Socially responsible business, philanthropy, and sponsorship
Being a good and helpful citizen, building recognition, and promoting one's practices, supporting the community, establishing partnerships, and thus contributing to achieving good business results are some of the possible reasons why various profitable organizations (companies, banks, insurance companies, etc.) decide to engage in philanthropy or corporate giving. Indeed, different organizations allocate significant resources, primarily in the form of donations or sponsorships to various non-profit organizations or projects.
Doubts about real motives Typically, information about donations and sponsorships comes through media announcements or advertisements, word of mouth, or by monitoring websites. In other words, organizations use them as a form of public relations or advertising to build brand or company recognition.
Therefore, it is not surprising that there is skepticism about the true motives of profitable organizations, especially since they increasingly associate these contributions with socially responsible business and present them as such. Skepticism grows even more when the proportions between funds invested in a project or organization and those spent on advertising and public relations occasionally become known.
Can philanthropy be equated with socially responsible business?
Reasonable expectations and interests The European Commission's definition of corporate social responsibility, as a concept in which companies voluntarily integrate concern for society and the environment into their business through dialogue with their stakeholders, can serve as a guide in crystallizing the answer to this question. Another guide comes from Porter and Kramer, as they clearly distinguish a strategic approach to philanthropy from prevailing corporate practices that reflect the need to do something good and useful without establishing meaningful connections between business and social goals and expected benefits.
In this defined concept, concern for society and the environment does not imply giving at the expense of business results and promoting such a practice. It involves recognizing reasonable expectations and interests of legitimate stakeholder groups that organizations influence through their business or that can impact their ability to successfully implement their strategies and goals. In dialogue with stakeholder groups, organizations need to determine the relevance and importance of specific issues and expectations, the type of impact, and then voluntarily change their management processes and practices to achieve sustainable development.
Philanthropy has its place in this concept, but certain conditions must be met. Firstly, organizations need to start from their core business and identify social issues that can help improve their capabilities and competitive potential. It is important to assess the potential economic, social, and environmental impact of giving. By choosing quality organizations, the efficiency of fund utilization and the desired impact can be influenced. By investing knowledge and skills characteristic of the business world, organizations can directly impact the effectiveness of non-profit organizations and their potential to develop new innovative approaches, ultimately sending a clear signal to other potential donors that it is worthwhile to invest in that organization, leading to greater collective impact, as agreed by Porter and Kramer.
It is undisputed that various organizations have invested significant resources in the non-profit sector, and such investments have been good and beneficial. However, investment can also be done in a different, strategic way, which primarily involves changing previous thinking and practices.
Adapted from http://www.media-marketing.com, Written by: Andreja Pavlović, Director of Corporate Social Responsibility at Hauska & Partner Group.
