Dr. Maccoby participates in a Weekly Forum on Washington Post.com called "On Leadership". I am compiling all of his responses to the weekly questions here.
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DATE: November 17, 2009 Dead philanthropy? In an era when business leaders are retooling their mission and methods to be more socially responsible, and social entrepreneurs are using market mechanisms to solve social problems, is corporate philanthropy still relevant? |
Venture Capital Over Charity
Corporations contribute to society by producing goods and services that improve the quality of life and providing employment with fair wages and decent working conditions. Some companies do even more by educating its workforce and encouraging employees to contribute to their communities through philanthropy and volunteer activities.
However, the practice of direct corporate philanthropy raises questions. Would the funds that go to philanthropy be better spent as venture capital to create new products and jobs? Employment is certainly one of our highest priorities as a nation.
Who decides about the philanthropy? Would the shareholders agree this is where there money should go? Shouldn't they have a say about which charities they want to support? Republicans often argue that taxes should be cut because "you are a better judge than the government of where to spend your money." This is arguable in the case of government that spends money on education, national defense, homeland security, and health. But it is harder to refute in the case of corporate giving.
Does the philanthropy promote the company? Can it be shown to be good public relations? Or is it mostly public relations for the CEO? Like advertising and promotion of sporting and cultural events, there is a good argument that philanthropy is good for business. However, in support of the public good, there is no question that the greatest corporate contributions are employment and good products.
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