A recent article by Doug Conant, chairman of CECP (Committee Encouraging Corporate Philanthropy) and former CEO and president of Campbell Soup Company, sparked dialogue among our colleagues at The Curtis Group. Conant convincingly makes the case of how philanthropy can “help companies reduce risks, open new markets, engage employees, build their brand, reduce costs, advance technology, and deliver competitive returns.” While the original model for corporate social responsibility (CSR) was simply defined as a values-based proposition: companies should seek to do well by doing good, Conant views it more strategically as an exploratory opportunity to make an initial investment in a social issue.
The word “investment” has been in The Curtis Group vernacular for some time now. Today, more and more donors—whether individual philanthropists, corporations or foundations—give their financial support to a nonprofit and subsequently seek outcomes and desire an evaluation of the return. Conant encourages companies to view philanthropic investments as “incubators for promising ideas” and a mechanism for researching the similarities between community and corporate needs.
Throughout his essay, originally published in McKinsey & Company’s Insights, Conant cites examples of the effect of philanthropy on corporate growth. He notes the more Campbell Soup Company “leveraged our business resources to deliver social value to various communities, the more engaged our employees became and the better our company performed in the marketplace.” Employee engagement is one of the trends The Curtis Group is seeing in corporate philanthropy today. Many companies desire employee volunteer opportunities from the nonprofits they consider supporting. With more engagement comes more personal investment by employees, and higher employee satisfaction delivers better company performance.
Another example is Vodafone who, in 2003, identified an opportunity to bring mobile banking to rural Africa. Originally a lack of corporate confidence in the initiative made funding a challenge. However, it was through a matching grant from the United Kingdom’s Department for International Development that incubated the initial venture. This partnership provided the empirical evidence Vodafone sought to take on the bigger financial risk and fully invest in the region. It was philanthropic dollars paired with corporate investment that originally fueled this growth opportunity and brought new technology to an emerging market.
Examples such as these can be found everywhere. Corporate philanthropy has the power to energize altruistic ideas and contribute to social change, while contributing to a company’s bottom line. In a recent CECP survey of Fortune 500 companies, 59% reported increased giving between 2007 and 2012, despite our country’s recession. CECP companies gave a total of $14 billion to nonprofits last year. As Conant concludes, “Smart companies understand philanthropy is part of a broader economic-recovery strategy, both for them and the communities in which they invest.”
To view Conant’s essay in full, visit McKinsey & Company’s website where the article originally appeared.