Philanthropy &Corporate Social Responsibility-Samples for Students

Question: What is the difference between Corporate Social Responsibility and Philanthropy? Illustrate with examples. Answer: Introduction: Corporate social responsibility and corporate philanthropy are closely related concepts and philanthropy is a part of social responsibility of business or organization. Both the concept have the potential of creating positive impact on the overall performance of company. A corporate social responsibility (CSR) is a program that is built by company based on shared experience. Corporate philanthropy is the dimension of corporate social responsibility (Kozlowski et al., 2015). Discussion: The concept of corporate social responsibility can be referred to as voluntary soft regulations that organizations adopt for improving several aspects of company such as issues relating to environmental, labor and human rights. There exist ambiguity in defining the corporate social responsibility concept despite several efforts to bring an unbiased definition. Employment of programs of corporate social responsibility is about companies taking actions and having responsibilities that is beyond their economic, business and legal obligations. On other hand, one of the specific type of activity involved in the CSR program of business is corporate philanthropy. It is the actions on part of corporations donating resources and profits to nonprofit companies. Corporate giving or philanthropy can either be done through corporate foundation or handled directly by corporation (Beare et al., 2014). Philanthropy is the primary and first CSR activity of many organizations and the charitable actions is done using corporate resources for engaging in activities such as charitable activities and donations and voluntary working by engaging personnel. Such activities does not seek any direct benefits to business and they take place outside the immediate business of organization. However, organizations or corporation are able improve their reputation by minimizing invasive public policy. Employment of activities of corporate social responsibility leads to collaboration and integration of shareholders with other group of stakeholders for building credibility, managing potential risks and trust creation in society. Philanthropy is considered as social and voluntary dimension of CSR activities as these activities are not prescribed by laws and it is more a voluntary actions of organization. CSR is understood by business activities that helps in addressing philanthropy that can be a source for non-government organization. From the perspective of company, philanthropy is about donating charities that leads to taking efforts for assisting distressful people by funding them. Some of the example of corporate philanthropy involves donating funds or money to orphanages, charities, old age homes, financing clothing and food to people hit by Tsunami and to countries that are hit by natural calamities. CSR activities adopted by organization is about the integration of economic, social and environmental considerations into the processes and decision making structures of business. Employment of such programs helps in producing direct benefits for the bottom line. Some of the examples of CSR activities of organization is recycling of materials and reduction of waste. An organization can have economic and environmental benefits simultaneously by adoption of co efficient actions (Ioannou Serafeim, 2014). This would help in generating positive profitability by contribution to stronger financial performance. Organizations are able to derive ample benefits for engaging in CSR activities. Such benefits involves development of better relations with stakeholders and communities, improved branding, innovation and productivity. CSR is becoming part of strategic behavior of increasingly small, medium and corporations operating at international level. Organization should not behave in a socially irresponsible way by dumping waste and chemicals into water bodies and creating pollution. The factor at core of CSR activities is performing business in an ethical and legal way. With regard to the concept of philanthropy, there are two types of such activities that is traditional philanthropy and strategic philanthropy. Former involves organization to devise and set strategy and outcome measurement in relation to companys interest (Milne Gray, 2013). On other hand, strategic philanthropy is designed in such a way that it taps companys expertise and bringing specialized knowledge to company. Carrolls social responsibility pyramid: (Source: Carroll et al., 2016) An organization can be called socially responsible if all the four level of responsibilities are met that is philanthropic responsibilities, ethical responsibilities, legal responsibilities and economic responsibilities. Philanthropic responsibilities of corporations is on the top of pyramid and according to this pyramid, every organization should incorporate philanthropy in their business policy as a part of their responsibility towards serving wellbeing of community. Nature of philanthropic activities is discretionary or voluntary in nature (Janek et al., 2016). Participation in such activities are guided by desire of business activities to engage in social activities. For fulfilling perceived philanthropic responsibilities of organization, an organization or corporation engage in variety of giving activities such as service and products donation, gifting monetary resources, community development, volunteerism by management and employees and other contribution to the group of stake holders that make up the community. Most of the times, business engage in philanthropic activities for augmenting reputation of their business and sometimes it is a utilitarian decision. Establishment of philanthropy as a part of strategic activity of company in socially responsible framework provide organization with immaterial importance, valuable and competitive advantage. Competitive position of organization is ensured by building reputation and image of company by performing philanthropic activities and overall activities of being corporate socially responsible (de Villiers Maroun, 2017). For promoting the aspects of being socially responsible and contribution of incorporating philanthropy, it is required by organization to explore more as it is depicted by trends that profit of organization is increased by social responsible economy. Conclusion: Corporations has the responsibility towards serving community and society besides thinking about probing return to shareholders and creating satisfaction for customer and employees. Some of the integral part of corporate social responsibility involves moral values, business ethics and environmental concerns. Philanthropic activities forms the integral part of organization being socially responsible. When an organization decides to contribute for any nonprofit cause by engaging in philanthropic activities, utilitarian calculation should be done by making comparison of benefits and cost of decision (Kozlowski et al., 2015). Social responsibility of organization can be met through philanthropic ventures that would help in enhancing reputation and image of company. References list: Beare, D., Buslovich, R., Searcy, C. (2014). Linkages between corporate sustainability reporting and public policy. Corporate Social Responsibility and Environmental Management, 21(6), 336-350. Carroll, R. J., Primo, D. M., Richter, B. K. (2016). Using item response theory to improve measurement in strategic management research: An application to corporate social responsibility.Strategic Management Journal,37(1), 66-85. de Villiers, C., Maroun, W. (Eds.). (2017). Sustainability Accounting and Integrated Reporting. Routledge. Ioannou, I., Serafeim, G. (2014). The Consequences of Mandatory Corporate Sustainability Reporting: Evidence from Four Countries. Harvard Business School. Working Paper, 11-100, August 20, 2014. 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