Philanthropy vs Corporate Social Responsibility
The two phrases philanthropy and corporate social responsibility have become buzz words these days in the corporate world. Those are outside especially confused by what these two concepts mean to a company while there are many inside corporations who remain confused too as to which of these two concepts is better for the creation of goodwill and a better public image of the company. Despite seemingly similar objectives, philanthropy differs from corporate social responsibility in many ways that will be highlighted in this article.
Philanthropy from a company’s perspective is donating to charities and foundations that are involved in doing efforts to help individuals and groups in distress to help improve the condition of their lives. Philanthropy as a deed is considered to be noble and making one feel better of himself to have done something for the sake of humanity. People do the hard work to make a living, but it is only when they do something for others do they feel better about themselves. Philanthropy is a step ahead of charity in the sense that it does not think of immediate relief for the hungry but tries to teach him to earn a living to beat hunger forever. In the context of the corporate sector, philanthropy brings alive images of Bill Gates, Nike, Goldman Sachs, Citibank, and other such companies that have used it as a tool to earn a name for themselves while doing good for the society and humanity at large. Philanthropy asks investment of time, effort, and money on the part of a company to charitable causes. Donating to charities, orphanages, schools homeless, old age homes, countries hit by natural calamities, sending money for food and clothing for people hit by Tsunami etc are some examples of corporate philanthropy.
Corporate Social Responsibility
Business in today’s world is not limited to providing value for money to customers and client and maintaining high quality in products and services. Besides thinking about shareholders returns, value for money for the customer and employee satisfaction, a company has got to think about returning back to the society a part of the huge profit it makes by virtue of doing business. Business ethics, environmental concerns and moral values are some issues that form integral part of this corporate social responsibility. A company can create a lot of wealth, but it has to keep in mind that it should not do any harm to the society of which it is a part.
Corporate social responsibility extends well beyond the legal and economic obligations of a company as per the laws of a country and mainly concerns with social responsibilities of a company. Apart from an economic and a legal face, a company needs to have an ethical face, as well as, a philanthropic face. A company must not be seen as exploiting people or paying lower wages. At the same time, it should not be seen as being socially irresponsible by creating pollution by dumping waste chemicals into a place. Doing business in a legal and ethical way and earning money is what is at the core of CSR.
What is the difference between Philanthropy and Corporate Social Responsibility?
• Philanthropy is similar to charity except that it looks for long term solutions to problems faced by mankind.
• Corporate philanthropy is seen when companies donate for charitable causes and helping unfortunate people afflicted by natural calamities.
• Giving-back a portion of the profit back to society is what is the core of philanthropy. On the other hand, fulfilling one’s social responsibility in addition to doing business, in an ethical manner without harming the interests of the society is what forms the basis of CSR.