There is a rising trend in business that incorporates philanthropy into business strategy. Businesses are aspiring to make a social and environmental impact on their world. Instead of revelling in a consumer-driven atmosphere, and vying for the biggest piece of the consumer pie, businesses are creating wealth (both social and financial) for themselves by supporting others. Charles H. Moore, Executive Director of the Committee Encouraging Corporate Philanthropy, explains that the definition of shareholder has changed to include “government, employees, consumers, activist groups, the non-profit sector and others”. Tightly woven into the fabric of new corporate responsibility is the ground-breaking notion that one can do well, by doing good. Corporate philanthropy is about inspiring trust, goal-setting and action towards ending social and environmental strife.
To engage in corporate philanthropy is to maintain a transparent motive and effort between both business and individuals. It is important that the business strategy aligns the efforts of not only the stakeholders, but also the
employees, sellers and consumers. TIAA-CREF Institute President and CEO, Roger W. Ferguson Jr. believes that individual shareholders should be given more effective rights, such as “access to the proxy to nominate directors, majority voting in director elections, and a shareholder vote on executive compensation”. Long-term wealth creation must be optimized through a continuous, affable process between shareholders and companies.
It is also crucial for corporations to inspire trust through their involvement in encouraging peace and reconciliation in war-torn countries. The philanthropy-focused corporation inspires trust through their support of people, irrespective of their socio-economic status, religious, or cultural beliefs. At its core, the corporation must form a strategic alliance that encourages the success of all involved parties. Poverty-driven conflict is a threat to the bottom-line, to not only the people, but also the corporation. When people are disease-riddled, starving and poor, they are inefficient employees and consumers. When people are given the tools to create a prosperous life for them and their loved ones, they not only produce in larger capacities, they also consume at greater levels. The fostering of a peace-process will be a conduit for lasting change, showing people that “peace pays”.
As corporations aspire to be more philanthropically-centred, it is important that they set long-term sustainability goals. Long-term growth is nurtured over short-term gain. A socially and environmentally minded organization will meld the short-term worries with long-term plans, leading to a corporate strategy that addresses current issues, while planning for the future. As we rise out of the current recessionary crisis, it is important to learn from our mistakes as a consumption-focused individualistic society. Roger W. Ferguson Jr. explains that “we need to save more, and consume less…we need to wean ourselves off of unchecked consumerism and focus on exporting and investing to drive growth”. Continuous evaluation is integral to the en mass success of a philanthropic initiative. If what was done in the past has not been successful, a philanthropic corporation must re-evaluate their core processes, refining and even drastically changing their viewpoint.
Integral to the corporation’s new role as philanthropreneur, is the idea that they must inspire others to engage in doing well by doing good. A revolutionary type of business is forming, the benefit corporation. The benefit corporation (or, B corp.) is a new form of corporation that has been created to have a “material positive impact on society and the environment and to meet higher standards of accountability and transparency”. Discussed in a previous blog post, the benefit corporation is rethinking the way in which corporations conduct business, and keeping them accountable to promised changes and endeavours. Lasting action can only be attained through nurturing relationships with all actors. With the realm of social media permeating every facet of corporate strategy, it is integral that corporations relationally engage with people and create authentic interactions. Once these authentic relationships have been engaged, the social media realm has the power to fan the flame of a corporate philanthropy strategy that engages shareholders, as well as employees, sellers and consumers, ensuring that the corporation does well, by doing good.
What Can I Do?
As young business people, it is imperative that we continue to hold businesses to a certain moral and ethical standard. As future leaders, it is up to us to define what our legacy will be to future generations. One can support corporate philanthropy by:
- Only financially supporting businesses that are proven to engage in philanthropy
- Seek out, and work for businesses that have philanthropy woven into their business objectives – not simply on paper, but put to action as well
- Start your own revolution! We do not need to wait for others to engage in philanthropy. Begin your own grassroots initiative to create change in your own city. It all begins with one.
by Brienne Torley is licensed under a Creative Commons Attribution-NonCommercial-NoDerivs 2.5 Canada License.