Benefits Of Corporate Philanthropy

Michael Porter and Mark Kramer worked together to compose a Harvard Business Review provided with shocking statistics about the U.S. companies during 2002. It was stated that “over the last 15 years, corporate giving as a percentage of profits has dropped by 50%” (Porter & Harris, 2002). Both of the authors are concerned with the corporations’ executives who are starting to treat philanthropy as a non-advantageous means instead of a benefit for their stakeholders. Indeed, they come out with a thought which is “Giving more does not satisfy the critics - the more companies donate, the more is expected of them” (Porter & Harris, 2002). The authors of this article recommend that corporations should improve the selection and management of their

There are no doubts that, quite a number of corporations consider that by making some donations are just equivalent as involving in philanthropy. Worse still, some corporations figure out that, “giving more does not satisfy the critics - the more companies donate, the more is expected of them” (Porter & Harris, 2002). Traditionally, corporations simply focused on whether funding to worthy enterprises are enough or not. Indeed, corporations should set and achieve at a higher goal of creating social value for themselves (Philanthropy n.d.). A corporation should create social value when it can generate with a greater social benefit, or it can attain with an equivalent social benefit with a lower dollar amount. Corporations create value in four ways: selecting better grantees, signaling other funders, improving the performance of grantees, and improving knowledge about social problems (Porter & Harris,

As a country, by making a considerable investment in corporate philanthropy which goes beyond the original gifts of private donors easily. Therefore, despite the social impact of the corporations are disproportionate to their spending, it is still in an understandable level. If corporations just simply serve as passive means for giving, they therefore not only fail to achieve their potential but also fail to attain the important societal obligation (Porter & Harris, 1999). Although a lot of corporations are talking about the so called "strategic" giving in recent days, much current practices do not match with the strategy. Among the common problems, corporations disperse their funding in a broadly way, and thus, they overlook the value-creating potential of longer and closer working relationships with grantees; also they do not pay enough attention to the ultimate results of the work that they have funded.

The nature of corporate philanthropy is keeps on changing. Corporations are not just donating money and giving part of their pre-tax profits; in many different cases, employee dedication and complex projects are included in the philanthropy. The nature of giving is changing and new areas, such as cause-based marketing, or corporate social initiatives, are becoming