The need to give something back to the society which nurtures us is generally accepted. The question is should charity be purely altruistic or can it have a selfish motive. According to Mark Twain there is no such thing as unmotivated charity, instead of quibbling about whether charity is really charity if it is motivated, it would be better to encourage even something like motivated charity so that at least those who are less privileged are helped by those who have plenty, even if the giver has a selfish motive. It is almost certain that in the corporate sector charity is often driven by commercial motivations. When corporate philanthropy is underpinned by commercial objectives, critics of corporate philanthropy within companies are liable to support it more willingly. The fact that social development leads to a more stable economic and social system ought to be enough to spur the corporate sector towards corporate philanthropy. But if that sounds too vague and not tangible enough, there are more direct benefits that a company can derive.

A company’s policy towards social responsibility can and should be rooted in business objectives which can vary from company to company. Some corporates may wish to use philanthropy to promote product sales. Others to promote their company’s image. Some companies, for example liquor manufacturers; may seek social approval, still others to project an image of professionalism to aid recruitment or enhance employee morale. Whatever the imperatives a company is working with, its strategy for good corporate citizenship must enhance its value among its stakeholders. How does a company achieve this?

A company’s needs can vary from the recognition from its stakeholders to political mileage; from loyalty from employees to a favourable image amongst investors. On the other hand, a company can support social development in various segments, from health care to education, from AIDS awareness to water and sanitation. The projects that a company chooses to support will depend on it’s business, for example, a pharmaceutical company may prefer to get associated with health-related development projects, whereas a computer company may like to support education (as IBM does world-wide).

When a company plans its corporate philanthropy, it looks at various aspects like budgets, the geographical area in which the philanthropic efforts will be concentrated, etc. The budgets could vary considerably. Projects in the area of primary education could be supported with a relatively small budget, but a water and sanitation project may require a company to put out a much larger sum. Geographically some companies may wish to get involved in development only in their immediate environs, while others may wish to operate across the country because they have national brands or national operations. These decisions would be easy once a company is clear on its corporate social responsibility (CSR) objectives. The objectives would depend on the company’s needs. Having identified the sector, decided its budget and having zeroed in on the geographical area, a company has to start looking at how to get the benefits it is seeking from the activities it proposes to support. Benefits can be derived in various ways. From public relations mileage through media (aimed at stakeholders such as bankers, financial institutions, etc), to direct product promotion by linking the activity with a brand (aimed at existing and potential consumers). For example, a toiletries company may wish to support a health and sanitation project by linking its health soap brand with the project.

Brand advertising can be done by advertising on educational material, in educational classes run by the development agency concerned, or by subsidising the price of the soap as a promotional scheme. The number of possibilities is endless. The vehicles for advertising vary: from advertising on written material to advertising on hand pumps and repair manuals. The benefits, in such cases, are more direct and the credibility of the product greater because it gets a kind of indirect testimonial from the development agency. The way of identifying the most appropriate vehicles for advertising and other support are perhaps best arrived at by discussion between the donor and the agency executing the project. It is worth pointing out that apart from the brand associated benefits that a company would get, in most cases the company may also get tax exemption for its donation.

Many companies tend to start their corporate citizenship programmes by executing projects departmentally. This has several disadvantages. Companies may be experts in their own business but only a few are really adept at executing social development programmes. Often the experience of a newcomer to CSR is one of frustration which ends up in disillusionment. Like in any other part of its business, this is a “make or buy decision”. Just as a company would not normally make a part or a component that it can easily purchase, there is really no need for it to directly engage in executing social development projects when there is a large number of specialised agencies and NGOs which are highly experienced and reliable.

Experience and research indicate that companies are often suspicious of NGOs and sometimes doubt their integrity or ability. This suspicion is reciprocated by the voluntary sector amongst whom there is a widespread feeling that the corporate sector is a self-seeking, irresponsible, profiteering lot of people. The truth lies somewhere in-between. There are profiteers amongst the businessmen and there are unprincipled NGOs. However, the majority of the constituents of these two sectors are responsible, conscientious organisations that genuinely believe in doing good. If the strengths of one could be combined with those of the other it could lead to a quantum leap in the quality and quantity of development activities. In fact, Bangladesh has some superlative examples of NGOs that have become models for the world, e.g The Grameen Bank (which gives loans to the poorest who cannot offer any collateral) and BRAC, which has made a phenomenal contribution to raising the literacy levels. What is really required is a platform where the corporate sector and the voluntary sector can meet and understand each other’s needs and evolve ways to satisfy them. A partnership between these two sectors can truly be one that is based on the win-win principle.

One of the principles that companies must base their corporate giving programmes on is that this must be a long-term, ongoing effort. Just as corporate advertising on a short-term or sporadic basis is not recommended for image building among stakeholders, a corporate giving programme that is short-term is not advisable. Amongst the best examples of companies that have gained significantly from their philanthropic activities are the Tatas and the Godrejs whose philanthropy has been generous and consistent.

The voluntary sector, on the other hand has to operate in a way that dovetails with corporate sector practices if they want the sector’s support. For example, an efficient system of monitoring and feedback is required by corporate donors to enable them to keep track of the projects for which they have donated resources. Such feedback also strengthens mutual trust.

The corporate sector is considered by many today to be the most influential sector of society. The voluntary sector is one that is involved with and can influence the lives of millions. A partnership between the two can revolutionise social development.

Nripjit Singh (Noni) Chawla

This article originally appeared in Business Standard - 07 March 1996