerably positive influence on public opinion and improve people’s perception of a company’s image, reputation and credibility.

CSR may also help attract and retain top talent and make a positive impression with clients and prospects. Over fifty percent of online consumers all over the world are prepared to pay more for services and products from companies that are socially and environmentally responsible, according to a 2014 Nielsen survey.

Consumers view CSR positively. It really is other businesses which can be cynical, perhaps because they’re envious their own good deeds aren’t being recognized.


But there are exceptions. Sometimes companies use philanthropy to hide controversies or distract from negative press. It really is comparable to throwing money at a problem and it reeks of hypocrisy. Instead of addressing a concern at once, businesses volunteer their time or donate money as a kind of damage control, usually at the request of their attorneys.

I’ve seen instances where executives are accused of sexual misconduct and soon after news breaks the business, like clockwork, begins donating to charity and perhaps even start philanthropic foundations. They bombard LinkedIn with news about its philanthropic endeavors. The executives never address the allegations, but instead try to sweep them beneath the rug by distracting people who have numerous types of philanthropy. This is simply not ok.

That’s not to state charity can’t participate a company’s publicity plan in the wake of a scandal. Think about how Starbucks handled its recent racial profiling debacle. Outgoing Chairman Howard Schultz acknowledged the wrongdoing and went as far as to close all Starbucks locations for trainings. It really is among the largest corporate responses ever to a concern such as this, and Schultz says it really is “only a beginning.”

When companies hate on businesses for giving back, it often originates from a location of jealousy. Entrepreneurs are altogether bad at publicizing their CSR initiatives. They could wonder why a particular CEO is making headlines while their own good deeds go unnoticed. Nevertheless, you can’t sit around and await you to definitely discover your passion for a cause. Typically, businesses get attention for his or her charity work because they publicize their efforts. Here’s how:

  1. Select a cause that matters for you and aligns together with your brand image. Avoid charitable giving that may be interpreted as hypocritical. In case you are donating to environmental causes, be certain your own office recycles.
  2. Think beyond monetary donations. Consider involving all of your office in a volunteer opportunity. Your employees will welcome the opportunity.
  3. When you do try charitable causes, take pictures and videos (assuming it really is okay with the business you are collaborating with). Share them on your own social media networks and consider including a section for philanthropy on your own website. CSR matters to potential new hires — and even to customers.
  4. Consider writing a news release about your good deeds. Remember, it really is free press for the reason you are supporting, too, that could result in more donations.
  5. Keep an eye on any tax benefits linked to your charitable giving. Make the most of them! Giving back and ensuring your company’s own profitability isn’t an either/or.

His Parents Loaned Him $30,000 to start out a Company. Now It’s Valued at $1.7 Billion.

The next time you read a headline in regards to a company’s good deeds, don’t roll your eyes. Follow suit! Whenever a business gives back,

Leave a comment