Strategic+Philanthropy

The concept of //strategic philanthropy// suggests that organizations may be able to 'do good' for society while at the same time benefitting themselves in a strategic way. As part of community relations programming, strategic philanthropy is part of the public relations function of for-profit organizations**.

What is philanthropy** **?** Philanthropy is the "[|altruistic concern for human welfare and advancement, usually manifested by donations of money, property, or work to needy persons, by endowment of institutions of learning and hospitals, and by generosity to other socially useful purposes" [1.]] Philanthropy is a tactic often used by businesses to achieve a positive image to the public; whether their donation is done in kindness or for self benefit. The definition of strategic is [|‘pertaining to, characterized by, or of the nature of strategy’]  [2]. Strategy is [|‘a plan, method, or series of maneuvers or stratagems for obtaining a specific goal or result’] [3]. Business organizations use strategic planning to achieve specific objectives. With a definition of Philanthropy and Strategy behind us, it is only natural that we next explore the notion of strategic philanthropy.  Strategic Philanthropy is defined by Strategic Philanthropy Inc. as [|‘assist[ing donors and charitable organizations to develop strategic philanthropic programs to achieve their goals’ [4].]]
 * What is the definition of strategic ? **
 * What is Strategic Philanthropy ? **

Strategic philanthropy is operationally defined in an article by Kelly Tokarski, found in Public Relations Quarterly, as  [|the process by which contributions are targeted to serve direct business interests while also servicing beneficiary organizations[5.]]  Both of these definitions point out the trouble that businesses are getting into with the idea of strategic philanthropy; the idea that the organization is in fact helping causes and nonprofit organizations, but it may be more self-serving than we would hope. This definition stage leads us into how this idea is used in business and where ethical lines can sometimes be crossed, however carefully.   Charitycafe.com is a web-based donation centre. Here you can make a donation to almost any cause you wish – with the added convenience of doing it from your own home on your own time. But not only individuals use strategic philanthropy, businesses do too. Charitycafe defines Strategic Philanthropy as  as [|a unique and powerful way to combine your company marketing goals with your desire to increase the well-being of mankind. No matter what you call it, strategic philanthropy is a positioning that connects your company with a not-for-profit organization or cause. In this way, while you are being helpful and working for the common good in your community, your business is receiving parallel benefits. These benefits include exposure, lead generation, employee retention and increases in performance and productivity. They can even include benefits to your bottom line [6.]]
 * How is strategic philanthropy used in a business setting and why is it important ?   **

 Tokarski states [|‘corporate philanthropy has undergone a transformation brought about by the downsizing of businesses and the need to justify its continued existence while workers are being laid off. To accomplish this, for the past few years, many companies have adopted a more strategic philanthropy that has the aim of helping worthwhile causes while advancing the company's name recognition, public image and competitive edge’ [7.]]

 While Charitycafe sees the world of corporate strategic philanthropy as helping organizations and the world, Tokarski’s view may be a bit more on par with how the business world has taken on this sort of giving. Tokarski continues by asking [|‘] [|Is Strategic Philanthropy better than the United Way approach to corporate giving?’ She answers this by stating ‘research suggests that strategic philanthropy is reported to be better for corporations and nonprofits than the traditional United Way approach. Companies have long given money to charity by scattering it to a variety of causes unrelated to their business or subject to the whims of the CEO. Diluted and unfocused, their philanthropy makes no significant impact on any particular cause or audience or on the company's reputation in the community. The problem with pooled funds (United Way included) and charity events is they disconnect particularly from long-term goals and relationship building (Brilliant). In addition, when a company runs its employee campaign through the United Way, the campaign may bypass some employees' favorite issues or organizations (Reder)’ [7.]] So with the argument of Tokarski can we still say that strategic philanthropy is all bad? A corporation’s alignment of itself with organizations of interest in order to give doesn’t seem all bad, nor does allowing employees to voice their opinions on organizations requiring donations. So when is it that an organization crosses an ethical boundary in terms of giving? **  How does strategic philanthropy affect ethical decisions ? **  In a case study of Bristol-Myers Squibb in Business Source Premier, Sergio Bustos explores a corporate donation that was made to Mexico City. The organization donated over $5 million to a project developed to treat children with HIV or the AIDS virus; this announcement was made by Mexico’s Health Secretary Juan Ramon de la Fuente instead of a corporate executive. Bustos states [|‘clearly, Bristol-Myers Squibb was playing the role of the good corporate citizen. But the good deed was not merely a random act of charity. It also ties into the company's overall business strategy to grow its pharmaceutical and consumer medicine businesses in Mexico and the rest of Latin America. The multinational expects sales in the region to increase 25% to at least $1 billion over the next three years [8.For Bristol-Myers Squibb, the multimillion dollar project accomplishes at least two business goals: Sharing the spotlight with Mexico's health secretary helps the company build a good relationship with the Mexican government, and paying for the training of pediatricians gives the company a lasting image with the very people who write prescriptions’ [8].]]   Here we have a great example of how an organization’s ‘good deed’ came with an ulterior motive; one that the Public Relations Society of America would not deem ethical. In fact, the Association has created a section to deal with Corporate Social responsibility. [|‘Corporate Social Responsibility is a management model that encourages ethical values and practices for all sizes of businesses and nonprofits by creating a public relations platform to promote these practices to stakeholders. The Enron collapse and other corporate ethics failures have underscored the value and viability of ethical corporate practices, although the concept of corporate social responsibility predates these high-profile failures. The controversial failures only raised the temperature of the public debate about the need for corporate financial and management transparency – demands made from many sectors: public interest groups, watchdog organizations, shareholder groups, environmentalists, the media, government and other powerful associations in our society’ [9.]] Surely, the Bristol-Myers Squibb case is one that may have caused this section to blink twice. It is easy to see how Strategic Philanthropy could be perceived as more harmful than helpful. It is important for organizations giving corporate donations to ensure that the outcome is aimed at benefitting the cause or non-profit organization and not the organization itself. We know the organization is always looking to get something from their kindness but it’s easy to see the difference between the benefit of tax receipt and the benefit of future gross earnings.

1. http://dictionary.reference.com/browse/philanthropy 2. http://dictionary.reference.com/browse/strategic 3. http://dictionary.reference.com/browse/strategy 4. http://www.strategicphilanthropy.ca/profile.html 5. http://p9797-131.202.3.117.www.msvu.ca:2048/MuseHost=proquest.umi.com.www.msvu.ca%3A2048/MuseFirst=1/MuseSessionID=7eaf612f47e8f89a5ce4e82c91252d/MusePath/pqdweb?index=0&did=43827628&SrchMode=1&sid=2&Fmt=2&VInst=PROD&VType=PQD&RQT=309&VName=PQD&TS=1226089845&clientId=18853 6. http://www.charitycafe.com/guest-articles/strategic-philanthropy.html 7. http://p9797-131.202.3.117.www.msvu.ca:2048/MuseHost=proquest.umi.com.www.msvu.ca%3A2048/MuseFirst=1/MuseSessionID=7eaf612f47e8f89a5ce4e82c91252d/MusePath/pqdweb?index=0&did=43827628&SrchMode=1&sid=2&Fmt=2&VInst=PROD&VType=PQD&RQT=309&VName=PQD&TS=1226089845&clientId=18853 8. http://findarticles.com/p/articles/mi_m0BEK/is_/ai_55548154 9. http://www.prsa.org/networking/sections/csr/