In response to our post about corporate philanthropy and consumer confidence, we had a reader voice their opinions about corporate philanthropy and if it is actually doing our society any good, or just covering companies overhead costs for their foundations or initiatives. To paraphrase what our reader voiced, was the fact that often times the cause marketing and advertising of the corporate philanthropy that we as consumers see in the media today can be very misleading. His main concern was that we are not holding corporations accountable for how their philanthropic money is being used, and that much of it is going to overhead costs of corporate owned foundations, rather than directly towards the causes that they support. Our reader has a strong point and brings up a big issue in terms of how do we hold corporations accountable for the charitable actions that they are giving to the community, and if it is really solving the issues that the corporations are toting.
In trying to learn more about this issue I came across an article by Mara Einstein, author of Compassion Inc.: How Corporate America Blurs the Line Between What We Buy, Who We Are and Those We Help. One of the main things that she pointed out was that it is no longer good enough to just attach a “charitable cause to all of our purchases”. What she means by this, is that although there is some merit in donating based on the purchases that a corporation receives for a particular product, it is not generally a sustainable way to do business or to maintain substantial help for the charity that they are donating to. Not only that but with the community as a whole, this is not solving a problem, it is merely putting a band-aid on it and hoping it stays for the long haul.
What these campaigns are lacking, is a few things. The first is that it leaves it up to the corporation to decide what charity or cause it is going to donate to. The issue with this, as described above, is the fact that the general consumer does not where these funds are going and how they are being used. Another problem with this is that it is not always the case that the corporation is picking the charity or cause that is most popular with their consumers. Leaving their needs unresolved. Another issue with this type of social marketing is in the way the product is produced and the level that which the corporation is pressured to improve upon their product or service to make it more sustainable. It is true that the corporation may see an increase in sales due to putting a donation behind their product, but it does not actually solve the causes that it says to be fighting for. What it is actually doing, is throwing money on a fire and hoping that it blankets it enough to stop the fire all together. The issue with this, is that these causes and those that work for the causes aren’t always the most efficient with this money, nor does the money go directly towards preventing the issue. Instead it is used to mask the problem.
There is a better way to do this. As Mara points out in her article management of these companies do not have enough incentive to actually prevent these social scars. Instead they are often incentivized to make the company as profitable as possibly to reach their bonuses. Mara declares that they should also be held to qualitative measures of performance, but quantify them so that it is directly measurable, such as how many people’s lives were directly benefited due to the donations, or how many less outbreaks of malaria there were compared to the previous year, that was directly related to their giving. If they do not meet these goals, they should not be able to receive bonuses. This is a way of finding a means to an end, not just consistent cover up of a problem.
Management also needs to realize that this does not just come from them, but all of their associates as well. Any person can have a great idea that optimizes a particular product or service and makes it better for our communities. CEO’s and presidents need to understand that one of the greatest resources they have in their company is the minds of those that they employ. Not only that but creating programs or incentives for your associates to volunteer and donate their time in an effective manner can go a long way. As I described in earlier articles, time and personal contact can mean the difference between a succeeding non-profit, and a struggling one. However, these companies need to assure that their foundations and employees are in fact doing what suits them best. The Home Depot Foundation should not be volunteering to help do micro financing, nor should Quick Books be trying to build houses or structures.
Corporations and those that run them need to realize that although money can help particular initiatives, other aspects can go a long way. Examples of this would be donating actual products to a non-profit, like Lowes giving tangible resources like sand bags to aid in disaster relief after a hurricane, or a playground company donating equipment to be built at a near by park in a struggling neighborhood, or HR Block giving their time to help a struggling non-profit complete their taxes, or Target donating school supplies to underprivileged children to help their education. Money is not always transparent, but the time and resources that we give is, which is good for not only the causes that are receiving these products, but for the companies PR, as consumers are able to see what exactly the money that they purchase with is going to. Unfortunately, as it stands now, tangible supplies like that, are what the top Fortune 500 companies give the least of, which isn’t much when they are only donating .11% of their revenue to such causes each year. At this time what we really need is a whole host, of many strong willed, and devout corporate citizens to make a change in our society.
We at FuzeUs hope to solve that with our website and applications, but will need the help of others to make sure that we are holding true to our word and properly serving the community that we set out to benefit.