How do companies maximize the return on corporate philanthropy?

Résumé du document

Corporate philanthropy has been a common phenomenon for the last 50 years. After the mid 1990s, companies began to increasingly align their philanthropic programs with their business interests. This resulted in a convergence of social and economic objectives, introducing the practice of strategic corporate philanthropy. The question that arises in the wake of this new phenomenon is about assessing the returns on the contributions companies make towards philanthropy. This thesis investigates the return on corporate philanthropy for companies, and studies how this return can be maximized. A vast range of literature on corporate philanthropy is discussed. In chapter 5 this theory is compared with the philanthropic program of Shell. This comparison helps us conclude that the philanthropic program of Shell corresponds to strategic corporate philanthropy, as discussed in the theory. The returns on philanthropy can be maximized when consumer loyalty, reputation and employee commitment are enhanced. Besides, cooperation with other organizations, and the international character and duration of the program also influence the returns on corporate philanthropy.

Extraits

[...] The value of these business opportunities should be valued by the profit it generates, instead of the social benefits.” Conclusion Despite the fact that the literature is outdated, within this thesis, philanthropy as an investment can be seen as a probable trend in corporate philanthropy. Nevertheless, this paper relies on strategic corporate philanthropy as the most important trend in corporate philanthropy, since literature on this topic is more up to date What is the return on corporate philanthropy? 3.1 Introduction Within the literature on corporate philanthropy, many researchers have tried to explain the giving behavior of firms. [...]

[...] Employees play an important role in the projects, especially in projects executed by the company itself Research question Does the theory on philanthropic donations match with practice, thus philanthropic contributions made by Shell? The term social investment Shell applies is, within this thesis, replaced by strategic corporate philanthropy. It can be concluded that the main part of Shell's philanthropic program corresponds with what is stated in the literature. Shell faces the same return on philanthropy as theory mentions. Besides this, Shell also sees relation gifts and discounts on tickets as a return. [...]

[...] Rindova The road to transparency: reputation management at Royal Dutch/Shell, in The expressive organization: linking identity reputation, and the corporate brand Friedman, M. and Friedman, R.D Capitalism and Freedom. Chicago: University of Chicago Press Friedman, M The Social Responsibility of Business is to Increase Its Profits. The New York Times Magazine, September 13. Glazer, A. and Konrad, K.A A signaling Explanation for Charity. The American economic review, vol p. 1019-1028 Griffin, J.J and J.F. Mahon The Corporate Social Performance and Corporate Financial Performance Debate and Corporate Financial Performance Debate: Twenty five years of incomparable research, Business and Society, vol p. [...]

[...] From this point of view, it can be concluded that the theoretical foundation for strategic philanthropy is the resource-based view. The resource-based view identifies firm- specific resources for each firm. These resources can be tangible (fixed assets, capital etc.) or intangible (reputation, patents, know how etc.). Resources that are valuable, rare, inimitable or non-substitutable provide the company a sustained competitive advantage via increased revenues or reduced costs (Barney, 1991). Philanthropic contributions serve as strategic resources for corporations (Haley 1991), and could be used to create a competitive advantage (Porter and Kramer, 2002) Conclusion To answer the research question: what is strategic corporate philanthropy? [...]

[...] Existing literature, however, has found some other suggestions companies can use to maximize the returns on philanthropy. These general suggestions are treated in this section. Cooperation Porter and Kramer (2002) underline the effects of cooperation between companies within the field of philanthropy. By tapping each companies distinctive expertise, the collective return can be enlarged, and become far more effective than a contribution by one company. Companies can work directly with nonprofits and other partners to facilitate global knowledge transfer and coordinated implementation of new social initiatives. [...]