Corporate Philanthropy: A Deep Dive into Socially Responsible Business

This essay delves into the concept of corporate philanthropy as a crucial component of socially responsible business practices. It begins by defining the business organization as a system utilizing various resources to achieve predefined goals, emphasizing that modern businesses should prioritize giving back to society, the source of these resources. The essay then explores Corporate Social Responsibility (CSR), its evolution, and its impact on organizational behavior, highlighting its multifaceted nature. The core of the discussion revolves around the philanthropic dimension of CSR, where businesses contribute to the community and improve living standards. Through examples like Cisco Systems and Nissan Motor Corporation, the essay illustrates how corporate philanthropy can enhance a company's image, reputation, and competitive context. The essay also covers strategic philanthropy, including employee contribution matching and volunteer grants, as exemplified by Apple and Wells Fargo. Finally, the essay concludes by emphasizing the importance of corporate philanthropy in building trust and improving business performance, while also acknowledging potential limitations such as transparency issues.

RUNNING HEAD: Business and Society
Business and Society
Philanthropy as a Socially Responsible Business Activity

Philanthropy as a Socially Responsible Business Activity 1
Business and Society
Business Organisation can be seen as a system where various resources are used for
the purpose of attaining some common predefined goals. These resources can be of many
types such as human resources, money resources, raw materials, land and many others. These
resources are utilised to produce something valuable namely product and services, and they
are exchanged for monetary value. This monetary value is used to repay the cost of resources
used and the excess value is kept with business organisation as profit. Conceptually, business
organisation is a mechanism of performing economic activities. (Stimpson & Smith, 2015)
This concept worked well in past decades. But, in recent business arena, wealth maximisation
is not considered to be the only objective of any business organisation; Business organisation
should focus on giving back to source of these resources used, in a proper way. This is about
giving back to the society which is predominantly the source of all the resources used in
business. Giving back to society by a business organisation is the principle outline behind
being socially responsible (Chernev & Blair, 2015).
Concept of Corporate Social Responsibility (CSR) has gone through a long evolution
period and it has a strong impact on image of the organisation in the society. It impacts
organisation behaviour in particular the way business operates. Many experts discussed and
defined concept of CSR in different ways. CSR is the commitment of any business
organisation to contribute in economic development of society within which it operates, helps
in improving living standards of their workforce; and at large for the betterment of local
communities and society (Tai & Chuang, 2014). It assumes that a business organisation
which is responsible for its financial performance, in the same way it is also responsible its
society and environment. In overall sense, CSR is the way to create a positive impact on the
society in which it operates. It describes that responsibility of business organisation is not
range bound to superior financial performance, but it is wider in contributing towards better
society and cleaner environment. In this context, business organisation must consider three
bottom lines for their balanced performance. First bottom line is corporate profit which is the
profit and loss generated through business operations; Second bottom line is “people
account” which is the measure of how socially responsible a business organisation is; and
third bottom line is “planet account” which measures the responsibility towards environment
(Glac, 2015).

Philanthropy as a Socially Responsible Business Activity 2
To become a good corporate citizen, every business organisation should consider its
approach towards CSR in a significant way as this concept is gaining importance in present
business environment. Business organisations have certain obligations; social responsibility is
one of the most important of them. Being socially responsible means, a business organisation
is having positive impact on its stakeholders namely owners, customers, suppliers,
government, employees, society and environment. Concept of social responsibility can be
discussed through four broad dimensions, namely economic, legal, ethical and philanthropic
(Chernev & Blair, 2015).
Philanthropic dimension of CSR by any business organisation includes its positive
impact and contribution towards local community and society at large. Through philanthropy,
business organisation can improve living standards of its employees, customers and of overall
local community (Porter & Kramer, 2002). It also helps in decreasing involvement of
government in charity programs to help people in society. Through philanthropy programs,
business organisation can improve morale of its employees; also building leadership quality
in volunteering employees can be implemented. Experts argued that through corporate
philanthropy some business organisations tried to increase social impact as well as economic
goal in long term planning horizon. This concept of “Context Focused Philanthropy” has
been well adopted and practiced by a large number of big and well-known corporates. In this
aspect, Cisco System is a good example. It has invested a huge amount in its ambitious
socially impactful education program. Through this program, they trained computer network
administrators who are high school graduates; these graduates became job ready and they
became trained human resources for Cisco. Cisco Networking Academy, the corporate
philanthropy program of Cisco worked beneficial for itself and also benefitted local
community at large. Through times, business experts commented and suggested that
philanthropy dimension of CSR can improve competitive context of business organisations in
a cost effective way (Porter & Kramer, 2002).
Through corporate philanthropy, business organisations use its corporate resources for
doing well to society. These activities should not be within the near scope of business
operations and should not provide any direct benefits. Another group of experts stated that a
company can improve its own corporate image and reputation. It includes business firms’
contribution regards to financial resources and time of executive for making contribution in
arts, education at larger local community space. It will certainly help business organisations
to work for society but it is regarded as voluntary. It can be suggested that corporate
philanthropy is the way through which a business organisation can associate itself with the

Philanthropy as a Socially Responsible Business Activity 3
society in which it operates. With the time, leaders of well-known business organisations
considered corporate philanthropy as viable strategic choice in planning for their marketing
strategies. Organisations are planning their related strategies in such a way that these
programs can contribute positively in developing brands, enhancing recognition in market
and creating positive customer viewpoint (Weeden, 2011).
In this aspect, Nissan Motor Corporation is an example for all other internationally
renowned companies. It has adopted their corporate philanthropy under “Distinctly Nissan”
and making social contribution in areas like education, environment and providing
humanitarian support. Nissan is working closely with many non-profit organisations and non-
governmental organisations to make effective social contribution. Nissan has contributed
approximately 1.6 billion yen in financial year 2016 (Nissan Blue Citizenship, 2017). Nissan
has primarily focused their priorities on environmental aspect; they are educating future
generations about environmental issue in countries like Japan, China, U.K. and Spain. Nissan
has also made investment in education area to run educational programs to provide education
to children and young generations in countries like Brazil, Australia, U.K. and China. In their
humanitarian support, they have provided support in terms of providing monetary support,
assistance to victims to areas which are majorly affected by natural disasters. In Kumamoto
earthquakes, Nissan has provided 100 EVs free of cost to support swift relief work. During
forest fire in Chile, Nissan has supported relief work through providing vehicles. Since 2007,
Nissan has made number of school visits in U.K., China and Japan to share car manufacturing
knowledge base. Through “Nissan Waku-Waku Eco School”, Nissan is positively
contributing towards global environmental issues. In education area, Nissan has donated near
about 220,000 copies of children story books and picture books in various schools, libraries
nearby its offices. Nissan South Africa is working to provide support for mobile eye clinic.
Nissan Global Foundation is working to provide better education globally (Nissan Motor
Corporation Sustainability Report, 2017).
Studies shown that through social investment, business organisations can achieve
stakeholders’ engagement and also manage risk strategically. Now, business organisations
have shifted their vision from traditional philanthropy to strategic philanthropy. In modern
arena, global companies are following two important ways to do corporate philanthropy. The
first one is business organisations are matching their employees’ contribution and providing
donations to eligible non-profit organisations. This act is increasing the total value of
contribution. Apple is an important case in this context. Apple has matched $25 million of
employee contribution for donation and which resulted in total $50 million of donation for

Philanthropy as a Socially Responsible Business Activity 4
charity work around world. This act is internally acclaimed and appreciated; as a result Apple
has got a good corporate image. The second one is when employees of business organisation
donate their working time to non-profit organisations, and then it becomes volunteer grant. In
this aspect Wells Fargo has contributed total $25 million to NeighborWorks which is a non-
profit for the purpose of supporting financial education and paying down-payments for
purchasing homes. Also it has allowed their interested employees to receive two days of paid
leave to volunteer in any non-profit as per their convenience and choice (Inside Philanthropy,
2017).
PepsiCo, a global food and beverage giant has priorities it corporate philanthropy
program for empowerment of women, sustainable agriculture, providing clean water,
employability programs and any more. “PepsiCorps” has placed PesiCo employees in
countries like India, Ghana and New Mexico to work in its corporate initiatives. It has started
“Food for Good” and since 2009 it served 1.6 million food to inner-city children (PepsiCo
Global Citizenship, 2017).
In conclusion, it can be said that corporate philanthropy has narrower scope that
corporate social responsibility. It is one of the way to giving back to society in which a
business organisation is operating. Through corporate philanthropy, business organisation
and its employees can contribute towards society and business organisations become
responsible toward local community. This way companies can develop and improve citizen’s
trust. In long run, these programs and initiatives will increase business organisations’
credibility and performance (Wang et al., 2016). When a business organisation is permitted to
operate in a society and also permitted to use the resources from the society, then are
expected to do good for that society. Some experts found some limitations attached with
corporate philanthropy such as transparency issue, ranking of certain activities,
managements’ involvement which can weaken the purpose of philanthropy (Gautier & Pache,
2015).

Philanthropy as a Socially Responsible Business Activity 5
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