Should philanthropy be truly selfless?

Opinion: At a time when our daily news is full of stories about communities in need, the international impact of the refugee crises, and child poverty closer to home, why are businesses giving less?

Philanthropy New Zealand’s recent report, Giving New Zealand: Philanthropic Funding 2014, shows that corporate philanthropy is down, suggesting kiwi businesses simply aren’t as generous as they were. The Harvard Business Review was saying the same thing about US corporates almost 15 years ago.

At a time when our daily news is full of stories about communities in need, the international impact of the refugee crises, and child poverty closer to home, why are businesses giving less?

In 2002, in the Harvard Business Review, Michael Porter and Mark Kramer put it down to executives finding themselves in “no-win” situations; “caught between critics demanding ever higher levels of corporate social responsibility and investors applying relentless pressure to maximize short-term profits.” They claimed that “justifying charitable expenditure” was becoming near impossible.

Philanthropy New Zealand’s report, published in December, showed the Christchurch earthquakes caused a massive spike in the number of kiwis giving generously, including businesses, and – as individuals we’ve continued to do so ever since. Corporate giving, however, has dropped off by 22 per cent.

Our society needs more corporate giving. And when companies get it right, the pay-offs are great and help drive success - improved staff engagement, increased productivity, better customer satisfaction and positive brand recognition.

Arguably, giving in the immediate aftermath was extraordinary and we’ve now returned to normal, yet still acceptable, levels of giving. Or does the decrease in corporate giving, as Porter and Kramer suggest, signify that businesses have run out of ‘win-wins’ and bowed to the pressures of investors and sceptical media?

Christchurch’s earthquakes prompted action for the right reasons – the impact felt painfully close for practically all kiwis. Businesses, organisations and individuals jumped into action offering aid, resources, funding and support in many guises: Power companies waived bills and reconnection fees; retailers encouraged employees to stay with their families on full pay; and petrol companies donated IT equipment and facilitated public donations to the earthquake appeal.

I know the commitment, care and goodwill demonstrated by New Zealanders and New Zealand businesses wasn’t fuelled by commercial gain or a ‘strategic philanthropy’ plan. It was motivated by genuine concern for staff, customers and the communities that our businesses are part of.

Were our responses shaped by how our people, customers and stakeholders would perceive our responses? Absolutely. Businesses taking action prompted positive reactions from customers, employees and the community alike. The reality for businesses is we need to be sustainable. We need to survive, generate revenue and grow. To do this, we need to do well in the short term, with a clear view to success in the long term. Well-planned, well executed corporate philanthropy can help achieve this. It can be a “win-win”. Sponsorships, donating goods and services, and volunteering in our communities make a real and discernible difference to the lives of kiwis and helps build strong, resilient and well-educated communities – which ultimately benefits business in the long-term.

The Giving New Zealand survey shows that for every $1 recipients received in cash from businesses, they received another $1.43 in sponsorship and another $3.27 in in-kind giving (such as goods and services).

Giving what you do every day is an effective type of giving; asking lawyers to paint a fence is much less valuable than asking them to provide legal advice. And Porter’s subsequent work on ‘shared-value’ seems to agree, while also confirming that for support to be sustainable it has to be win-win. 

Our society needs more corporate giving. And when companies get it right, the pay-offs are great and help drive success - improved staff engagement, increased productivity, better customer satisfaction and positive brand recognition. There are other less obvious benefits that flow from building understanding and capability around core social issues. This can drive innovation, customer centricity and more effective responses. Having a strategic philanthropy plan doesn’t make Executives ‘bad’ or selfish people; it makes for sensible, long-term and effective investment.

I urge kiwi companies to think strategically about what and how they give, and how it can benefit the community and their own businesses. Your people are a rich source of guidance. Get their views and insight into what matters to them and the type of support that could really make a difference in their communities.

Giving what you do every day is an effective type of giving; asking lawyers to paint a fence is much less valuable than asking them to provide legal advice.

It’s the approach Vodafone adopted in 2002 when it established the Vodafone New Zealand Foundation, and it helped to define a focus on improving the health and well-being of young New Zealanders. When the Vodafone Foundation Canterbury Fund was established to aid the long-term recovery of the Canterbury community, Vodafone staff based in Christchurch were involved in choosing the grant recipients – which included wage-subsidy grants for newly created positions, infrastructure grants involving education, sport, recreation or culture, and youth grants. To date more than $2.67 million has been invested in the local Canterbury community. In total over $20m has been invested nationwide by the Foundation.

Corporate giving and business philanthropy is an important part of our society that needs to continue – doing good is good for business. It requires smart, strategic investments that fulfil the business needs as well as those of the community. It means being clear about what you want to support, and why, and requires strong leadership at the top.

It makes sense for Vodafone and for the other businesses doing it; a healthy New Zealand means healthy customers and healthy employees – which means a healthy business. Does that make us selfish?

Antony Welton is chair of the New Zealand Business Giving Network, chair of Vodafone New Zealand Foundation, and HR director at Vodafone New Zealand.

Extra credit: Giving away your money is much harder than you might think. Just ask Owen Glenn. Just what is New Zealand's problem with philanthropists