Social business, Part 2: Companies build giving into business strategy

By Todd Cohen

Corporate philanthropy has evolved over the last generation from supporting pet causes the CEO cared about and, later, targeting giving to causes generally in sync with the focus of the company’s business, to making strategic use of its philanthropy and other assets to address social or global problems that represent obstacles to its business.

Helping to drive that change has been a combination of forces, experts said, including the growing importance of intangible corporate assets such as customer perception; declining corporate control over a company’s reputation with the emergence of social media; the growing importance of social and environmental issues that need to be addressed; the emergence of “B corporations” that are required by law both to increase shareholder value and to serve community needs; and a growing body of evidence that good corporate citizenship can help improve business.

“There’s an increased realization by companies of the tremendous opportunities of non-cash giving,” said Margaret Coady, executive director of the New York City-based Committee Encouraging Corporate Philanthropy.

“That can be any asset under the company’s stewardship, whether the power of employee volunteers, or the goods and services that the company manufacturers, or the relationships the firm has, perhaps through their supply chain, or even the physical assets of the business, such as a fleet or trucks, or conference facilities, or an in-house printing press,” she explained.

“It makes sense for a company to choose societal issues and focus its philanthropy on causes that have a linkage to its products, services and expertise,” she said.

Internal and external “stakeholders” now expect companies to have “a deep level of engagement,” she said, and are “looking at larger corporations and asking, ‘What are your values and how are those values demonstrated through your philanthropy?'”

Companies have responded, she explained, by looking for “a tie between a social issue and the future of the company,” and asking what role they can play in helping to solve the social problems “because it will be good for the community and good for me, can I reorient my business around this societal issue, recognizing its relevance to my company’s future?”

Next: Philanthropy adds value for companies

The series:

Part 1: Companies team with causes to add value

Part 2: Companies build giving into business strategy

Part 3: Philanthropy adds value for companies

Part 4: Nonprofit builds corporate partnerships from ground up

Part 5: Company works with nonprofit to build markets

Part 6: Companies turn to nonprofits to help develop leaders

Part 7: Nonprofits tap corporate expertise

Part 8: Company teams with nonprofit to solve social problems

Part 9: Nonprofits work with companies to help find business solutions

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