Corporate Philanthropy Essay Example for Free

Corporate Philanthropy Essay It is easy to estimate what corporate America is pulling in by simply looking at the amount of money they spend on advertising and celebrity endorsements. The evidence of increased affluence can also be seen in the kind of lifestyle exemplified by the CEOs of said companies. In this era of billion dollar industries the question has to be asked on the necessity or the responsibility of for-profit organizations to engage in and support philanthropy? An initial reaction would be the affirmative as there is almost no negative consequence to the idea of receiving a gift. But then again there is no such thing as a free lunch so to speak. This study will attempt to get a basic understanding of corporate philanthropy and what it means to the donor and to the receiver as well. Spirit of Giving Even before tax deductible corporate charitable contributions became part of business strategy, there were already businessmen and organizations imbued with the spirit of giving. In the early year of the twentieth century Milton S. Hershey, a deeply religious man belonging to the Mennonite sect took great pains in order to bless others as he was blessed and this was explained by Andrew Savitz: Hershey [†¦] wanted his wealth to be used ‘for a purpose of enduring good’, [†¦] Through his Hershey Improvement Company, he founded most of its leading institutions, including local bank, department store, zoo, and public gardens modeled on those at the French Versailles [†¦] He even founded a community college that local residents and company employees could attend free of charge (2006, p. 5-6). When the Great Depression ravaged corporate America in the 1930s this same spirit of giving has alleviate the suffering of many people. After this time the Federal government has seen the potential of corporate giving in helping the government during times of crisis and even in providing assistance for economic growth. The government then made decisive steps to harness this potential. Wilkinson et al. , described the rationale, â€Å"1n 1935, during the height of the Great Depression, corporate giving to private charity was welcomed as a means to reduce the taxation that would otherwise be required by local communities shouldering the burden of caring for unemployables† (2006, section 1-4). Thus, in a way the spirit of giving was regulated and before while the gift was given freely without any prodding, now those who gave are rewarded with incentives such as the â€Å"tax deductible contributions† that many are familiar today. Social Responsibility In times of crisis it is understandable why the help of businesses are required to help prevent an economic collapse or a major breakdown in the social system of this country but what about in the times of peace and less turbulent times; where can corporate philanthropy come in? Louis Boone, writing about the realities of 21st century businesses asserted that corporate success is not only about dollars and cents but by abiding with an unwritten code of corporate ethics which includes contributing to increase the well being of society (2006, p. 51). The author adds that philanthropy is one of the ways which a corporation fulfills its social responsibilities (Boone, p. 51). Impact of Generosity Robin Pogrebin in his New York Times article illustrated the ability of for-profit organizations to help create awareness for the arts, â€Å"The Brooklyn Academy of Music recently closed a $200,000 deal with Visa’s signature card to sponsor its coming production of the dance-theater piece ‘Edward Scissorhands’†¦Ã¢â‚¬  (2007, par. 21). In the same article Pogrebin clarifies the significance of such donations to places like museums and cultural groups. In a succinct way he was able to show that dance and theater groups could never compete with NASCAR or the NBA for example in terms of reach which makes Visa’s contribution more meaningful. Another good example would be the philanthropic activity of Krispy Kreme that allow them to donate to Foster Friends – a charity that works with foster children with special needs. According to one of their executives, â€Å"We want our company to establish deep roots in the community† (Boone, p. 152). Sometimes one can only appreciate things when it is already gone. This is what happened to a historical site in Sussex County, New Jersey when funds dried up and the foundation managing the 19th century site that featured a 19th century town and a Lenape Indian Village (Hughes, 2007, par. 1-5). In the same way the benefits of corporate philanthropy can only be appreciated when the donations have stopped. In the case of Sussex County school children would be denied the education and joy derived from visiting historic sites such as this one. Bottomline Not all agree to the positive impact of corporate giving. When receiving gifts from corporate sponsors one could almost feel the strings attached the moment free money is being handed out. A realistic view of the world should automatically alert beneficiaries of donations to the fact that something must be given in return. But it must also be understood that corporations does not necessarily demand for the soul of the fundraiser and is only interested with a partnership that would work both ways. There is no need to be paranoid and say, â€Å"†¦if companies have a say in some decisions, might they eventually demand it in others? † (Pogrebin, par. 12). Ms. Perkins, a fund raising consultant asserts that corporations are less interested in â€Å"dictating programming than in exploiting it† (as cited in Pogrebin, par. 13). This makes a lot of sense since no CEO or corporate staff for that matter will have the time and energy to spare in tinkering with something they have no proficiency in like say tap dancing. Mr. Will Maitland Weiss, executive director of the Arts and Business Council of New York agrees with this assessment and he said, â€Å"The challenge isn’t that evil Mr. Businessman is trying to trick you into doing something you don’t want to do. The challenge for an arts group is to go into a meeting thinking strategically: We want to reach this audience, you want to reach this market, and we’ll both win† (as cited in Pogrebin, par 14). An example of the dynamics described by Weiss can be seen in the partnership between Time Warner and City Center’s Fall for Dance program which the media giant has sponsored for the past three years. The mutual relationship produced exposure for Time Warner and the six figure gift from the conglomerate was translated into 160, 000 festivals brochures, 400 subway posters and 5,500 bus advertisements (Pogrebin, par. ). If the cultural center tried to carry all the promotional and operational expense all by itself there is no way the production could have taken off the ground. Conclusion In the final analysis there is no significant objection to the idea that for-profit organizations should indeed participate and engage themselves in charitable causes and other philanthropic activities. The reasons for supporting such an activity are numerous. It starts with the fact that these organizations are earning millions of dollars. It is just proper for them to give back to the community or to the people that patronized their product, service or whatever it may be they are selling. The second major reason is the positive impact of giving, which has resulted in helping others reach their full potential. In the examples given previously one can see the numerous social problems that were solved because of corporate giving. There is even a deeper reason for the need to give. As pointed out by Boone, a lot of businessmen believe that it is ethical to give back to the community. And that many CEOs and entrepreneurs view themselves as failures if they only focus on the dollars and cents instead of making their world a better place. Third reason for an affirmative answer to the query on corporate giving is its ability to jumpstart projects that may not be as important as feeding the poor but is equally significant in feeding the soul. Examples were given of arts and culture groups that could not compete with sports and would have no chance of staging production without the aid of corporate sponsors. The objection to corporate philanthropy is baseless and could not hold water when stacked up against the benefits of generosity. Obviously, foundations and charitable institutions are never at a loss for programs and activities that will efficiently spend money given by for-profit organizations. Moreover, the examples given earlier has proven that corporate giving has evolved into a highly sophisticated system of partnership between donor and beneficiary that illustrates the paradox of making profit while giving away money. This is only possible in the world of corporate giving.