McKinsey recently released a new report about the state of corporate philanthropy, and a notable finding is that nearly 90 percent of companies say creating business benefits (including enhancing corporate reputation or brand, improving employee recruitment and retention and competitive differentiation) is a key goal for their organizations’ philanthropy programs. This might indicate a move toward more strategic corporate giving if it weren’t for a later stat that points to the CEO’s and board members’ personal interests as the leading driver of a company’s philanthropic focus. This is an obvious disconnect.
The vast majority of companies view business benefits as a critical outcome for philanthropic efforts, but the personal interests of senior management trump business factors (e.g., alignment with business needs, option to leverage existing corporate capabilities or assets) when determining direction. Perhaps this is a contributing factor to why only 14 percent of companies believe their philanthropy programs are very or extremely effective at meeting their business goals and only about a fifth of respondents believe they are very or extremely effective in meeting their social goals and stakeholder expectations. When philanthropy is regarded as strategic among CEOs, it will be more aligned with a company’s business needs and more effectively integrated throughout the organization. Only then will the right assets be leveraged to drive toward more attainable and sustainable business and social outcomes.