Business (done legally, ethically and well) creates value for a community. For trade to occur, the buyer and the seller must be better off after the transaction, and if both are better off, value has been created. Multiply this by the billions of trades that occur every day you can see that commerce creates tremendous value in our communities.
Why then do we say that a business must “give back”? I think some of the reason is the colloquial use of the term, but I think some lies deeper in society’s belief that business somehow takes from the greater good and needs to contribute back. This belief is supported by the actions of the few bad actors who push the boundaries of business ethics, have blatant disregard for the law and do all that they can to privatize profits while pushing the costs of business onto society.
So what does this mean for the “good business”? Opportunity!
The opportunity to contribute to your community in a way that aligns with your values, your business model and your strategies will leverage the value of “good business” to build your brand and your reputation as an honorable place to do business. The market will reward you because you will differentiate your brand from the stereotypes and biases about “greedy” business people who will do anything to make a dollar.
I fully believe that corporate philanthropy is a good thing; I just don’t think that it is giving back. I also don’t think it is enough. Writing a check to a few good causes and “spraying money all over” may make you feel good, but it certainly isn’t how you would approach any other business problem. In any other realm you would be strategic about your investments; you would make sure they align with your strategic initiatives, that they are providing ample return and that they are well managed.
The Committee Encouraging Corporate Philanthropy (CECP) www.corporatephilanthropy.org, which was founded by Paul Newman in 1998, reports on corporate giving each year and in their recent report on 2011 giving, there were four major trends: 1) corporations are giving more, 2) non-cash giving is more volatile than cash giving, 3) there were fewer grants, for more dollars, and 4) corporations expected to give the same amounts in 2012.
The Center for Leadership & Social Responsibility research has demonstrated that the larger a company, the more strategic they are with their giving. It is time for the economic engine of our local communities (small- and medium-sized businesses) to start incorporating some of that strategic thinking into their philanthropy and in all the ways that they are engaged with their communities.
Stop “giving back” and start engaging the community with purpose. We’ll all be better off.