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CORPORATE GIVING – Whatever You Call It, It’s Not Philanthropic

Resource Center - Foundation

Brad OffmanThere are many myths and erroneous assumptions about how corporations manage their community investments.  The first myth (and probably the most important one to dispel) is the notion of corporate philanthropy—that corporations are philanthropic entities and share human goals and ideals.  The faster we dispel that myth, the sooner we will understand the true essence of corporate community investment.

Corporations are not philanthropic.  They are not looking to make a difference in the world through their community investments (I am using the word “philanthropic” in its truest sense – loving humankind). 

In saying so, I am not making a value judgement about corporations, especially large multi-layered corporations.  Corporations have an incredibly important role to play in Western democracy and capitalism. 

But a corporation is not a living, breathing entity.  It cannot be good, any more than it can be evil.  Its stakeholders (management, customers, employees, shareholders) all play key roles in shaping corporate actions but it is important to remind ourselves that corporations cannot have feelings. Thus, their giving cannot be motivated by genuine philanthropy. 

We use many terms to discuss corporate giving.  Most of this terminology fails to accurately describe how corporations make social investments.   Corporate philanthropy (too paradoxical), corporate social reasonability (too broad), community affairs (too vague) are all laden with shortcomings.  For the purpose of this article (and future articles in this series), I will use the term “community investment” to describe corporate giving.  It is a clear and relatively straightforward, and I’m not sure there is a better one.

The extent of corporate giving in Canada is often overstated.  Collectively, corporations in Canada gave $2.3 billion in 2009, although this figure is admittedly inaccurate due to inconsistent reporting tendencies on the part of corporations (Ayer, Imagine Canada, 2009). Compared to individuals (who give over $10 billion annually), corporations aren’t big financial players but since their gifts are often large, multiyear commitments, they get more than their share of the spotlight.

The fact that corporations cannot be inherently philanthropic means that their giving cannot be motivated by altruism, faith, empathy or other decidedly human emotions.  This fact is critical.  Charities need to understand donor motivations in order to successfully appeal to the donor’s willingness to give.   The end goal?  Long-term, sustainable and lucrative partnerships between the corporate and charitable sectors.

Brad Offman is founder and principal of Spire Philanthropy and former senior vice president, strategic philanthropy at Mackenzie Investments.  Brad is also former president of the Mackenzie Investments Charitable Foundation and managing director of the Mackenzie Charitable Giving Fund.  Prior to joining Mackenzie, Brad served as vice president, development at the Toronto Community Foundation. Contact him, brad@spirephilanthropy.com.



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