Why Non-Strategic Corporate Philanthropy is Not Sustainable

As a business growth consultant, I often start a consultation with a new client by asking them about the mission and vision of their business. These two terms have become clichés in the corporate world but are quite important.  Why you might wonder…

Simply because the lack of mission and vision in a company points me to a fundamental problem – lack of strategy, in other words, lack of direction. Fundamentally, progress is impossible without knowing where you’re headed. Without a plan and consistency, continuous progress is unlikely.

In business, as in everything, you need to know where you are going to get there. Otherwise, your efforts are scattered and when there is no direction and focus, your work is rarely effective. Unless you fail, you will end up in a place you never intended to be, the realisation of which is disappointing and demotivating.

The same holds when it comes to philanthropy. This is the reason why I often talk to my clients about the need for their philanthropic endeavors to be strategic and integrated into their business structure. Otherwise, what you do is hardly philanthropy in the real sense of it as there is no long-term impact as a result of your philanthropic deeds.

The truth is, that non-strategic philanthropy is not only ineffective as actions are not integrated and consistent but also unsustainable in the long run. Here are a few of the reasons why.

Customers and employees see through it

Without consistent, integrated efforts, enthusiasm fades. True dedication to a cause leads to long-term engagement and motivation from both employees and customers.

No visible impact

If social impact is not integrated into your business model, your efforts will be scattered and irregular. This makes it difficult to achieve clear results and visible impact. Strategic philanthropy means that you focus your social work on a particular cause and you contribute in this direction consistently. The goal is to build on your achievements by adding new approaches. Fresh initiatives will support your cause and drive progress. When there’s no build-up and follow-up, chances are the results from what you do won’t be clear and you will find it hard to keep up your social activities.

No improvement in the competitive environment

The core of strategic philanthropy and its main benefit is in its ability to improve a company’s competitive environment. By donating time, knowledge, and resources, and organizing initiatives, you invest in both the community and the economy. Your efforts help raise awareness and make a lasting impact. Over time, these efforts lead to healthier community members and a larger, better-educated talent pool. They also contribute to happier employees and other benefits. Thus strategic philanthropy, as opposed to corporate social responsibility, is more of an investment rather than anything else. When companies engage in strategic philanthropy long enough, they begin to see its value. This realization motivates them to continue their efforts.

Bad publicity

In a world where corporate actions are scrutinized, even small missteps can lead to damaging publicity. Companies must be cautious to maintain authenticity in their social responsibility efforts.

There’s something else as well. Many companies have focused on brand building and positive publicity. As a result, the public has become sensitive and cynical towards corporate social responsibility. Companies must carefully manage their employment policies, resource usage, and partnerships. Even small missteps can lead to scandals. This can damage their brand reputation. They also need to constantly reassure the general public of being genuine about their social work. Companies may have good intentions to help the community, but inconsistent actions can make them appear insincere. This can lead others to believe their efforts are just for publicity. This in turn could harm the company’s reputation and discourage the organisation from any further efforts.

Corporate acts of kindness, when not focused, are unsustainable because there is no permanent motivation. And there is no motivation because there is no vested interest on the part of the business. Hence, for your social engagement program to work, philanthropy needs to be well-embedded into the body and soul of your organisation. This is why indeed it is important that you tie in your business results with your social impact, and this is what I call strategic philanthropy.

If you want to incorporate social impact into your business model, we can help you make a difference and grow your business. Feel free to reach out! As a corporate philanthropy consultant with many years of business coaching experience, I can help you integrate meaning and purpose into your business in a sustainable way.