Giving Back and the Value of Strategic Corporate Philanthropy

by Cliff Kurtzman
Executive Director, MyCityRocks.

Cliff Kurtzman

Many of us feel that we have a responsibility to help create opportunities for those with the potential to excel but lacking the resources, and to use the fruits of our success to help build a better world for future generations. We do this in our personal lives, and we do it in through the corporations with which we are involved. We do it not simply out of altruism, but because we know that we and our children will benefit, and because only our collective goodwill can solve problems that might affect our lives and the lives of those we care about.

But according to Community Wealth Ventures, Inc., "United States corporations annually give away over $11 billion dollars to nonprofits, or 1.3% of pre-tax income. Many corporations, however, do not give their money strategically. Philanthropic donations provide a useful, though seldom fully leveraged, channel for improving outcomes for both the community and the corporation."

While corporate philanthropy provides a mechanism whereby businesses and organizations can contribute to and help the communities which have made them successful, and can also provide a powerful mechanism for fostering social change, a great deal of corporate money that is contributed to charity brings little societal value or value to the contributing business. Often, rather than being strategically driven, it simply becomes an unstructured outlet for giving money to a pet project. Further, with increasing globalization and the rising number of multinational corporations, corporate community involvement programs become increasingly complex, often needing to transcend geographic and cultural boundaries. The reality is that the value that corporate philanthropy brings an organization can be magnified considerably if it is done in a planned, strategic and considered manner.

HP Chairman and CEO Carly Fiorina articulated this philosophy well in a speech she gave in Houston on September 25, 2003 at the Houston Technology Forum:

"HP in all of our legacies has always believed that giving back to the community is part of our responsibility. It is part of who we are... I think that giving back to communities, making a positive difference in communities, and reaching out and engaging those that are underprivileged or underserved or underaccessed is not just the right thing to do, is not just a good thing to do, it is not just something that makes our hearts feel better. It is a smart business thing to do. We are a technology company. Innovation is our life's blood.

"And today when we look out into the world we see that only 10% of the world can buy our products. We see that unless we educate and excite more minorities and more women about the possibilities of technology, and get them engaged in science and engineering, then we will not have enough qualified engineers to do the work that we need to do here to help our company grow. In other words, giving back to the community, and reaching out and creating opportunities through the power and possibility of technology for those who are underprivileged or underaccessed or underserved is a smart business thing to do because those same people someday will be our customers, our partners, our employees."