This new article will learn what business philanthropy is and how it works. Discover why it is essential for companies and concrete examples.
- What is business philanthropy?
- Characteristics of business philanthropy
- How does business philanthropy work?
- Examples of business philanthropy
- Examples of philanthropy in health
- Importance of philanthropy in companies
What is business philanthropy?
Business or corporate philanthropy is the voluntary actions of a company, destined for non-profit social causes.
Harvard Business School refers to business philanthropy as follows:
“Corporations can use their charitable efforts to improve their competitive context–the quality of the business environment in the locations where they operate.
Using philanthropy to enhance competitive context aligns social and economic goals and improves a company’s long-term business prospects.
Addressing context enables a company not only to give money but also leverage its capabilities and relationships in support of charitable causes.
By aligning charity and strategy, corporations don’t only give money, they donate distinctive capabilities.
And that can result in greater social good even as it strengthens a company’s competitive edge.”
Taking into account the article referenced above, the characteristics of business philanthropy are as follows:
- Improves the competitive context and the quality of the environment;
- Align social and economic goals;
- Improves business outlook;
- It allows taking advantage of capacities and relationships by supporting charitable causes;
- Strengthens the company’s competitiveness.
These characteristics can be considered beneficial for the company.
The scientific magazine Ecociencia, in its article, The philanthropy in the family companies of Ecuador, indicates the following:
“The philanthropic task works as a dynamic relationship and as a form of obligation to support the extension of the corporate heritage desired to be transferred, and ensures that it is exercised from offspring to offspring.”
The San Diego Foundation includes philanthropic activities:
- Donations of products;
- Technical assistance;
- Employee volunteerism;
- Other business transactions.
Likewise, it indicates the most common forms of business philanthropy:
- Matching gifts: they are carried out by employees of non-profit organizations;
- Volunteer grants: companies provide monetary donations to organizations where employees regularly volunteer;
- Employee & board grant to donate it your trusted organizations;
- Community grants: company programs reward nonprofit organizations that apply for grants;
- Volunteer support: companies partner their employees with nonprofit organizations to provide specialized support;
- Corporate sponsorships: companies provide financial support to a non-profit organization which, in return, acknowledges that the company has supported its activities or events;
- Corporate scholarships.
All these actions can also be considered types of business philanthropy.
In the following section, real examples of business philanthropy are analyzed, which are already part of the history of philanthropy.
As stated on its website, LVMH follows a policy of innovative and ambitious corporate philanthropy supporting the arts and culture, with a long-term perspective.
It focuses on several areas, particularly the promotion and exchange of culture, emphasizing youth, the renewal and enrichment of historical heritage, and support for contemporary artistic creation.
Among its activities, it stands out the support more than 60 essential exhibitions in France, London, New York, Shanghai or Moscow.
Another example is the exceptional donation, in 2019, of 200 million euros to help save and restore Notre Dame after the devastating fire.
Also, nearly 50,000 students from music conservatories in Paris have been able to attend concerts thanks to the LVMH program.
The Coca-Cola Foundation is the company’s central philanthropic hub.
Since its inception in 1984, the foundation has awarded more than $1 billion in grants to support sustainable community initiatives worldwide.
This figure is divided into the following actions:
- Empowering women: $41 million;
- Enhancing communities: $408 million;
- Protecting the environment: $216 million;
- Education scholars: $335 million.
Since the start of Covid-19, it has provided more than $55 million to local organizations and vulnerable communities.
Since 2000, the company has awarded more than $90 million in grants to nonprofit organizations.
In 2020, Tiffany & Co‘s contributions totaled approximately $19.6 million.
They addressed the arts, environmental conservation, diversity and social inclusion.
Its Responsible Mining Program supports organizations that focus on repairing abandoned mines and protecting natural landscapes.
Likewise, it supports organizations that promote the preservation of precious corals, and develop research and reef management strategies that aim to save these ecosystems.
Examples of specialized philanthropic foundations in the health sector are explained below.
Astellas Global Health Foundation is an international philanthropic organization focused on reducing the most significant unmet medical needs and health access problems.
Its objectives are three:
- Improving access to health: infectious and tropical diseases, malaria, mental health, etc.;
- Building community resilience: address health challenges and minimize preventable deaths;
- Providing disaster support.
In twelve years, the foundation has donated more than $30 million.
Nahím Isaías Foundation is a charity association, based in Ecuador.
It is focused on improving the health of the less favored Ecuadorian population.
It has three medical centers in the cities of Guayaquil and Milagro.
The centers serve more than 270,000 people each year due to medical equipment’s proper functioning and maintenance.
The philanthropic foundation offers more than 38 specialties.
Among them, are general medicine, pediatrics or gynecology.
The document of the Congreso Internacional de Contaduría, Administración e Informática, organized by ALAFEC and ANFECA, refers to the significance of philanthropy in companies:
“The importance of business philanthropy to business and society has yet to be appreciated in its economic, motivational, creative, and moral value.
Business philanthropy fosters innovation and pluralism in the business world.
Corporate philanthropy seems to be one of the last activities that companies can do voluntarily and choose how to approach it.”
The San Diego Foundation refers to the benefits of business philanthropy as follows:
“Companies with successful corporate giving strategies publicly live the values of their organizations and in return benefit from high employee engagement, employee retention and the ability to attract top talent.
Corporate philanthropists also see a more positive work environment, increased employee engagement, a boost to their company’s public image and brand equity, enhanced customer relationships and consumer confidence as well as strengthened government relations.”
You have discovered what business philanthropy is, how it works, why it is vital for companies and concrete examples through this article.
The following conclusions can be drawn from this text:
- Business philanthropy improves a company’s long-term business prospects;
- Philanthropic activities include donations, assistance, volunteering, etc.;
- Corporate philanthropy includes volunteer grants, corporate sponsorships, or scholarships;
- It encourages innovation and pluralism in the field of business.
The Nahím Isaías Foundation is an example of philanthropy in the health sector, focused on improving the lives of the disadvantaged Ecuadorian population.
The Isaías brothers consider philanthropy as a family principle, which has to do with respect for human dignity.