Effective philanthropy demands rigorous strategy

Although the relevance of corporate philanthropy is now widely acknowledged, few companies actually achieve significant, long-term societal impact because of a lack of a well-defined strategy.

by MIT Sloan Management Review, autumn 2005
Last Updated: 23 Jul 2013

Effective philanthropy should be approached with the same professional standards and value-creating ambitions that are applied to all business ventures.

Ideally, corporate philanthropy should combine market orientation whereby the emphasis is on stakeholders' expectations and competence orientation, whereby companies align their charitable activities with their core competencies and abilities. This combination would result in strategic philanthropy, fulfilling both a PR role and maximising the impact on beneficiaries by drawing on corporate expertise.

This approach requires drive, careful planning and substantial commitment on the part of management. Companies should prepare goals and guidelines, and monitor the progress of their initiatives, just as they would for any other corporate performance. They should also have a clear cut-off point to decide when to stop a project, and communicate to all concerned the developments in their philanthropic activities.

Companies that instead become involved with philanthropic activities on an ad-hoc basis may not see long-term benefits. Emergency responses to crisis situations can have a strong impact for the beneficiaries, but often fail to deliver on publicity or satisfaction of stakeholders.

Worst of all are cash donations with little follow-up. This kind of piecemeal approach will rarely provide sustainable or long-term impact and probably fail to deliver on all fronts, stakeholder satisfaction and company benefits.

To achieve a long lasting and successful philanthropic policy, companies should therefore adopt the same rigorous methods they use for all their activities.

Source: The keys to rethinking corporate philanthropy
Heike Bruch and Frank Walter
MIT Sloan Management Review, autumn 2005

Review by Emilie Filou

MIT Sloan Management Review, autumn 2005 recommends

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