Corporate Philanthropy on the Developjment Term Paper

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" (McKinsey & Company and CECP, 2008, p.3)

Fine, Kirkpatrick, Parker, and Watson (2008) in the work entitled: "Social Media: Philanthropy in a Connected World" states that today's companies can no longer "ignore the influence of social media and the opportunity to "deepen engagement with employees and customers alike through philanthropy efforts capitalizing on new media channels." (p.5) Fine, Kirkpatrick, Parker, and Watson (2008) additionally state that some companies have "already created visionary programs and initiatives that successfully tap into social networks." (p.6) Finally, Fine, Kirkpatrick, Parker and Watson (2008) state that corporate philanthropy professionals can leverage additional resources and activate a community of advocates to benefit their nonprofit partners and community investment programs through social networks." (2008, p.6)

The work of Kania and Kramer (2008) entitled: "Confluence of CSR and Philanthropy" relates that the manner in which companies "integrate philanthropy and CSR" is gaining the attention of investors. Companies are stated to have started linking CSR and philanthropy "in four innovative ways that can lead to shareholder value creation: influence public awareness of an issue, influence external conditions that make it easier to comply with CSR requirements, use corporate knowledge to impact social issues, and link CSR and philanthropy" all of which impact the competitive advantage and strategic differentiation of a company." (p.5)

Katy Friesz reports in the work entitled: "Employee Volunteerism: Good for Community, Good for Business" that the Corporate Volunteerism council (CVC) is a professional association focused on improvement of communities through advocating, supporting and growing employee volunteerism in all companies regardless of the size of the company. Friesz relates that volunteerism is viewed by companies of all sizes "as an important way to build relationships with nonprofit organization, beyond the traditional 'checkbook' philanthropy. Among other things, nonprofit organizations benefit from corporate volunteerism by reaching volunteers who otherwise may not know how to get involved or who may be less aware of the many community needs." (2009, p.1) Employee volunteerism is a strategic priority for many companies and it has been demonstrated in research that "corporate citizenship and employee volunteerism in particular, positive impact a corporation's reputation, recruitment and retention efforts and employee satisfaction." (Friesz, 2009, p.1)

Friesz reported that the 2007 Cone Cause Evolution Survey states findings that "…89% of those familiar with their companies' cause programs feel a strong sense of loyalty to their employers, and 93% said it is important for their companies to provide them with opportunities to become involved in social issues. This trend is predicted to remain steady or increase as the millennial generation enters the workforce." (2009, p.1) Friesz additionally states that employee volunteerism "…fosters a high-performance culture through teambuilding, networking and skill development. According to the 2005 Deloitte Volunteer IMPACT Survey, nearly four out of five respondents (78%) see volunteering as an opportunity to develop business skills, including decision-making, problem-solving and negotiating. and, of those respondents who serve on a nonprofit board of directors, nearly 73% strongly agreed that volunteering offers the opportunity to enhance leadership skills." (2009, p.1)

In 2007 a McKinsey Global Survey entitled: "The State of Corporate Philanthropy" it is reported that the social and political issues most likely to impact shareholder value for companies are inclusive of the top three issues of: (1) environmental related to climate change; (2) health care and other employee benefits; and (3) privacy and data security. ( ) the following figure lists the social and political issues likely to have the most positive or negative impact on shareholder value for companies over the next five years in the Asia-Pacific, Europe, North America and developing markets.

Figure 1

Source: McKinsey & Company Survey (2007)

When respondents in the survey reported by McKinsey & Company were asked which, if any of the issues listed in the following chart was their company addressing currently with the corporate philanthropy program the answers stated were those listed in the following chart labeled Figure 2.

Figure 2

Source: McKinsey & Company Survey (2007)

When polled by the survey the percentage of respondents selecting stakeholder for the categories shown in the following figure reveals that employees were listed as top stakeholders with local communities following a close second.

Figure 3

Percentage of Respondents and Categorical Selection of Stakeholders

Source: McKinsey & Company Survey (2007) The McKinsey survey reports that when respondents were asked the question of whether their company's corporate philanthropy programs address the global social and political issues that are most relevant to the company's business, 54% of respondents stated that overall their company did address these issues and 71% reported that their company addressed these 'very and extremely effective' and that these programs addressed stakeholder concerns and met social goals.

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Figure 4

Source: McKinsey & Company Survey (2007)

When respondents in the McKinsey survey were polled as to what extent their corporate philanthropy programs were effective overall in meeting their social goals the answers provided were as follows:

Extremely/Very Effective

20%

Somewhat Effective

47%

Slightly/Not at all Effective

23%

Don't Know

10%

When respondents were polled in the McKinsey survey as to whether their corporate programs are effective overall in addressing concerns of the company's preferred stakeholders the answers given by respondents were those as follow:

Extremely/Very Effective

19%

Somewhat Effective

48%

Slightly/Not at all Effective

25%

Don't Know

8%

When respondents to the McKinsey survey were polled as to whether they expect that their company's corporate philanthropy programs would become increasingly global through attempting to impact global issues or through operation in a larger number of countries over the next five years, the answers given were those as shown in the following chart along with the reasons that respondents answered either yes or no to the question posed.

Figure 5

Source: McKinsey & Company Survey (2007)

When respondents in the McKinsey survey were polled as to which considerations have the most weight in determining the focus of their company in its corporate philanthropy programs the answers stated were those listed in the following chart along with the percentages of respondents stating these considerations.

Figure 6

Which Considerations Have the Most Weight in Determining the Focus of Their Company

Source: McKinsey & Company Survey (2007)

The work of Thomas, et al. (2009) entitled: "Core Business Competencies for Development Impact: Going Beyond CSR" states that no longer is the move "…from Philanthropic CSR to using core business for development impact…just an idea. It is being accepted within both the development and business sectors." (Thomas, et al., 2009) Thomas, et al. (2009) state that "…while the idea may sound obvious, it has considerable implications for how business is done. It contrasts with two previous ways of thinking. One was that companies could deliver their social responsibilities through corporate philanthropy or isolated CSR programs alone." (Thomas, et al., 2009) Diversity of practice is the outcomes of this new thinking which is stated to be center around four core ideas and specifically those stated as follows: (1) Through its core activities of investment and operation, business has major and multiple impacts on developing economies and people. Through purposeful action the business model can be adapted, not just to avoid damage, but to positively unleash greater development impacts, while still being commercially driven; (2) There is more than one way to adapt the business model. Supply chains are critical because they reach down to poor producers, but a company's distribution and retail, research and development, dialogue with consumers and policy-makers can all strongly affect its development impact; (3) the core business approach builds on the significant gains made by through CSR to date. These gains must be protected and expanded, while core business is harnessed to deliver more sustainable and dynamic impacts; (4) Delivering greater development benefits -- or higher social value -- can go hand in hand with building shareholder value. (Thomas, et al., 2009)

The Center for Corporate Philanthropy states that there are four elements of corporate philanthropy as follows: (1) Engage; (2) Educate; (3) Empower and (4) Enrich. (2009) it is additionally stated by the Center for Corporate Philanthropy that businesses "fuel the economic well-being of our community by providing jobs, benefits, resources, and more. Similarly, companies large and small enrich and support the good health of our community through corporate giving to nonprofit organizations. Corporate philanthropy provides multiple rewards for a company and its employees and is an integral component of a company's business plan." (Center for Corporate Philanthropy, 2009) No matter the size of the company there are several steps stated to be 'key' in developing a philanthropy program. Those steps are stated as follows: (1) Identify objectives and business interests; (2) determine a budget; (3) organize a strategy for grantmaking; (4) designate a contact person to manage the giving program; (4) Assess the giving program periodically and fine tune accordingly; (5) engage and involve employees; (6) form criteria for your grantmaking; (7) communicate your pride. (Center for Corporate Philanthropy, 2009)

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