Ethics in Corporate Philanthropy
On the other hand, there are enterprises that choose to invest in the standards of ethical business conduct and social responsibility rather than suffer the consequences of being condemned by their stakeholders. They perceive that promotions and marketing could be incorporated in the act of doing good (i. e. , in an ethical manner) to others and to the whole community. These enterprises invest their money, time, and resources in different charitable foundations and philanthropic activities.
Although this may sound risky and costly, such investment benefits the community and the enterprise as well. Promotion and marketing, which often appear subliminal in nature, accompany philanthropic activities by just seeing the brand name or the company logo in the activity billboards or banners. Such placement of logo and other business paraphernalia in a strategic way is proven to have effect on the public, particularly to consumers. Customer’s cognitive process of brand and product recall is likely to be experienced especially if the event is outstanding and unforgettable.
Thus, promotion and marketing are perceived in a positive manner because it is in line with a good act such as a philanthropic activity. Such activities brought about the emergence of corporate philanthropy. Corporate philanthropy entails making businesses while at the same time promoting social responsibilities. The difference of corporate philanthropy to other social responsibility practices is that it advances more the cause (any social issue or problem that needs social solution) than the business interest.
Corporations or enterprises often have different sets of people working for business interest and for corporate philanthropy. This is done to avoid the conflict between the two different sections of the enterprise. Smith (1994) expounds on the concept of corporate philanthropy in his article, “The New Corporate Philanthropy”: these companies have become corporate citizens. Like citizens in the classical sense, corporate citizens cultivate a broad view of their own self-interest while instinctively searching for ways to align self-interest with the larger good.
That is, they hunt for a reconciliation of their companies’ profit making strategies with the welfare of society and they search for ways to steer all parts of the company on a socially engaged course. (n. p. ) Smith (1994) identified AT&T, IBM, Levi Strauss, Eastman Kodak, Allstate, Chrysler, Whirlpool, Citicorp, Reebok, Johnson & Johnson, Philip Morris, Merck, DuPont, and Coca-cola as companies engage in corporate philanthropy. Abiding business ethics, enterprises involved in corporate philanthropy provide “non-profit cash donations rather than packages of products, business advice, and company volunteers.
When it comes to selecting causes, corporate donors chose those least associated with their line of business” (Smith, 1994, n. p. ). A good example of such enterprise involved in corporate philanthropy is AT&T. AT&T was the first to introduce the doctrine of corporate philanthropy bearing different programs designed to reform both the company and the society as well. In 1984, Reynold Levy, an outsider, headed the AT&T Foundation. Levy was able to win the attention of the public in New York City by turning the 92nd Street Y into a cultural center (Smith 1994).
Moreover, Levy was able to convinced the top executives of AT&T that the employees of the company’s foundation should be “Janus-faced,” wherein one face serves the interest of the community, while the others serve the business units of AT&T. Thus, the idea entails that “philanthropic initiatives should help advance business interests through strategic alliances with the marketing, government affairs, research and development, and human resources functions” (Smith, 1994, n. p. ).
