The gifts of philanthropy: how corporations started giving back, again

In Memphis, a city known for its generosity, it is not just foundations that are giving back--the city's corporations and local businesses are benefiting from proactive philanthropy as well. Both in and out of the workplace, foundations and corporations are making an important shift toward the involvement and engagement of individuals.
Memphis has its share of great organizations and initiatives that are raising the bar of social responsibility. An abundance of opportunity exists for individual donors, organizations and giving circles; donors increasingly want to be more involved in the evaluation and allocation processes, and they expect to see and anticipate social impact and change. The Lipscomb Pitts Breakfast Club (LPBC), Community Foundation of Greater MemphisGiVE 365 and Assisi Foundation, with classes such as "Before you Serve" and "Before you Ask," are just a few examples of organizations and initiatives working to satisfy donors' need to be more deeply involved.

Memphis also has a healthy share of corporate organizations that shoulder the burden of social responsibility. Many Memphis companies have the very resources, talent, connections, technology and business models that not only work for profitability but might also work for not-for-profit organizations to benefit the community. Companies are realizing that opportunities abound outside of event sponsorships and PR photo opportunities, and media is savvier to the PR buzz chase as well. The need for social impact in our communities is increasing, and differing approaches are constantly being explored.

Just 12 years ago, the Harvard Business Review reported that corporate philanthropy had been declining nationally for the past 15 years due to executives' focus on the bottom line. Cause-related marketing was one of the earliest practices cited as an example of "strategic philanthropy," but still, according to the research, this tactic falls short, due to its emphasis on publicity rather than social impact. There is a more strategic way for corporations to give, by using charitable efforts to improve competitive context--the quality of the business environment in the location or locations where they operate, aligning social and economic goals. According to the HBR report, this competitive context allows a corporation to "leverage its capabilities and relationships in support of charitable causes, producing social benefits far exceeding those provided by individual donors, foundations, or even governments."

Building relationships
Research reveals that corporate social responsibility also increases employee and customer retention and loyalty. No longer is it just donors who expect more. Consumers are choosing who they do business with based on socially responsible initiatives as well, and organizations are aware of and are having to consider their responsibilities.

"Social responsibility is not just doing what's right, it can be a proactive model for getting ahead--for businesses, for individuals and ultimately for our city as well," says LPBC President Jeremy C. Park.

"We have to understand that while money is a great resource, people physically are the ones who solve problems, so we have to be engaged and make it easier for our employees to do things like volunteer. People also provide opportunities to people, and we purchase goods and services based on trust, so it's all about relationships. When you're rolling up your sleeves to give back with your team, you're creating new relationships and building trust that will lead to good things for you, your company and our city."

Park offers many examples of local businesses that are doing the right thing, including Napa Café, which has created the Heart Full of Soul fundraising dinner series and even special wines which are sold year-round to benefit Stax Music Academy. Then there are Data Facts, which rallies employees to bake cookies and wrap gifts for kids at Youth Villages and purchases air conditioners for those in need over the summer, and Agape North, which follows a one-for-one model and donates one school uniform for every clothing item sold. Lipscomb & Pitts Insurance is a great example as well, with its LPBC.

Park also highlights the trend that consumers and employees both are driving purpose and social impact into the workplace and into the heart of companies. He references a quote from Evan Kirkpatrick's Forbes column "3 Key Elements of Capitalist Philanthropy."

"Kirkpatrick said, 'Companies without a social impact culture will soon be obsolete,'" says Park. "Tie that in with a quote from Rich Karlgaard's recent book The Soft Edge--'For the first time in history, impressions of openness, sincerity and authenticity are more important to corporate reputation in the United States than the quality of products and services'--and you find the critical intersection where employees are now choosing where to work and consumers are now making their purchasing decisions based on a company's social engagement and impact."

"Purpose is no longer the icing on a cake ... it is now a main and required ingredient for success," Park adds.

It's not the amount of funding funneled to not-for-profit organizations that is making our city better, but the engaged people and organizations. It is about strategic partnerships. One flaw in the current model of accountability is that not-for-profit organizations self-report to their funders. This only tells part of the story. There must be ongoing relationships and commitment at all levels.

Lori Turner-Wilson, CEO and Founder of RedRover Sales & Marketing and President and Founding Member of the American Marketing Association, Memphis Chapter, says, "Profitability comes from delivering on the wants and needs of your customer base, and what most customers want is the opportunity to partner with companies that are able to use their influence and resources to generate real social change and improvement."

Professionals market what they are trying to "sell," rather a product, a service or a cause, and funding alone is not what creates the profit or the social impact. It's the people and the relationships.

While Lipscomb & Pitts is an insurance company, it invests in the community and encourages its clients to do the same--hence its creation of the LPBC. Similarly, the Community Foundation of Greater Memphis exists to be socially responsible, yet it created GiVE 365 to engage individual donors.

"Investments in nonprofit partnerships are essential in for-profit businesses," says Turner-Wilson. "The key is to invest the time to ensure your organization's philanthropic dollars are actually moving the needle in creating tangible social impact versus simply drumming up exposure for your firm. With a properly executed partnership, both are possible."

We are all responsible one way or another, be it through our involvement and investments, or through increased taxes to deal with these issues, and additional issues are caused when original issues aren't addressed. Clearly, the bar is rising for the challenge of social responsibility.

Read more articles by Shelley Thomas.

A recent public and nonprofit administration graduate, Shelley Thomas, went from a for-profit focus to study and understand more about social responsibility and questions methods of accountability.
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