CONCERN for the welfare of others or the desire to help the less fortunate is one of the most honourable acts a person can do for another.
It has long been recognised that the issue of social commitment, where businesses are expected to contribute to society and not just the bottom line, is not confined to the present epoch of globalisation.
In 1919, Henry Ford, the founder of Ford Motor Company, declared that “a business that makes nothing but money is a poor kind of business”.
This means that giving back to the community should be embedded in the core business strategy to drive a meaningful social change.
Corporate philanthropy or social responsibility (CSR) refers to the business giving of money, time or in-kind goods with the core purpose of benefiting the community’s welfare. It can take in many forms.
Broad, corporate philanthropy can be divided into monetary and non-monetary activities. Monetary includes cash, sponsorships, awards, grants or scholarships, and disaster relief. Non-monetary, on the other hand, includes in-kind contribution, volunteering and partnership.
In-kind contribution is where firms or companies give products or provide services to the community (for instance, free banking and management services, and distribution of free products).
Volunteering refers to programmes designed to engage employees with the community. Employees, either individually or in groups, work with community organisations or get involved in community projects as volunteers. Some firms give paid leave for staff involvement.
As with partnerships, companies work closely with key community groups for a shared aim. Normally, a partnership is created for over a long-term period rather than ad hoc.
So, what are the advantages of CSR? Obviously, there is a clear advantage on the society that it serves. However, it does not stop there. Corporate philanthropy can be used to improve the quality of a business environment by bringing together social and economic goals, thus enhancing future business prospects. In other words, it can be viewed as creating a win-win situation as the benefits accrue not only to the beneficiaries but also to the companies that give.
By assisting those in need, companies are providing social benefits and building a good corporate reputation that assists in gaining community trust. This reservoir of social goodwill can be portrayed tangibly through the positive outcome of the company’s bottom line.
Corporate philanthropy can also be an effective tool to meet the rising expectations of customers and society at large. This, in turn, will build respect and trust. This added trust will impact positively on customer engagement, market share, as well as profit.
A company that involves in volunteering programmes not only helps those in need, but also earns employee engagement and motivation. This will boost productivity and reduce turnover rates.
Undeniably, profits are necessary. Nevertheless, a company’s act of giving can sometimes have a much greater impact on the business competitive landscape.
UiTM Johor campus