Regor Behind the Audit One of the strengths of the LBG Canada process is the…
Reimagining and Redefining Corporate Philanthropy
In late October, UN World Food Program Executive Director David Beasley took to Twitter and posed a challenge to the world’s ultra-wealthiest individuals: Step up on a one-time basis to help end world starvation.
The price tag was six-billion to Jeff Bezos and Elon Musk, who have a combined net-worth of almost $500 billion. The benefit would be a fiscal injection with potential to save the lives of 42 million people on the brink of starvation, and halt both geopolitical instability and mass migration. To many people’s surprise, Elon Musk met Beasley’s challenge with a caveat that sparked a global conversation. He asked for Beasley to provide a financial breakdown of the UN’s plan to spend his money.
While Musk’s request is bold and attention-seeking, it demonstrates a stark reality: ignorance of how charities and non-profits strengthen the fabric of society with corporate investment. Organizations, which time and again, demonstrate how to do more with less – especially now in the wake of the COVID-19 pandemic. However, a Twitter feud can’t reveal the whole story when it comes to the relationship corporations should have with their community partners. This is a story that begins with corporate motivation.
For those of us in this industry who specialize in accounting for what companies invest in community, we know there are three motivations behind why a company chooses to give to communities, outside of contractual or regulatory obligation. First, a company is motivated to ‘do the right thing’, not from a self-serving or egocentric attitude but from recognition that something must be done in response to real circumstances they observe. Second, a company sees community investment as an opportunity for long-term meaningful connection with stakeholders on issues of mutual interest or concern. Thirdly, a company invests with clear objectives to build tangible business value as a result of achieving meaningful community impact. Great community investment portfolios are in fact, a strategic blend of all three.
What is made abundantly clear through Musk’s Twitter demands is that there is a lack of any real motivation to seize the opportunity to have a massive societal impact through community investment. Recently, the Canadian Centre for the Purpose of the Corporation released research highlighting that Canadians desire companies to make an impact, with 68% of Canadians agreeing that business must be expected to play a role in addressing income inequality, 63% in diversity, equity and inclusion, and 84% believe businesses should put the interests of other stakeholders on par with the interests of shareholders.
One way to meet these mounting expectations to increase legislation and accountability. Another is for companies to develop a vision for their own impact. Attention must be paid to the financial, social and environmental impact of their operations, but business must also go above and beyond.
We need to reimagine and redefine corporate philanthropy. Corporate strategy must include a commitment to replenish communities from which businesses hire, to which they sell and within which they operate. Sophisticated businesses see philanthropy not as a one-time headline grabbing contribution, such as in Musk’s case, but rather as a series of strategic, ongoing activities that demonstrate how business value flows from meaningful impact in community. A mutual interest that extends to initiatives that strengthen the fabric of civil society through activities that include access to the arts, addressing domestic violence, enabling entrepreneurship, tackling racism and discrimination, improving elderly care, progressing Indigenous reconciliation and ending global starvation, among many others.
Philanthropy is not just about ‘seeing the books’, as Musk believes, but rather, being clear on motivation, the opportunity for impact and on agreeing the impact to be reported with community partners upfront.
As we work redefine corporate philanthropy, I encourage Canadian companies to consider their role in replenishing and strengthening the communities from which their shareholder value has originated and their role as leaders moving forward. And I encourage Canadians to rethink philanthropy not as a hand-out but as an investment. Because if Musk, with his immense wealth, spent less time on Twitter and more time considering his own biases, communities we care about would be in a much better place.
By Stephanie Robertson