Over the years, I’ve actually heard nonprofit managers and development professionals say:
“[That company] should give more.”
“I can’t believe [that company] is not giving. They certainly can afford to.”
“Corporations should do more to support their local communities.”
“Corporations should give back!”
The last one is my personal favorite because it’s complete nonsense. A corporation exists to produce a product or service and generate a profit for its shareholders. That’s it.
As for “giving back,” corporations do so everyday even if they never donate a dime to charity or sponsor a charity program or event. Corporations meet a public need or desire by producing products or services. They employ people. They buy or rent from other businesses. They pay taxes. Their employees pay taxes and buy or rent things, which further stimulates the economy.
In a previous post, I wrote, “There’s No Such Thing as Corporate Philanthropy!” I explained, “Corporate Philanthropy does not, or at least should not exist. While corporations may give to charitable causes, it is not or should not be out of an altruistic sense of Corporate Social Responsibility.”
If corporations make donations, those grants should enhance shareholder value in some way. A contribution might have a direct impact on profitability or the effect might be indirect. Either way, the donation or sponsorship should strengthen the corporation, say many corporate executives.
Marc Gunther, a senior writer for Fortune Magazine, wrote, “I’m not a big fan of corporate philanthropy. Too often, it’s a feel-good exercise, generating little value for a company’s shareholders. At its worst, it allows CEOs to use other people’s money to glorify themselves.”
As corporate philanthropy, as a term if not a practice, began to fall out of favor, it was replaced with Corporate Social Responsibility. But, what is CSR?