A History in Corporate Philanthropy

Corporate philanthropy has been a part of American society for at least the past century, although it has been in the last two decades that we have seen it expand as a part of the business plan. Even though it as seen as a useful marketing tool for most corporations today, some economists spoke out against it. Milton Friedman argued the only “social responsibility of business is to increase its profits . . . the corporation is an instrument of the stockholders who own it. If the corporation makes a contribution, it prevents the individual stockholder himself deciding how he should dispose of his funds.”  Corporate philanthropy runs contrary to interest of a for-profit organization. Regardless of personal sentiment, corporations view corporate giving in the same light as marketing.

But this hasn’t been the case for our entire 200+ year history in the States; partly because corporations have only this century grown to be the dominant force in American business. One of the biggest names still resonates today is Andrew Carnegie, who earned his fortune in steel, and gave throughout his life to libraries and other groups. However, the idea of corporate giving wasn’t popular during the day, so Carnegie was more of a renegade in his ideas of charitable giving.

They idea of strategic charitable giving has risen in popularity along with the twin idea of social responsibility. During the last two decades, free trade agreements have enticed companies to move part of their operations overseas. This spawned the Buy American movement and companies took notice; consumers will alter their purchases based on issues beyond price, especially when it concerns their jobs and their local economies. Smart businesses were able to apply this in relation to corporate imaging and strategic charitable giving boomed. With $14 billion passing from corporate holdings to charities in 2010, it shows no signs of slowing.

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© 2010 Nathan Jurczyk News