Corporate philanthropy: When is giving effective?

Abstract

annual fundraiser or to meet a current crisis situation. In contrast, institutional philanthropy reflects a considered approach that often results in the establishment of a foundation or gifts to an existing foundation; in turn, the foundations provide grants for charitable purposes from the income of the original funding so that the original (and any additional) donations are kept intact. Both of these types of philanthropy, however, make the presumption that donations are always in dollars when, in fact, business entities are looking toward alternatives to the gift of money; items such as volunteer time, goods (in-kind gifts), obsolete or damaged merchandise services, used equipment, meeting space, employee expertise, and sponsorships are making substantial inroads into the philanthropical sphere. Companies are even giving away unused or unusable patents, often to universities, hospitals, and NFPs, and turning "what had been wasting away into multimillion-dollar tax writeoffs" (Feder, 2002 A PROCESS FOR RESPONSIBLE CHOICEResponsible decision making implies the use of an enumerated list of selected criteria to identify and evaluate the alternatives to a decision scenario. When a business makes the choice to engage in philanthropy, it should not be performed checkbook-style, that is, through random acts of giving to whichever charitable organization happens to knock on the door first. Business philanthropy should be viewed as an important undertaking that demands reason, consistent effort, and commitment. Such a process does not mandate the establishment of a philanthropic foundation by a business. It does, however, mandate that a business consciously establish a process (see Exhibit 2) and a set of criteria to allow rational choice. By engaging in selection process, the effect of the business's philanthropic Some Organizational Benefits of Charitable Contributions• Positive (or improved) organizational image to customers, suppliers, employees and potential employees, and community at large • Increased brand awareness and recognition through sponsorships • Possible increased competitive advantage and customer loyalty • Improvement in local community because of organizational volunteerism • Leadership development opportunities for employees • Community goodwill in the event of organizational downturn or crisis • Exposure of employees to diverse ideas, people, and social strata • Potential for building a sense of common purpose among employees • Income tax benefits from monetary and product donations to tax-deductible organizations Exhibit 1 efforts will be magnified through consistent donations to organizations that perform well in pursuing objectives that the business donor believes to be important.First and foremost, to make rationale choices of charitable organizations to support, management must believe that business philanthropy provides benefits to all constituents involved-the business itself as well as the business's stakeholders. Business donors have a responsibility to their shareholders, internal and ...

An exploratory study of wine business philanthropy in the USA

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