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    Corporate Philanthropy Generates Lasting Rewards

    Corporate philanthropy has become more strategic as companies experience the significant impact that giving has on a company’s competitive position in the marketplace.

    The traditional impetus for giving—meeting social needs and improving one’s community—still holds. But increased scrutiny of corporate philanthropy by consumers, investors, community activists, and employees has prompted corporations to become more sophisticated in their giving.

    The portfolio of corporate giving, in addition to cash and in-kind donations, now includes cause-related marketing, community partnerships, workplace giving campaigns, employee volunteer programs, and fundraising. Company contributions have become more results oriented, reflecting a corporation’s business goals.

    Responding to Stakeholder Interests
    The shift in philanthropy is being driven by the following factors:
    • Customer loyalty. Eight in 10 U.S. consumers are likely to switch to a brand or retailer associated with philanthropy, if the price and quality of the products are equal. Such consumers believe that companies have a responsibility to support charitable causes.
    • Investor concern. Six in 10 U.S. investors consider a company’s commitment to charitable causes when they make an investment. Funds that are screened based on ethical and social concerns now total more than $2 trillion and have increased 36 percent since 1999.
    • Public relations. Many companies find philanthropy to be an effective antidote to negative campaigns by activists and other stakeholders. Eighty-three of the Fortune 100 companies have posted some social or environmental philanthropy information on their web sites.
    • Employee loyalty. Corporate philanthropy has a significant impact on employee retention. U.S. workers who participate in or know of their company’s philanthropy are about 50 percent more likely to stay at the company and to recommend it as a good place to work.

    World Is Getting Smaller
    What’s prompting the increased public interest in corporate philanthropy? Analysts cite several developments: the decentralization of government social programs, the rise of multinational corporations, protests by labor and environmental groups, and recent terrorist attacks on U.S. soil. Following the September 11 attacks, public concern about corporate giving has jumped 17 percent over findings in March 2001.

    Recognizing the “Triple Bottom Line”
    There is broad participation in corporate philanthropy. Nearly all U.S. businesses—92 percent—support some type of charitable cause. Total U.S. corporate giving amounted to $10.86 billion in 2000. Trade groups such as Business for Social Responsibility, the Committee to Encourage Corporate Philanthropy, and the World Business Council for Sustainable Development are rallying concern for what is known as the “triple bottom line”—a company’s financial, social, and environmental performance.
    The demonstrated impact of philanthropy on corporate performance is driving more executives to recognize its strategic importance. “AT&T understands the need for a global alliance of business, society, and the environment,” said the telecommunications company’s chairman and CEO, C. Michael Armstrong.“ In the 21st century, the world won’t tolerate businesses that don’t take that partnership seriously, but it will eventually reward companies that do.”

    Getting Involved
    Your company can maximize its philanthropic return on investment through giving that addresses stakeholder interests. World Vision, an international Christian humanitarian agency tackling the root causes of poverty in nearly 100 countries, offers many ways to attain an optimal return. Consider a partnership today.

    Statistics compiled from independent sources by World Vision in July 2002.