Corporate Philanthropy

Philanthropy is the charitable giving of private money for public purposes, and corporate philanthropy is the practice of giving by private companies and corporations to charitable causes.

There are several methods of charitable giving, some focusing on donations from employees through methods such as payroll giving, but the term “corporate philanthropy” more normally refers to charitable giving by companies from the corporate profits, either out of a central fund or via a dedicated trust.  For more of a corporate philanthropy definition, look here or on the excellent website of the Giving USA Foundation.


What motivates corporate philanthropists?

Corporate philanthropy is a great way of donating to charity, as it allows a company to direct its contributions toward causes and projects that are of special interest to its members and shareholders.  For larger corporations that are able to set up their own trusts, this advantage is magnified. 

In addition, corporate philanthropy can serve to further a company’s core values, aligning its charitable activities with causes and social issues that reflect its concerns and ideals.  This “strategic philanthropy”, also known as “venture philanthropy”, is part of the corporate philanthropy definition. 

Finally, companies naturally have one eye on adding value to their businesses and boosting their corporate profiles, and philanthropic initiatives can play an important role in this.



Where do they choose to donate their money?

There are as many areas for corporate philanthropy as there are charities and causes to donate to, so it is really for the individual company to decide where they will target their donations.  Some firms may simply choose to give money to established charities, safe in the knowledge that their funds will go to a good cause.  Additionally, larger companies may set up trusts to administer funds on their behalf, which will invite charitable organizations to apply to them for funding and sponsorship for their projects and activities.

Another part of the corporate philanthropy definition is “creative philanthropy”; something that more and more businesses are getting involved in.   It involves supporting change-makers and trying to improve society while bypassing traditional means of social change such as government aid programs. 


Who, within a company, decides whom to donate to?

In some companies there is one dedicated giving officer or director of corporate giving that makes all the decisions on corporate philanthropy, answerable to the CEO or board of directors.  More typically, particularly in larger companies making bigger charitable donations, a committee will be set up to adjudicate on requests and funding proposals, and disburse funds accordingly.  It is a good idea to make membership of this committee as inclusive as possible, including not merely executives and managers but staff from all levels of the company, thus helping to spread ownership of the company’s strategic philanthropy throughout the firm.

Whoever is responsible for the decision-making process in the company, it is important to have clear written policies and guidelines on what sort of organizations a corporate philanthropy program will be giving to so that potential recipients are clear on what is eligible for funding.  It is also important to keep careful records of all corporate philanthropic activities for tax purposes.


Do corporate philanthropists donate anonymously or publicly?

The decision on whether or not to publicize donations made under corporate philanthropy programs is entirely up to the individual company, subject to the obvious provision that donations will need to be listed in company accounts just like any other company outgoings.  Some corporate philanthropists do indeed prefer to keep some or all of their charitable work private, or to give anonymously. 

That said, there is an obvious benefit to a company in making its corporate giving public.  Apart from the obvious desirability in terms of accountability to shareholders, it does a company’s public profile no harm at all for customers and the public to be aware of its charitable activities.  Corporate philanthropy is an effective tool for helping to communicate a company’s core values and strategic vision beyond its immediate clients and business partners, and is one of the best ways of getting your message across to a wider audience. 

In the modern media there are, sadly, all too few positive news stories about private corporations, and it does no harm to publicize the good things that companies do in the course of fulfilling their social responsibilities.


Where can I find more information about corporate philanthropy?

There are several websites and organizations that can be invaluable for those who wish to find out more about corporate philanthropy.  The Council on Foundations is a membership organization of more than 2000 grant-making foundations and charitable groups that provides legal advice and professional expertise to philanthropic initiatives, whether corporate or otherwise.  The Foundation Center is a useful resource for charities or voluntary organizations that may be looking for sources of funding for their activities.  Finally, The Giving Forum has some useful links and advice for corporate givers, making this another useful website to check for more information on this fast-growing trend.




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