To be sustainable in today's business environment, corporate-giving programs should go beyond simply "doing good," and boost corporations' bottom lines, a new study says.
The need for profit does not preclude the ability to have a positive social impact, says The Conference Board's report, "Making the Business Case for Corporate Philanthropy."
Corporate philanthropy programs "can improve social welfare, but some financial return from these programs is essential for corporate giving to continue in the long run," report co-author Christine Petrovits of George Washington University says in a statement.
A corporation should develop a major charitable effort that is aligned with its business goals and uses its unique assets and talents to remedy a social problem, the report says.
And the problem it chooses to address should be one in which progress would lead to a competitive boost for the company.
A publishing company that focuses on eradicating illiteracy, for example, can donate money, books and expertise to develop literacy programming, in the process increasing the number of readers over the long term.
Giving programs should be overseen by either the company's board of directors or a committee that includes directors and senior executives who can ensure that giving is aligned well with business goals.
High-level oversight also will signal to the company and partners that philanthropy is an integral part of the organization's strategy and must be taken seriously.
At the same time, corporations should guard against conflicts of interest involving board members and executives, avoiding funding relationships with nonprofits that have connections with a corporate board member.
And, to ensure that business and philanthropic goals are well aligned, corporations should develop procedures and systems to help measure progress toward both their financial and social goals, the report says.
"It is no longer sufficient for corporate philanthropy to simply ‘do good,'" the report says. "If corporate giving is to succeed in the long run, it must provide a financial return."
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