What is Strategic Philanthropy and how did it evolve?
In the Strategic Philanthropy Chapter of The SAGE Encyclopedia of Business Ethics and Society published in 2018, strategic philanthropy is defined as a method of designing corporate or business giving and other philanthropic endeavours of a firm so that they best fit with the firm’s overall mission, goals and values. Meaning, that the company has a well-defined strategy and understands how to put that plan into practice through its philanthropic endeavours.
It is a one-of-a-kind and effective strategy to align a company’s marketing aims with the desire to improve humanity’s well-being.
Strategic philanthropy has two more prevalent names; cause-related marketing and community partnering. But regardless of what you call it, it is a positioning that connects a company with a not-for-profit organization or cause.
The above-mentioned study explained how traditional modes of commercial giving have spawned the concept of strategic philanthropy. Initially, corporate giving was more focused on community concerns, and philanthropy was more selfless in nature, focusing solely on the needs of others.
With the increased competition and cost pressures that have characterised the business climate in recent decades, corporate executives have begun to consider the potential impact of charitable activities on their businesses. It became clear that a business involved in philanthropy may not only benefit others but also help itself, and this seed of thinking has given rise to the present emphasis on strategic philanthropy.
Corporate giving has become more institutionalised and professionalised, and, as it has been delegated to professional managers, top management has come to see the giving function as one that should provide more specific, direct and tangible benefits to the company. Thus, the concept of strategic philanthropy has been born and cultivated in a business climate that is more focused on profitability and accountability to the financial bottom line.
The focus of strategic philanthropy is narrower. It centres on needs or issues that are consistent or linked with the firm’s overall goal, objectives, programs or products/services, rather than just any valid need in the community.
Benefits of Strategic Philanthropy
From product development to advertising to employee retention initiatives, it’s the innovative, creative solutions that succeed for small firms and enterprises with limited resources. And it’s the same for business giving. To get the most out of your philanthropic efforts, align your charitable giving with your corporate vision.
According to a survey of 420 consumers in the U.S. made by Clutch earlier this year on how corporate social responsibility influences buying decisions, it was found that people believe it is critical for firms to display social responsibility and take positions on current social movements.
When all other factors are equal, consumers prefer to buy from a company that supports a worthy cause. With the assistance of a professional or a philanthropic strategist, it’s straightforward to turn your philanthropic actions into a win-win situation for your community, employees, and enterprises.
Some of the advantages of philanthropic strategy: Exposure, lead creation, employee retention, and improved performance and productivity. Equally important, they may even have financial advantages for you.
Business for Social Responsibility, a nonprofit association of corporations and executives who promote the idea of combining business’ social responsibility with its economic objectives, is at the forefront of advocating strategic philanthropy.
BSR suggests that firms may make a difference in the world through their philanthropic giving which includes strengthening brand image and increasing client loyalty, boosting employee morale and productivity, improving the company’s image and increasing its presence in emerging markets.
In conclusion, effectively managed charitable programs can provide distinct business benefits that boost corporations’ bottom lines.
How do you develop a Strategic Corporate Philanthropy?
Philanthropy is widely recognized as an important part of corporate citizenship and overall business strategy by successful organizations. Corporate charity is typically haphazard and unorganized, it must be strategic to be truly effective.
Here are some tips on how to develop strategic corporate philanthropy:
1. Think and start small
Look into local groups where tiny donations and limited resources can make a significant difference. Support a new project or a non-profit organisation. You’ll raise awareness for a lesser-known cause and discover directly how your efforts help.
2. Choose an organization in your subject of interest
Your donations should be a natural outgrowth of your company. Consider how you may make your products, services, and areas of expertise more valuable. Then partner with an organization that is complementary to your offering.
If you choose something that you are confident in, you will have a better chance of succeeding. As a result, it will be simpler for you to assist the organization in obtaining the funding it requires.
3. Set a good example
Setting up a donation program shows your employees that your organisation is more than just about making money. It demonstrates your willingness to invest in the community in which they live, which may encourage them to get involved.
4. Form a collaboration
Your cooperation with nonprofit groups should be on an equal footing. In many circumstances, forming a partnership with you will help the organisation more than receiving a one-time cash donation. And you’ll probably find that participating in social change as well as funding it is more satisfying.
5. Raise awareness
Since most NGOs have minimal public relations resources, take the effort to publicize your charity endeavours. Put a little PR about your cooperation on your website or other platforms and pitch the story as a community-interest item.
Corporate philanthropy must be more than random acts of goodwill in today’s highly competitive world. It must be recognised as a crucial component of corporate performance, assisting businesses in achieving the highly coveted triple-bottom-line of people, planet and profit.
To be bold is to add value
At Bolder, we believe that our core values lead us to provide excellence to our clients, to offer the best conditions for our professionals to grow, and to take our corporate responsibility by applying business ethics and global & local community issues. Therefore, we connect, we care and we challenge because we like to commit to our ultimate goal: to add value to business and society in a bolder way.
We implement philanthropic strategies that are integrated into our client’s overall portfolio and wealth-management plan. Working closely with the client’s tax and legal advisors, Bolder manages efficient charitable vehicles such as private foundations, charitable trusts, and donor-advised funds.
Interested? Get in touch with our team today.