Why non-strategic corporate philanthropy is not sustainable?

As a business growth consultant I often start a consultation with a new client by asking them about the mission and vision of their business. Two terms that have become clichés in the corporate world but are in fact quite important.  Why you might wonder…

Simply because the lack of mission and vision in a company points me to a fundamental problem – lack of strategy, in other words lack of direction. I say fundamental because the truth is, how could you progress, and more importantly – progress continually, if you don’t know where you are headed to and if there is no plan and consistency behind your actions.

In business, as in everything, you need to know where you are going to get there. Otherwise, your efforts are scattered and when there is no direction and focus, your work is rarely effective. Unless you fail, you will end up in a place you never intended to be, the realisation of which is disappointing and demotivating.

The same holds true when it comes to philanthropy. This is the reason why I often talk to my clients about the need for their philanthropic endeavours to be strategic and integrated into their business structure. Otherwise, what you do is hardly philanthropy in the real sense of it as there is no long term impact as a result from your philanthropic deeds.

The truth is, non-strategic philanthropy is not only ineffective as actions are not integrated and consistent but also unsustainable in the long run. Here’s a few of the reasons why.

Customers & employees see through it

All the businesses I consult that do amazing work in their communities and have a support system of stakeholders such as customers and employees who are excited about the company’s social mission. When your efforts are sporadic and not logically integrated so that there are long term results from what you do, your customers’ support will disappear and so will employees’ motivation. When a business is not genuinely devoted to their social cause, they generally tend to drop the ball sooner or later. The excitement disappears, motivation and engagement decreases, and the management gets carried away with more pressing or currently important issues.

No visible impact

If social impact is not properly incorporated into your business model, your efforts will be scattered and irregular which would make it hard, if not impossible, to achieve any clear results and visible impact. Strategic philanthropy means that you focus your social work on a particular cause and you contribute in this direction consistently. The purpose is to build up on what you’ve achieved constantly by incorporating new approaches and bringing in fresh, new initiatives to support your cause. When there’s no build up and follow up, chances are  the results from what you do won’t be clear and you will find it hard to keep up your social activities.

No improvement in the competitive environment

The core of strategic philanthropy and its main benefit is in its ability to improve a company’s competitive environment. This means that through persistent and logical efforts such as donating time, knowledge and resources, organising initiatives and bringing awareness, you directly and indirectly invest in the community and the economy you are a part of. Over the long run, it becomes clear how these efforts pay off in terms of healthier community members, larger and better educated talent pool, happier employees etc. Thus strategic philanthropy, as opposed to corporate social responsibility, is in fact more of an investment rather than anything else. When companies engage in strategic philanthropy for long enough to realise that, it becomes motivation enough to keep up their work.

Bad publicity

There’s something else as well. As many companies have engaged in efforts that are designed for brand building and positive publicity, the general public has grown very sensitive and cynical towards corporate social responsibility. We are at a stage when companies not only need to be careful about their employment policies, usage of resources, partnerships, etc., as anything could cause a scandal and thus reflect badly on their brand. They also need to constantly reassure the general public of being genuine about their social work. This being said, it is often the case that a company has the good intention to do something for the community but when inconsistent in their actions, they end up being seen as not genuine and as if they are only doing it for publicity. This in turn could harm the company’s reputation and discourage the organisation from any further efforts.

Corporate acts of kindness, when not focused, are unsustainable because there is no permanent motivation. And there is no motivation because there is no vested interest on the part of the business. Hence, for your social engagement program to work, philanthropy needs to be well-embedded into the body and soul of your organisation. This is why indeed it is important that you tie in your business results with your social impact, and this is what I call strategic philanthropy.

If you would like to incorporate social impact into your business model so that you not only make a difference but also grow your business, please don’t hesitate to get in touch. As a corporate philanthropy consultant with many years of business coaching experience, I can help you integrate meaning and purpose into your business in a sustainable way. . You can get in touch with me, Paul Davis, here.

 

 

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