Why companies donate at local schools
Answers
Explanation:
1. Building respect and a good reputation in the community.
2. Making your community a better place to live.
3. Employees respect leaders who do good.
4. Connections and networking.
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Corporate philanthropy is in decline. Charitable contributions by U.S. companies fell 14.5 % in real dollars last year, and over the last 15 years, corporate giving as a percentage of profits has dropped by 50 % . The reasons are not hard to understand. Executives increasingly see themselves in a no-win situation, caught between critics demanding ever higher levels of “corporate social responsibility” and investors applying relentless pressure to maximize short-term profits. Giving more does not satisfy the critics—the more companies donate, the more is expected of them. And executives find it hard, if not impossible, to justify charitable expenditures in terms of bottom-line benefit .
This dilemma has led many companies to seek to be more strategic in their philanthropy. But what passes for “strategic philanthropy” today is almost never truly strategic, and often it isn’t even particularly effective as philanthropy. Increasingly, philanthropy is used as a form of public relations or advertising, promoting a company’s image or brand through cause-related marketing or other high-profile sponsorships. Although it still represents only a small proportion of overall corporate charitable expenditures, U.S. corporate spending on cause-related marketing jumped from $ 125 million in 1990 to an estimated $ 828 million in 2002. Arts sponsorships are growing, too—they accounted for an additional $ 589 million in 2001. While these campaigns do provide much-needed support to worthy causes, they are intended as much to increase company visibility and improve employee morale as to create social impact. Tobacco giant Philip Morris, for example, spent $ 75 million on its charitable contributions in 1999 and then launched a $ 100 million advertising campaign to publicize them. Not surprisingly, there are genuine doubts about whether such approaches actually work or just breed public cynicism about company motives. (See the sidebar “The Myth of Strategic Philanthropy.” )