A Brief History of Corporate Giving and Corporate Social Responsibility
Corporate giving has its roots in the historical concept of noblesse oblige — the idea that those who are more fortunate have an obligation to act responsibly and to generously support those who are less fortunate. Steel magnate Andrew Carnergie embodied this belief. The man who was unarguably one of the wealthiest, most astute businessmen of his era also pioneered the sphere of corporate giving. In his lifetime, he donated to thousands of individuals and causes. His most enduring legacy, though, may be in the way he used his fortune to support public education through the establishment of schools, universities and some 2,500 public libraries around the world.
He also openly championed his philosophy that those who accumulate great wealth have a responsibility to manage and administer it in a way that benefits those less fortunate. In his own words, “…the millionaire will be but a trustee for the poor; intrusted for a season with a great part of the increased wealth of the community, but administering it for the community far better than it could or would have done for itself.”
The Evolution of Corporate Social Responsibility
The years following World War II saw the rise of formal corporate giving programs. Businesses such as the Ford Motor Company, AT&T, Chase Manhattan Bank and Johnson & Johnson all created foundations to direct charitable giving as a way to give back to their communities. These earliest foundations, like Carnegie, shared a great deal with the concept of noblesse oblige, most particularly that the corporation itself had the wisdom to dictate where its money would do the most good.
The Growth of Strategic Philanthropy
Over the course of the next several decades, the concept of corporate social responsibility (CSR) evolved into one of strategic philanthropy.
Strategic philanthropy suggests that the way to make real and lasting change through corporate giving is to decide on a goal that’s important and create a strategy to achieve that goal. Most definitions of strategic philanthropy emphasize the importance of fitting corporate giving to the company’s core mission and ethics. In practice, it often means that a company adopts a corporate giving policy that benefits both society and itself. An example of strategic philanthropy would be a technology company that funds educational opportunities for STEM students.
In recent years, some voices have started to question whether this approach is the most useful way for a business to make meaningful contributions to society. They note that people are most likely to give of their time, skills and money when they personally believe in the cause they’re supporting. More and more, companies are starting to offer more choice and individuality in the way they support the causes that matter to their company and their employees.
The Genesis of Workplace Giving
The middle of last century — the so-called golden years of corporate giving — also saw the development of the first formal workplace giving programs. They arose from the creation of community chests, precursors of funds like the United Way, and a need to expand the way those community organizations raised money. Rather than soliciting individual donors, those charities learned they could raise more funds by partnering with employers.
As the workforce and employers became more comfortable with automatic payroll deductions for taxes, social security and other employee benefits, employers found it was easier to encourage employee participation in workplace giving programs if they offered the option to make regular donations to charity through payroll deductions. The strategy was wildly successful in increasing engagement among employees and donations to the charities involved. In fact, by the 1970s, employee giving made up nearly 50% of the United Way’s annual contributions. There were a number of reasons for this:
- It made it economically feasible for employees to make charitable donations, especially those with less discretionary income.
- It gave donors the assurance that their donations were going to a vetted charity.
- It helped build a company culture of charitable giving.
- It reduced the amount of work for fundraisers.
It had one drawback — it gave employees little choice in which charities the company supported. That has been changing as more and more companies give their employees (and, in some cases, customers) more of a voice in choosing which charities will receive the funds raised.
Association of Corproate Citizenship Professionals (ACCP) – Corporate Social Responsibility: A Brief History
Merriam-Webster – Noblesse Oblige Definition
Investopedia – Corporate Social Responsibility (CSR) Definition
Center on Nonprofits and Philanthropy – The Past, Present, and Future of Workplace Giving in the U.S.
Afac – CSR Survey
Cone Communications – Americans Willing To Buy or Boycott Companies Based on Corporate Values
Cone Communications – 2016 Cone Communications Employee Engagement Study
PN Purpose Tracker – Employee Perspectives on Responsible Leadership During a Crisis