In it, he discussed how business-to-business companies may be able to set themselves apart from the competition by enhancing their green credentials and by being seen to care more for the environment. However, Nick warned that this approach should not be adopted for purely financially-motivated reasons; being environmentally-friendly and promoting sustainability have become hugely important issues in this day and age, and they should not be taken lightly.
Corporate philanthropy: Does it make sense for B-to-B?
With leadership comes responsibility. Countless companies use that phrase in their corporate messaging in explaining why they donate to charitable causes.
Corporate giving, also known as social responsibility, corporate philanthropy or corporate citizenship is commonly described as aligning a company’s activities with the social, economic and environmental expectations of its stakeholders. Real-life examples include Dell Computer’s Plant a Tree for Me campaign. As part of the online ordering process, consumers can check a box and Dell will make a donation to plant a tree in their name. In the BtoB sector, Applied Materials, a manufacturer of semiconductor chips, has donated millions in disaster relief efforts for Hurricane Katrina, the earthquake in South Asia and the tsunami in India.
Corporations make contributions for a variety of reasons: in an attempt to impact society; to seek public acceptance and applause; to increase their name recognition among consumers; to develop a better public image; to achieve greater consumer loyalty; and to improve community relations. Not to mention the tax benefits.
A study shows that corporate philanthropy even results in better profitability. Companies that give more to charity are more profitable, according to a study published in the Wall Street Journal by Dover Management, who operates a mutual fund that invests in corporations committed to charitable giving. The survey says that companies with a solid link between giving and operating earnings outperformed the Standard & Poor’s 500 index by 3.5 percentage points over five years.
OK. So philanthropy can be a bit self-serving. After all, it does offer some tangible and tempting benefits i.e. more profits and better branding. Philanthropy has a huge impact on branding," says Kendall Webb, CEO and founder of JustGive.org, a non-profit charity portal for businesses and individuals. "I don’t think companies give for that specific reason only, but the payoff is there. Consumers are looking for more meaning in the products they’re buying and they really buy into an idea like corporate giving."
Hold on. There’s a key word in that statement: consumers. Does the same hold true for BtoB buyers? Are a BtoB’s clients influenced by a record of corporate giving? No research that we know of has been done to support or negate that question, but it has been proven that in general, people (including BtoB buyers) do business with people and companies they like. And contributing to a worthy cause certainly ups a business’s likeability quotient.
Complementing advertising and public relations efforts, philanthropy is undoubtedly a great way to create a positive corporate image. Doing good is apparently good for you.
But beware: Savvy BtoB Buyers will see through poorly veiled attempts at charity just for the PR value. Your efforts will be viewed as nothing more than superficial window-dressing. Rather, if you’re going to do philanthropy, do it for the right reasons: because, similar to the rush that individuals get from volunteering, corporate philanthropy feels good and it’s the right thing to do. Focus on a good cause that makes sense for your organization. And operate with a perspective broader and longer than your own immediate, short-term profits. After all, with leadership really does come responsibility. You’ll have the greatest impact on society that way - and your customers will take notice.
Also, make sure corporate giving is a proactive, rather than a reactive, activity. Corporations who proactively seek social issues to support are viewed as acting in a philanthropic manner. Those who react to negative publicity are seen as trying to cover up, or correct an error.
Another key to success: make philanthropy a planned part of the company’s budget. That way, you’ve allowed for the expense far in advance and have a continuous charitable fund available.
In summary: Give charitably the right way, and everyone wins.
MediaBrains philanthropy
During the month of August, MediaBrains is donating 5% of all proceeds to help needy children buy school supplies.
