Does It Matter What Motivates Business Philanthropy?

It's usually comments like: “X company is only supporting Y initiative because there’s something in it for them.” “Oh, they are just giving money to that nonprofit because it makes them look good.” “They’re just trying to hide the fact that the company has a bad reputation.” Do businesses give back because they care, or because it helps their business grow? Related: Passion Drives You to Succeed; Let It Also Drive You to Give Back Giving back is a win-win, so does that make it less noble? If an entrepreneur or CEO wants to give money to a nonprofit to increase their name recognition or gain positive exposure, I say, so be it. It is simply good business to try to get as much value possible from charitable acts. If giving back leads to positive exposure, which in turn drives revenue, that company will have even more means to donate to charitable causes moving forward. Companies donated $18.5 billion to charity in 2016, according to Giving USA. Companies take on philanthropic causes to help their public image, which can, in turn, improve profitability. They may wonder why a certain CEO is making headlines while their own good deeds go unnoticed. Remember, it is free press for the cause you are supporting, too, which could lead to more donations. When a business gives back, everybody wins -- including the business.

Author: Brian Jones / Source: Entrepreneur

Does It Matter What Motivates Business Philanthropy?

Opinions expressed by Entrepreneur contributors are their own.

When businesses give to nonprofits or volunteer their time, I often hear grumblings from other business leaders in that community. It’s usually comments like:

“X company is only supporting Y initiative because there’s something in it for them.”
“Oh, they are just giving money to that nonprofit because it makes them look good.”
“They’re just trying to hide the fact that the company has a bad reputation.”

Do businesses give back because they care, or because it helps their business grow? And if the answer is the latter, should it matter?

Giving back is a win-win, so does that make it less noble?

Let’s say a company participates in a beach cleanup for selfish reasons — so they can look good on social media. The beach still got cleaned, right? Their not-so-noble reason for action still helped the environment. Should that business not perform deeds like these because their motive is not entirely altruistic?

If an entrepreneur or CEO wants to give money to a nonprofit to increase their name recognition or gain positive exposure, I say, so be it. Giving back is a great way to garner media attention. CEOs are running for-profit companies with defined objectives. It is simply good business to try to get as much value possible from charitable acts. If giving back leads to positive exposure, which in turn drives revenue, that company will have even more means to donate to charitable causes moving forward.

Dan Price, CEO of Gravity Payments, cut his own pay to energize his staff with a $70,000 minimum salary for every employee. Some thought it was a selfless endeavor that spoke to the broader issue of a national minimum wage increase. Others thought it was a stunt to gain exposure for his company.

There’s no doubt it lead to a barrage of interviews and media coverage, so much so that the company probably saved money on advertising costs. The publicity also helped Price land new clients and attract new hires. But Price’s good deed should not be tarnished because people speculate about his motives. Companies don’t need to be martyrs. It is okay — or better yet, smart — to give back in ways that drive business objectives.