on corporate philanthropy shams, public opinion

1. Is
philanthropy
mere a tool of
publicity
Bhuvi Gupta ()
Kritika ()
Divya Barsiwal(754)
Geetika()
Alka(620)

2. WHAT IS CORPORATE PHILANTHROPY
Corporate Philanthropy is the act of a corporation or business
promoting the welfare of others, generally via charitable
donations of funds or time. means "love of humanity
 Monetary donations : Cash
 Non monetary : Product/ Services
 kind donations: Time/ Talent
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3. TYPES OF PHILANTHROPY

4. ADVANTAGES TO THE SOCIETY
Companies donate hugely to education ,art , medical expenses etc.
Citing example of top 3 forbes listed philanthropic companies
 Walmart donated 4.5% of its 2011 pre-tax profits, which helped
support about 50,000 different charities.
 Chevron Corporation. The California-based multinational
energy company gave $262,430,000 cash to foster economic
growth with a significant focus on health, education and
economic development programs .
 Goldman Sachs Group : It gave $262,580,983 share of 2.3% of
2012 pretax profits to Women initiative.

5. funds allocated for various purposes
Collectively, corporate philanthropy accounts for nearly $15
billion in annual giving to nonprofits

6. CORPOREAL ADVANTAGE
Without Giving
$30m  Profit
-$9m  30% tax
$21m  Net
With Giving
$30m  Profit
-$2m  Gave
$28m  Profit After Giving
$5.6m  (20% tax, ie ↓ tax
bracket)
$22.4m  Net
Even after giving $2m, firm saved 1.4m extra  ↑ dividends, EPS
And, according to journalist Richard Rothstein, for every $10 a
philanthropist like Bill Gates gives away, the government loses
about $4 in tax breaks.

7. IS IT A MEANS TO PUBLICITY
 5
Case
Yearly death by tobacco - 440 000 US , Negative publicity about
the tobacco industry and a recent federal fraud conviction
,affected corporate image, employee morale, and company
financial ratings. To counter these effects, Philip Morris widely
publicized their local and global philanthropy. It was the third
largest US corporate giver in 2005; It has donated more than
$1.5 billion during the past decade.13
Philip Morris use philanthropy strategically to improve
company image influence policymakers,
4

8. PHILANTHROPIC SHAMS(PUBLICITY)
1.Tobacco giant Philip Morris, spent $ 75 million on its charitable
contributions in 1999 and then launched a $ 100 million
advertising campaign
2. THE RED LABELED PRODUCTS

9. In 2006, corporations like Motorola, Armani, Apple, and The Gap
together designed a range of ”Red” labeled products to join a
cause marketing effort to raise money for a British NPO, Global
Fund and promised to donate 50% of their profit from “red
labeled” products .
 Added benefits involved company’s free and extensive media
exposure as well as a high public profile as it was promoted in
Oprah Winfrey show. It however raised $18 million for the Global
Fund against the combined promotional budget of $100 million
.The media exposure certainly exceeds the cost of donating a
percent of profits from “Red” product sales to charity.

10. ARE THEY COMPLEMENTARY ?
Their interdependence led to introduction of new term
“strategic philanthropy”
“strategic philanthropy”
“corporate giving that serves a dual purpose of contributing
needed funds to charitable causes while
simultaneously benefiting the firm’s financial bottom line
and enhancing business’s political legitimacy,”
allowing them to use the tax deductible
donations to expand markets and build public goodwill
Increasingly, philanthropy is used as a form of public
relations or advertising, promoting a company’s image or
brand through cause-related marketing or other high-profile
sponsorships.
Philanthropy
Marketing
strategies
(publicity)
Strategic
philanthropy

11. FUTURE OF PHILANTHROPY
Many corporations swear their certain amount of their future profits
to philanthropy
Coca-Cola Company said in March that it will commit US$30 million over the
next six years to provide access to safe drinking water to communities
throughout Africa through its Replenish Africa Initiative (RAIN).
The Kellogg Company is donating an entire day's worth of cereal production to
Feeding America, a hunger relief food bank network encompassing more than
200 food banks in the U.S. The donation is worth $10m at retail value prices and
represents 55 million cereal servings

12. PUBLIC ‘S OPINION ON CORPORATE
PHILANTHROPY
Richard Rothstein ( research associate of the Economic Policy Institute
and a former education columnist at The New York Times)
On facebook’s donation - Mr. Zuckerberg might keep in mind
Maimonides' advice that charity is superior where donors get no
recognition and recipients are unaware of the donors' identities.
A Walmart employee- Employees are so poorly paid that they need to
obtain taxpayer subsidized welfare assistance to obtain health care
while it brags about giving 1.3% of its profits to charity and reaches
the top of the list as a "philanthropist". There is something
fundamentally wrong, unfair and immoral in the way this
accomplishment is being measured. Looking at numbers alone is no
way to assess such a situation.
Giving more does not satisfy the critics—the more companies donate, the
more is expected of them. And executives find it hard, if not
impossible, to justify charitable expenditures in terms of bottom-line
benefit.

13. CONCLUSION
 After Microsoft announced its paid employee volunteer
activities in Egypt, customer satisfaction scores grew from 61 to
91 %. Therefore Companies that are more cutting edge and
assertive in their philanthropy can promote their efforts as part
of their brand.
 Philanthropy should be practiced by the corporations as a part of
their CSR but it should be taken care that philanthropy is not
used as a mere publicity tool but is also fulfils societal obligations
and meets the company’s objectives too.
 Experts argue that companies can and should strategically use
their charitable activities to create win-win opportunities for themselves
and for the beneficiaries of their philanthropy.

14. BIBLIOGRAPHY
 http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2636524/
 Philanthropy as Public Relations:A Critical Perspective on
Cause Marketing
 Wikipedia
 Forbes journal