Where Does Philanthropy Fit in the CSR Spectrum?

I have to admit, I consider myself a purist. I’ve always felt more comfortable on the “Responsibility” vs the “Social” side of the scale in CSR. My early background is in Environmental and Employee protection and health. I actually was, and still am a Certified Industrial Hygienist (CIH) and Certified Safety Professional (CSP). No…that doesn’t mean I’m some special dentist – it just means, in my early career, I was mainly focused on helping companies minimize their environmental footprint and keeping their workers safe.

While that is still a drive of mine, most readers of this blog know that CSR or Sustainability or Corporate Responsibility covers a lot more ground than that to include Governance, Diversity, Ethics, Supply Chain, Risk Management, Reporting and even Marketing. But like I said, I came from the school of “Be” and then “Be Perceived.”

So where does that leave Philanthropy? Yesterday, I joined Intel’s CEO and some of our company’s program leaders and employee volunteers at the San Francisco Business Times Corporate Philanthropy Summit and Awards -

A long name, but an inspiring event. The top 70 most generous Bay Area companies were recognized and thanked for their commitment to community investment. Intel ranked #3 with 2006 cash giving of more than $10M in the Bay area alone. AT&T topped the list at more than $19M. Intel was also included in a special award for those companies that contributed more than 1% of after tax profit. I presented the Intel Education Partner of the Year Award to Bank of America for some of their innovative work, and Paul Otellini, our President and CEO participated on a panel that shared their views on balancing social responsibility with bottom line accountability, and explained how they make their giving decisions. Paul’s answer to the open question series can be read here – Download file.

So, what’s my point? Read that last line again. That’s not just writing checks – that’s strategic investment in community and human potential. It’s taken me a few years I suppose to give Corporate Philanthropy its due when it comes to CSR – or perhaps Corporate Philanthropy has changed over the years to become strategic CSR program.

Is giving money to good causes in the community a nice an honorable thing to do? Sure, but how about aligning it to your employee passions and then leveraging the unique skills and products/services your companies deliver to build stronger communities and perhaps even grow your business for your shareholders?

Perhaps I am asking too much of good old Philanthropy. Where do you think Philanthropy fits in the CSR spectrum?

12 Responses to Where Does Philanthropy Fit in the CSR Spectrum?

  1. Lord Volton says:

    A more meaningful metric would be how percentage of employees donated their own money, rather than the company choosing for them.
    I think corporate philanthropy is a bad idea, only because it assumes the company knows better than its employees and shareholders how to spend their money.
    If the people of Intel are truly generous then simply give them the option of donating. Lots of people give money to their local church, which is also philanthropy.
    Corporate philanthropy is code for corporate socialism. And that violates not only the shareholders rights, but it takes the company in the wrong direction.
    A small cadre of people whose personal pet projects get money when the shareholders and employees pet projects are ignored. It’s not only unfair it’s simply bad business.
    Fortunately the numbers are low enough not to matter, but you can be sure there would be a lot of people selling Intel stock if a group of insiders spent $500 million on corporate pork.
    Corporate pork! I like that even better than corporate socialism.
    When the government wastes taxpayers money on legislators pet projects it’s the same kind of thievery. Corporations shouldn’t do it and you should advise your colleagues that a better route is to allow Intel employees to donate their own money — which would be a legitimate metric.
    Rather than spending other peoples money on the personal pet projects of insiders. If you want others to promote your pet project then simply give them the option of joining the cause from donations deducted from their paycheck voluntarily.
    Otherwise it’s not philanthropy. It’s just robbing Peter to pay Paul.

  2. Marcy says:

    I have a few thoughts on this (surprise surprise). My feeling is that corporate philanthropy is distinct from corporate responsibility. Philanthropy is what you do with your profits. CSR is how you make those profits.
    While I think it is fine that companies get brand value out of philanthropic activities, I think too many companies go too far in trying to tie their philanthropy to the brand and the bottom line. If you are going to do charity, sometimes there really is nothing else in it for you other than knowing you did something to make a difference. That is the definition of it, no?
    I also think there is a difference between an emerging markets strategy and straight philanthropy. To my mind, this is the area that is getting most confused these days.
    One area where I see this playing out as a problem is in those communities whose basic human needs are not being met. Few companies are going to have a strategic business interest in helping the most desperate, poverty-stricken communities on this planet get their most basic needs met. And as companies steer their philanthropy into their emerging markets, they will invest less and less in those places in the world that are far from “emerging” onto the global business scene. My opinion is that companies should be clear about their strategic philanthropy, their emerging markets strategy and their straight-up charity. I am not saying they need to do all three. But in the interest of authenticity, they should be clear about what is what.

  3. Hallo Dave, I am the Head of Corporate Affairs EMEA at Hewlett-Packard and I am involved in CSR for many years now. I am confronted with the question of what philanthropy is, nearly on a daily basis. A first mistake corporations do is to use CSR and philanthropy interchangeably. That is wrong. Philanthropy is only one part of CSR. It stands for sustainable social investment. The second thing I consider as less useful is when corporations just donate huge sums of money to any project which seems to be on the top of the agenda at the moment but whic is not strategic. In order to really make a contribution to society, all philanthropy or better social investment should be strategic. Some time ago I talked about HP’s social investment approach on our blog : http://www.hp.com/blogs/csremea. We focus on our core competencies which are IT knowledge and products. That is how we can contribute the most in solving societal needs. We have evaluated the areas where we can expect to make the biggest difference (Education, Environment and Economic Development) and have developed a streamlined strategic social investment approach for our company . So, philanthropy is clearly a fundamental pillar of HP´s CSR strategy. And it clearly needs to be aligned with our business and core competencies in order to have a sustainable impact. Jeannette

  4. I agree with Marcy that there is too much confusion these days between emerging market strategies and philanthropy.
    Sometimes I think companies call their emerging market contributions “philanthropy” because they can’t put a good ROI value on them — you see this in terms of corporate support for education and workforce development, where they are putting dollars in because they are worried about future workforce needs.
    Other times, you have to label something like a charitable contribution to the symphony or museum “philanthropic” even though the company is clearly trying to buy good will.
    It strikes me that Marcy has put her finger on a very real problem with regard to terminology.

  5. Dave Stangis says:

    L.V. – good point. There is so much to talk about in this space, I’ll never get every thing into a single blog post.
    Our employees are a passionate and dedicated group. More than 35% world-wide volunteer each year and donate more than a quarter million hours. It’s like having 1000 employees just dedicated to improving communities. They also give more than $6 million of their own dollars each year. And, in many areas – United Way, Disaster Relief or Education, the company matches those contributions dollar for dollar.
    I’m committed to trying to hold open discussions on this blog and not try to convince folks of my particular point of view. I want the commenters to do that!
    That said, I think the word philanthropy is used in too broad a sense in some of these conversations. Companies shouldn’t just be giving $ away. They need spend their $ wisely for the sake of sustainability and their shareholders. As you say, there is no room for Corporate Pork today.

  6. Dave Stangis says:

    And the points made by the other 3 CSR thought leaders (Marcy, Stephen, and Jeannette) are right on point – and the crux of the blog post. Some people call the elephant in the room “philanthropy” others “strategic investment” or “community investment” while others may refer to “emerging market strategies” or maybe just “marketing.”
    I say err on the side of accuracy and describe what you are doing. I’ll leave the naming of it to others.

  7. Perry Gruber says:

    Lord Volton and the other people posting replies here make sense at first blush. There’s a long running perspective that the only appropriate corporate responsibility is generating returns to shareholders. However, since corporate entities are seen by the law as “persons,” these “persons” have, I believe, a moral if not ethical responsibility to give back to the communities from which they have profited. We are, afterall, in a closed system on this planet.
    Where corporate leaders choose to give back is another matter and open to debate. Rather than personal pet projects of a select few such as the CEO, the board, or their spouses, I believe employees, as agents of the corporation, should be involved in making that decision. That’s why I’m glad we at Intel have matching programs that allow employees – perhaps indirectly – to direct corporate giving.
    Employees’ community contributions should not be seen as indicators of a corporation’s philanthropy. Those donations are donations made of distinct individual persons who happen to work for the “person” called the corporation. The money they earn for their professional contribution to the corporation and what they do with it has nothing to do with the corporation. Besides, some employees make charity contributions to what may be considered morally or ethically objectionable outfits. Do you want your corporations to be pegged to that donation?
    What makes corporate giving, or CSR activities legitimate in the eyes of shareholders, at least in my view, is when that giving is strategic and targeted. There’s nothing wrong with a person giving and getting something in return. I give to my local public radio station because I appreciate how its programs enrich my life. Is that wrong?
    Feeding the poor and housing the unsheltered are important, immediate needs. However, I can only see isolated examples where these needs can be legitimately met by corporations. This is why we have a powerful, effective, global NGO community as well as a planet full of people concerned enough about those issues to donate their personal time and their personal funds. We also have a powerful U.S. military, which is increasingly being used in humanitarian relief.

  8. Lord Volton says:

    “However, since corporate entities are seen by the law as “persons,” these “persons” have, I believe, a moral if not ethical responsibility to give back to the communities from which they have profited. We are, aftercall, in a closed system on this planet.” Perry
    Individuals, whether corporate or otherwise, have no such moral or ethical duties. That is called totalitarianism — when you decide for others what their moral and ethical duties are beyond those which we’ve all agreed are the bare minimum (life, liberty, and the pursuit of happiness). The premise of philanthropy is giving something that is yours, not stealing from others.
    Corporate pork is simply spending other people’s money and feeling good about it. Why not give it to me and I’ll donate it to select charities? That would be equally unfair, but it amounts to the same thing.
    A corporation is owned by a group of people. And those people are entitled to their “share” of the company. And that share should not first be pilfered by corporate do gooders no matter how well intentioned.
    As an agent of a corporation you’re hired to protect other peoples investment, not spend it on your personal pet projects. That’s exactly what legislators do. And that’s why a lot of people hate big government.
    Are we seeing the dark side of big government come home to roost in big corporations under the guise of “Corporate Social Responsibility?” Are corporations so fat that they can afford to let a select few spend other peoples money? Intel just got done downsizing, do they really have a mindset that maybe it’s a good idea to let a handful of do gooders spend their shareholders money?
    A corporation has no special duties in its business activities beyond protecting the basic rights granted to all humans: life, liberty, and the pursuit of happiness. They are under no obligation to spend other peoples money to help the poor or cure the sick, but they certainly shouldn’t do anything that would prevent them from enjoying those basic rights.
    And companies like Intel do PLENTY in support of governments that violate those basic rights every day. So instead of worrying about where to spend a shareholders dollar, why not look internally at those projects that promote totalitarian regimes which prevent freedom speech and silence critics?
    Intel does have a social responsibility to stop promoting totalitarian regimes, rather than having conventions in China and being proud of their efforts in China, while blatantly ignoring the human rights violations.
    Shi Tao and many others rot in prison while we debate whether Intel has a social and ethical responsibility to give back to the community. Exactly how is Intel, and other companies working in China, giving back to a community that is repressed by its government with the support of high tech dollars?
    Maybe if Intel said “We’re done investing in China until they grant their people basic human rights” we would view them as socially responsible. Until then I view Intel’s CSR efforts as a gimmick.
    Sadly, not just Intel.

  9. Perry Gruber says:

    L.V. – I don’t think my opinion constitutes a totalitarian directive. It’s simply my opinion. But help me be clear about your opinion. I think I’m confused. Early in your post you write:
    “Individuals, whether corporate or otherwise, have no such moral or ethical duties. That is called totalitarianism…”
    Then later you write:
    “Intel does have a social responsibility to stop promoting totalitarian regimes …”
    Carefully read, both these statements could be interpreted as “totalitarianism” based on what you wrote in your post. By writing that Intel – and corporations by extension – have limited moral and ethical responsibilities you are indeed making a moral/ethical statement on behalf of corporations. Are you not? How is this not what you describe “totalitarianism”? I think we see this issue more similarly than differently. Or am I missing something?
    Another great thing about Intel (I love working here) is many of us employees, through Intel’s benefit programs, have the opportunity to become company shareholders, which means we are included in that group you say owns this corporation. I agree with you m’Lord: as an agent of Intel working in CSR it IS my job to protect other people’s interest. I can think of no better place to do that than from the perch of CSR.
    I ran into a colleague of mine in the cafeteria one day and when I told him what I did, he said “wow, you are way up on Maslow’s hierarchy of needs for Intel. You’re working on forming Intel’s conscience!” While he may have stretched the Maslow analogy, I do agree with him. CSR is not only about protecting people’s interest in the company, it’s also about growing the value of that interest in the context of an increasingly enlightened global consumer who wants to feel good about his or her purchases.
    I do relish a vigorous sharing of opinions around CSR because it helps make definitive what could be a murky concept. Murky concepts are prone to being abused and being used in abusive ways. Thanks for participating so fervently in our blog!

  10. Lord Volton says:

    “Carefully read, both these statements could be interpreted as “totalitarianism” based on what you wrote in your post. By writing that Intel – and corporations by extension – have limited moral and ethical responsibilities you are indeed making a moral/ethical statement on behalf of corporations. Are you not? How is this not what you describe “totalitarianism”? I think we see this issue more similarly than differently. Or am I missing something?” – Perry
    Because corporations are viewed as individuals in the eyes of the law for taxation purposes you’ve asked the reader to consider what rights a corporation has vis-à-vis a living, breathing human being. I’m willing to accept that premise, but even if I wanted to quibble with it a corporation is nothing more than a collection of individuals so the net result ends up being the same.
    So what moral or ethical obligation does a corporation or an individual have toward everyone else? That is what we’re trying to figure out. Presumably this is also a key issue for Intel’s CSR department. And my opinion on the matter or yours is not the determining factor. Everyone has their personal feelings on the subject, but I believe what is relevant is the bare minimum.
    So what social contract do we have as human beings living in the United States?
    Rather than accepting nebulous concepts of social duty that can be easily abused for selfish gain, as you correctly point out, the Declaration of Independence makes it crystal clear what we can minimally expect from a fellow human being. And that is to respect others inalienable rights. The “natural laws” that all men enjoy regardless of whether they’re U.S. citizens.
    “We hold these truths to be self-evident; that all men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are Life, Liberty and the pursuit of Happiness.” Declaration of Independence, July 4th, 1776
    A corporation should not be held to a higher standard than what the entire nation itself is asked to uphold. They don’t need to be saints. If they choose to be saints that is the prerogative of the shareholders who might agree by majority vote. But what should the rest of us expect from all corporations on the social responsibility front?
    Even those of us who don’t own a single share in those corporations.
    We may not agree on whether they should feed the sick – but we’re all bound by the Declaration of Independence that formed this country and from which all other documents flow. If our government consistently violates the inalienable rights of its citizens the Declaration of Independence directs the people to alter the government or abolish it altogether. It’s taken very seriously.
    “That to secure these rights, governments are instituted among men, deriving their just powers from the consent of the governed. That whenever any form of government becomes destructive of these ends, it is the right of the people to alter or abolish it, and to institute a new government, laying its foundation on such principles and organizing its powers in such form, as to them shall seem most likely to effect their safety and happiness.” Declaration of Independence, July 4th, 1776.
    What if a corporation does it? Should we simply turn a blind eye to it and say it’s okay?
    I believe Intel is held to this minimum standard and found wanting. I am not saying Intel needs to donate money to the Mayo clinic, since that is an unreasonable standard and goes beyond what is minimally expected of an individual. But a corporation that assists totalitarian regimes that enslave and murder its people should be held accountable.
    Such a corporation is being socially irresponsible and violative of the very principles upon which this country was founded.
    In the same way a United States citizen who assists in a crime is guilty by association. For example, if someone robs a bank and then comes to your house to hide from the police that is a felony as well. When an individual knowingly assists others who are criminals they become a criminal.
    All of us remember Tiananmen Square and the Chinese military quashing freedom of speech. And we’ve seen what Yahoo has done in China by providing the names of journalists to the Chinese government who ultimately arrested and imprisoned those journalists. All of whom sit in prison cells today.
    And then there are those who were simply murdered for their political or religious beliefs in China.
    Any foreign corporation that wants to work closely with a totalitarian government is guilty by association. How many journalists need to be wrongfully imprisoned or dissidents put to death before Intel accepts any responsibility?
    Ford Motor was just trying to make a buck in Nazi Germany. Even if it meant using slave labor. They had a strong profit motive, but their desire to get rich is checked by our inalienable right to life, liberty, and the pursuit of happiness. And for that reason Ford Motor should have been shut down or its leadership replaced.
    See: http://www.bulldognews.net/issues_ford_slave_labor.html
    If Intel could abide by the minimum standard set forth in the Declaration of Independence I would be very surprised and pleased.

  11. Perry Gruber says:

    Well, I still think we agree more than disagree. I’m not suggesting Intel needs to be a saint. As a CSR practicioner, I do have a moral “bar” that is higher, I think, in terms of what corporations should be doing.
    I truly don’t have enough data on China to contest your point of view there. I am familliar with the Ford issue, however. I can get pretty black and white about things, so I’ll need to defer on that subject lest I get carried away. Great conversation. Thanks for the intellectual stimulation.

  12. Lord Volton says:

    Peter,
    Listed below are some wikipedia articles to assist you in your research on China. I think you’ll find the actions of Yahoo, and their leader Jerry Yang, particularly reprehensible.
    However, Intel has been beating the China drum for decades. You have to wonder what Intel’s CSR people are doing if not calling attention to the human rights atrocities in China rather than scheduling their next promotional trip to Beijing?
    For an irony of ironies if you go to the Intel’s China page you’ll see a link to Intel’s 2005 Corporate Responsibility Report. I’ve reviewed the document which is heavy on “environment” and “community” but completely lacking in the minimal requirement(s) of CSR: life, liberty, and the pursuit of happiness.
    Intel cannot talk about how it promoted, or at the very least didn’t collude with others to prevent, liberty in China. Why? Because liberty isn’t something the Chinese government wants for its oppressed population. However, it’s great to have smart people working for cheap. Even if those workers do not have any of the basic human rights we enjoy and believe are “inalienable” and flowing from the “Creator”.
    Intel is in China because the labor is cheap and the market is huge. And they’re willing to insult our intelligence with their CSR reports, meanwhile they operate in a country where their employees can be arrested and imprisoned for simply sharing their views.
    China is a totalitarian regime and oppressive. It’s leaders are corrupt and willing to murder people to keep the masses in check. If I were an Intel employee in China sharing these views you can bet that eventually I’d be talking to myself in a prison cell or pushing up daisies.
    And that’s why Intel’s CSR efforts cannot be taken seriously.
    Wikipedia articles:
    http://en.wikipedia.org/wiki/Wang_Xiaoning
    http://en.wikipedia.org/wiki/Shi_Tao
    http://en.wikipedia.org/wiki/Tiananmen_Square_protests_of_1989
    http://en.wikipedia.org/wiki/Human_rights_in_the_People%27s_Republic_of_China
    Intel’s involvement in China:
    http://www.intel.com/community/china/index.htm
    Another interesting article:
    http://www.voanews.com/english/2007-07-31-voa18.cfm