Why Corporate Philanthropy is so Important

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(Newswire.net — February 5, 2016) — When a corporation gives back to its local community and the world at large, it is making a sound investment in its long-term financial success. Unbelievably, today, However, according to the Harvard Law School Forum, academic research shows a positive connection between corporate social responsibility and a strong financial performance. One example is the corporate giving by business leaders such as Patrick Dwyer Merrill Lynch and his family foundation. 

A company may not like to publicize its corporate giving. It fears it may be asked for donations that it cannot fill, or that it raises expectations in a good year that it cannot meet in a lean year. Some companies are afraid to give to one cause thinking it may alienate a certain segment of consumers. It may also want to avoid any possibility of its brand being connected with even the smallest controversy. However, these concerns are minor compared to the benefits.

Boosting Name Recognition

Charitable donations and volunteering by employees increases brand recognition must faster and more effectively than advertising. Many consumers tend to tune-out advertising, but pay close attention to what companies are doing in their community. When consumers see brand names connected to positive actions and endeavors, it solidifies the brand and promotes goodwill. 

Today, consumers are more careful than ever before about the products and services they use. They are more inclined to give their business to a company that has the same values. For example, they will look into the environmental policies of a company or how the company benefits the community from which it gets its employees. 

The Local Community and Beyond

Whatever the reason for corporate giving in the community, the local organizations are benefited. When companies give financial aid and grants to local organizations, the organizations can afford the supplies and infrastructure that they may not have otherwise been able to afford. These philanthropic efforts strengthen the community as a whole through several means such as a boost to the local economy, better schools, a cleaner community and more. 

The philanthropic efforts in a community must benefit the community and be seen as helpful. Otherwise, they will be seen as self-serving to send more business to the company. When the service genuinely benefits the community, it will encourage the local people as well as local officials to use the products or services of the company. 

For multi-national companies, this means benefiting people in developing countries and may result in enhancing the size and quality of their customer base. The company may actually improve the quality of life for the people in the communities where the company has its head office and other communities where it does business. 

Motivated Employees

It’s no secret that companies want the best and brightest employees no matter what the position. Research shows that a large percentage of talented people want to work for a company that has strong corporate social responsibility. Especially among Millennials, people want to work for a company that shares their own personal values. They may be more motivated by giving back to the community than they are by their own paychecks. 

Opportunities for Innovation

Supporting entrepreneurship may not be on the top of the list for philanthropic giving, but it is gradually creeping up the list. If a company wants to become a job-creator, supporting entrepreneurship is one way. 

Charitable giving to universities, foundations and non-profits opens the door for partnerships in the latest research, technical expertise and access to new ideas. It may also give the company first access to talented graduates. 


Education is one area that covers all of the above advantages of corporate philanthropy. The main reason for this is the wide area educational giving can cover. For example, companies can donate to existing schools in depressed areas, fund programs for specific groups such as girl education in developing countries, fund programs for children who require special education because of dyslexia, ADHD and short-term memory deficits and other learning difficulties. 

A good education is a fundamental part of the development of a person, no matter what culture, gender or religion. There are children all over the world who need the chance for a good education. Innovation in education is one way forward for corporations because many future jobs don’t even exist yet, but children need fundamental grounding in capacity building. Top companies are learning that the more they do for education, the more demand there is for their help, and everyone gets smarter about innovation in education. It is considered a cycle of self-improvement. 

Donations are not the only way to help. Tech companies may send employees to high school computer sciences classes where they train students in the latest technology without the school incurring any training or development costs. 

Corporate social responsibility may be a controversial subject in the boardroom, but the bottom line is it is good business. Companies not only show they care about the shape of the world, when they put their money where their mouth is, they attract the most talented and motivated employees.