The Crucial Steps Toward Philanthropy in Business

The dependence of the companies by the surrounding communities and the failures of the governments to cover the basic needs of the population during much of the 20th century perpetuated philanthropy as a synonym of responsibility. In developing countries, these effects were even more pronounced and persist today. Hence, the efforts have remained in recent decades to implement the broader vision of corporate responsibility to society, not because it was harmful, but because it was and is insufficient. The trouble was considering it as a substitute. 

Primary Responsibilities

We find ourselves in a very special situation where one of the main responsibilities of companies, especially those with great economic power, is precisely philanthropy. Again, it should not be just any philanthropy, but rather a directed and coordinated philanthropy between companies and their foundations, governments, and civil society institutions, to maximize impact. Faced with the great surprise of the pandemic, the non-existent preparation of governments and of many institutions with responsibility for the health of populations, financial and management capacity, and the agility of companies are proving critical to face it.

The Urgency

It is philanthropy that is financing the most urgent research, and it is philanthropy that has made available to researchers the supercomputing equipment necessary for the processing of infinite data. It is philanthropy that is providing equipment for hospitals, many times before the failures or incompetence of governments.

Nevertheless, with urgency, and with the need to appear that needs are being responded to, mistakes can be made that reduce the efficiency and effectiveness of these efforts. It is necessary to reduce bureaucratic obstacles to donations, without forgetting accountability and (accountability assuming responsibility), make alliances with other donors to enhance impact, support the public sector and focus on the needs with the greatest impact and results in the short term, especially social ones.

The Impact

Given the disproportionate impact of the pandemic on the most vulnerable populations, with lower incomes and with lower levels of work skills, it is necessary to extend philanthropy beyond material stakeholders and begin to emphasize the moral argument of responsibility, doing good because it is fair and on the business case of doing good because it pays off. In addition, it would be expected that, given the difficulties that the same companies experience in the face of falling demand, these philanthropic activities will be reduced at times of the greatest need for institutions that promote social welfare.

The Integral Part

Philanthropy is an integral part of a company’s responsibility before society, but it is not a substitute. It has its role, but as a complement to an integral strategy. This should not imply the neglect of responsibility understood in the broadest sense. Most of the companies have seen their activity diminished, with the consequent negative impacts on their financial situation. For many companies, this implies entering into survival mode, of short-termism, of reducing uncertainties, and therefore neglecting the long-term vision and actions required to assume their responsibilities. The other side of the coin is the negative impact on staff and other stakeholders, both in financial, emotional, and health terms. When employees most need security, companies are less able to serve them. Cane Bay Partners CEO can provide more information on this crucial topic.