Strategic Philanthropy essentially refers to the practice of corporations by which they target their charitable and philanthropic activities around a specific social issue or cause as a measure to support their business objectives or goals and also help the society in some of the other way.
Various studies on consumer behavior reveal that today, more than ever, consumers notice a company’s social ethics or principles before purchasing products and services from it, they prefer to buy goods from a company that’s associated with a good cause.
Most businesses are aware of society’s expectations and this is what persuades them to engage in some kind of philanthropy or charity. Strategic philanthropy presents itself as a more attractive and effective option to conventional CSR strategies. Strategic philanthropy is CSR (Corporate Social responsibility i.e. the ideal practice of evaluating the practices and outcomes of businesses’ relationships with people, organizations, institutions, communities, societies, and the earth as a whole.), where the company is empowered to work for the society by ultimately working for itself which results in the increase in goodwill in the marketplace. The first step in the process includes the identification of an appropriate cause with which the company can engage, one that is closely related to the core business of the firm.
For all the companies, ranging from small start-ups to large corporations, strategic philanthropy represents a great opportunity to extract goodwill and earn a positive image in the immediate market through CSR. It acts as a positioning that connects your company with a not-for-profit organization or cause. In this way, while you are being courteous and working for the common good in your community, your business is receiving parallel benefits including exposure, lead generation, employee retention and increases in performance and productivity. They can even include benefits to your bottom line.
Strategic philanthropy can also be useful in distinguishing your business from your competitors, most of whom are probably stuck in old “business as usual” models or standards. It originates from an entrepreneurial view of foundation activities which focuses on striving for effective contributions to social change. Strategic philanthropy involves institutions driven by:
- a vision of the desirable society of the future,
- a concern for the effectiveness of their philanthropic endeavors and
- the insight that philanthropy provides for investment in the production of public goods, preferably aiming at
- innovations or increased effectiveness.
The type of giving, commonly known as strategic philanthropy helps the society as a whole and enhances the company’s reputation with the customers. Strategic philanthropy isn’t about disguising self-serving activities under a veil of good intentions or adopting a cause merely to sell products. It’s about showing consumers that your company cares about its community.
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