October 2017

Cliff Oswick explores corporate giving and considers the potential impact upon workplace morale and employee engagement

Corporate giving is a big business. In their annual report Giving in Numbers, the Committee Encouraging Corporate Philanthropy (CECP) (a coalition of more than 150 CEOs from the world’s largest companies) identified that the aggregate level of corporate giving by large corporations in 2016 was just over US$24.5bn. This level of philanthropy is clearly good for recipients. But is it good for the givers? The CECP report, which surveyed 272 world-leading organisations, asserted that charitable giving, as a form of societal engagement, constituted a “new source of competitive advantage”. Specialist consulting firms who help corporations to hone their ‘giving strategies’ have also asserted that well-planned and focused forms of giving can increase sales and strengthen customer brand loyalty. Beyond these externally facing benefits, the internal effects are perhaps less well understood. Does corporate giving improve organisational morale and enhance employee engagement? If so, how and why? And what approaches work best?

Fifty shades of giving

Large cash donations and community fundraising initiatives remain firm favourites on the corporate menu. One recently added offering is ‘gift matching’, where donations to charities by employees are matched by the employer. This form of giving is becoming more prevalent, with almost two-thirds of Fortune 500 companies offering matching programmes. Unlike large donations and community initiatives, which are largely ‘top-down’, gift matching is ‘bottom-up’ insofar as it is employee-instigated.

"Far too often we associate giving with giving cash"

A recent study by Michael Norton, a professor at Harvard, shows that: “Involving customers or employees in charity decisions can help to boost sales or job satisfaction.” This involvement arises in gift matching because having some personal discretion over which charity is supported and how much to give means employees feel invested and connected to the giving process. There is also a sense that the company is actually supporting them as well as their chosen charity. Not surprisingly, because employees simultaneously feel supported by the company and empowered to make choices, greater levels of commitment and engagement are associated with this form of giving than the more traditional, management-instigated alternatives.

Avariciousness or altruism?

Rob Goffee and Gareth Jones, two professors at London Business School, wrote a book titled Why Should Anyone Be Led By You? where they talked to hundreds of leaders and followers within the business world in an attempt to answer that question. They found that followers want leaders to be value-driven and authentic. Arguably, this has implications for corporate giving. Employees are more likely to ‘buy in’ to charitable initiatives if they feel that the company’s motives are focused on ‘doing good’ (ie helping worthwhile causes) rather than ‘doing good business’ (eg for PR purposes). If corporate giving is perceived by the workforce to be about adding to the bottom line while claiming to be altruistic, it is seen as cynical and inauthentic behaviour and, as such, it is likely to have an adverse effect on employee engagement. This doesn’t mean that there shouldn’t be some indirect benefits to companies engaging in giving – but it does mean that the company should not see charitable work as a form of strategic investment.

Thinking outside the (charity) box

Far too often we associate giving with giving cash. And, more specifically, we think about giving money to charities. Kurt Hoffman, former director of the Institute for Philanthropy, suggests: “Money is the least valuable social change asset.” Donating skills and expertise and utilising company resources can often be far more effective than cash donations. Caroline Fiennes, author of It Ain’t What You Give, It’s The Way That You Give It, offers the examples of TNT, who got aid to communities affected by the South Asian Tsunami far faster than any NGOs, and how Coca-Cola used trucks and its logistics network to distribute condoms and educational leaflets to remote villages in Africa to combat the spread of HIV and AIDS. These are illustrations of the power of non-financial forms of support. They are also illustrations of how people in need can be helped directly rather than through charities as giving intermediaries. Directly helping deserving causes can have a galvanising effect upon organisational stakeholders, because seeing the direct impact upon recipients’ lives creates a sense of collective purpose, meaningfulness and community.

In conclusion, companies should reflect upon how and why they engage in philanthropic activity. In particular, they might ask if they are doing it for the right reasons, seek to encourage and embrace employ-led initiatives, and try to leverage non-financial forms of giving.

Cliff Oswick is a Professor in Organisation Theory at Cass Business School, City, University of London

Cliff Oswick

Professor in Organisation Theory at Cass Business School, City, University of London

Cliff Oswick

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