Thanks for an interesting question.
It's not widely known that Adam Smith, the author of "The Wealth of
Nations" and widely regarded as the father of modern capitalism, was
also an author of other (in his time) well known books. The most
famous of these was Smith's "Theory of Moral Sentiments" which opens
up with this sentence:
"How selfish soever man may be supposed, there are evidently
some principles in his nature, which interest him in the fortune
of others, and render their happiness necessary to him, though he
derives nothing from it except the pleasure of seeing it."
The full text of Moral Sentiments is available here:
http://www.socsci.mcmaster.ca/~econ/ugcm/3ll3/smith/moral.html
Thus, the very philosopher who made human selfishness the foundation
of his economic thought, also recognized the opposite human need
toward altruism, even if one "derives nothing from it" except a warm
fuzzy feeling.
Moral sentiment is doubtless one reason why companies, large and
small, will donate money, resources or staff to community causes. Any
company, after all, is merely a collection of human beings, at least
some of whom have good hearts, and are prone to sharing their success
with those in need.
But you can rest assured, these same companies often -- maybe always
-- have their economic self-interest in mind as well.
An interesting site focused precisely on this topic is "Measuring
Philanthropy" at:
http://www.measuringphilanthropy.com
One of their documents at:
http://www.measuringphilanthropy.com/docs/summary.pdf
just happens to be right on target for your question, and is called:
"MEASURING THE BUSINESS VALUE of CORPORATE PHILANTHROPY"
Table C in this document summarizes the key reasons businesses make
donations (although the study is focused on large businesses, I think
the reasons are equally germane to smaller businesses as well). I've
quoted from this table below:
Most Frequently Cited Business Benefits of
Corporate Citizenship
1. Improves employee relations
(e.g., improves employee
recruitment, retention,
morale, loyalty, motivation
and productivity)
2. Improves customer
relationships (e.g., increases
customer loyalty, acts as a
tiebreaker for consumer
purchasing, enhances brand
image)
3. Improves business
performance (e.g., positively
impacts bottom-line return,
increases competitive
advantage, encourages crossfunctional
integration)
4. Enhances a company’s
marketing efforts (e.g., helps
create a positive company
image, helps a company
manage its reputation,
supports higher prestige
prices, enhances government
affairs activities)
-----
The article has a good deal of additional detail, including references
to back up each of the four points made above. The site also has a
good deal of additional information about the process used by
"Measuring Philanthropy" to document the value of corporate giving in
quantitative terms readily understood by bottom-line business types.
----
Another site to be aware of is the Committee to Encourage Corporate
Philanthropy at:
http://www.corphilanthropy.org/index.html
Their annual report for 2002, while not as succinct a summary as the
Measuring Philanthropy site, contains a good geal of language on the
benefits of corporate giving to the economic well-being of the company
itself. The report can be found at:
http://www.corphilanthropy.org/corassets/files/about/annualrpt/2002annualreport.pdf
and the relevant language is in mid-report, beginning on page 17.
In brief, they emphasize much the same benefits as the four points
above, and in addition, make the broader point that companies cannot
thrive if the communities around them are not thriving -- only when
the markets (i.e. potential customers) are healthy, can the company
remain healthy. Thus, it is in their long-term self-interest to help
the community grow.
----
I hope these examples give you what you need. Please let me know if
you need any additional information before rating this answer.
search strategy: google search on economics "corporate philanthropy" |
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