Tuesday, 25 January 2005

Corporate Philanthropy


Corporate Philanthropy is a modern and effective key- factor in the marketing commerce. Why? Nowadays many business companies in Great Britain are involved in philanthropy. Corporate philanthropy has become of big importance. What does it mean corporate philanthropy? It is voluntary funds released by a company for supporting socially-significant spheres and aimed at creating a favourable public opinion about the company. And this point is very essential, as it distinguishes corporate philanthropy from any other activity - here must be cooperation with the strategy of the company, clearness and efficiency of mechanisms releasing money as well as orientation for the company goals. So, corporative image and trust into company – these are the goals of the company. Got stronger business realised its ability to play the great role in the process of improving society life. How to reach productivity, effectiveness and good result? A company has to understand its advantages of charitable activity. In order to raise the quality and level of corporate contributions each business community requires a win-win scenario.


Usually Corporate Philanthropic Investments target at 3 sectors:

  1. social programmes
  2. art and culture
  3. education and science

Types of Corporate Philanthropy:
  1. external (aimed at society) or internal (inside the company)
  2. local or international importance
  3. long- term cooperation with the concrete organization/project or one-shot (one-time) support of organization/project


  • Company motivation in corporate philanthropy

Most of the companies are aimed at increasing the stock appreciation that is why every company considers its activity in the light of capitalisation. “The Link between Corporate Citizenship and Financial Performance” research, held by Conference Board, revealed the following dependence:

  1. very considerable positive correlation between return on assets and social company activity
  2. very substantial positive correlation between return on sales and social company activity
  3. positive, but less sizeable return on capital and social company activity

  • Positive influence of social activity onto consumers’ mood

A good company image is important for the shareholders as well as for consumers. A consumer would choose a brand (in equal circumstances) associated with the social responsibility.

  • Good sign for the company personnel

Investments into people (employees) lead to the widening of the client field. For example, if banks` workers are pleased with their work conditions and positions then clients of this very bank are pleased with more than 15 % in comparison with other banks. So, it will attract more clients to the bank. As in 1997 the conflict between the management and the pilots of British Airways Company cost it 125 millions pounds. Thus, try to create favourable climate in your company to avoid any unpleasant situation.

  • It can create good relations with the local authority and bring the business company some good contracts
  • It allows to get tax remissions

Though, many businesses work through non-commercial organisations and they have some disadvantages in their work: need to improve management mechanism, use more professional approach and analyze the process and productivity of activity.

Forms of Corporate Philanthropy

The main form of Corporate Philanthropy usually is financial support- 81 %, then go valuable prizes and presents, covering bills and expenditures, special scholarships and grants, humanitarian aid (food, clothes) and others.

The leaders of the world corporate citizenship philanthropy in the UK include more than 700 companies.

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