Essay Corporate Giving

Submitted By jrouhani
Words: 1533
Pages: 7

Corporate Giving:

Before I attempt to answer these question on corporate giving base on my research-here are some personal thoughts. I believe that personal giving should come from the heart and be for sole purpose of helping someone in need, being socially responsible. This however is not the reason most of us give to charities. The act of giving itself is satisfying to most of us, it satisfies some of our most undesirable characteristics. It makes us feel good, it approve our superiority, success, and status in society. It also has financial benefits in the form of tax deduction. So, charitable giving helps the donor more than the recipient.

Corporate giving or as newly termed, corporate philanthropy, has been around since mid-1800’s. Initial corporate giving was started by men and women who created companies and invented products, and held strong beliefs about helping certain aspects of society in the United States. Later big public corporation with chief executive officers designed formal programs designed to give back to communities, often called corporate foundations. The newest terminology used by corporations that describes their charitable giving is “strategic philanthropy," which examines the business interests of the corporations and the needs of communities. The idea of “corporate social responsibility” is also newly adapted by some corporations. This approach offers a holistic view of how companies operate and whom they serve, and how corporate philanthropy fits within a company's overall structure and philosophy.

Corporation give to charitable nonprofit organization in the form of cash, foundation grants, stock donations, employee time, product donations, and other gifts in goods, and human resources. Not for profits and other humanitarian organizations count on these donations to support their day to day function. Corporations gave approximately $14.1 billion to a wide array of nonprofit organizations in 2009. The main reasons for corporate giving can be summarized as follow:

The belief that companies have a moral obligation to assist the communities. Corporate support of local causes improves the quality of life in communities where the company does business.
Charitable contributions can increase the name recognition and reputation of a brand or company among consumers. There is academic research showing a positive association between socially recognizable and responsible companies and their economic success. Companies with strong social performance tend to have strong financial performance.
These contributions help managers build relationships with government officials and community leaders and can reduce regulatory and special interest group obstacles.
Contributions can stimulate innovation as grants to universities and other organizations provide companies with new ideas, access to technical expertise, and opportunities for research and development collaboration.
Charitable contributions can financially benefit the company. Companies use corporate giving as a form of wealth distribution taking advantage of tax deductions and tax exemptions to improve their overall profit.

The majority of corporate contribution are to small local nonprofits like colleges, churches, and other humanitarian or community based organizations. Most of these programs are diffuse and unfocused. The problems with corporate giving is that most consist of numerous small cash donations given to aid local civic causes or provide general operating support to universities and national charities in the hope of generating goodwill among employees, customers, and the local community. Rather than being tied to well-thought-out social or business objectives, the contributions often reflect the personal beliefs and values of executives or employees. Indeed, one of the most popular approaches—employee matching grants—explicitly leaves the choice of charity to the individual worker. Although aimed at enhancing…