The power of giving: The importance of corporate philanthropy in modern business

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Charities provide a lot of support to communities. From offering support to communities impacted by severe weather events, and attempting to address food shortages and inequality through grants and food banks, the breadth and depth of activities many charitable organisations do are unparalleled.

To provide these vital community services, however, charities rely on the goodwill of individual and corporate philanthropy to continue to provide services in a timely fashion. Corporate philanthropy can be significant, not only in supporting vulnerable organisations, but in its ability to act as a force multiplier for the values and ideals that a team holds dear.

For business professionals, such as those completing an online MBA in Australia, understanding the benefits that corporate philanthropy can bring is vital to ensuring its ongoing success in modern Australia. Let's explore some of the different types of corporate philanthropy, how they may be beneficial to your organisation, and some of the common misconceptions that occur when talking about philanthropy.

One of the most common misconceptions that occurs when talking about corporate philanthropy is the idea that it's simply a cheque. While it's true that many donors do make donations directly to charities, there's an emerging trend of so-called volunteer leave - a period of paid leave that an employee can take annually, specifically to donate their time to a charitable organisation of their choice.

The impact of volunteering cannot be understated - in 2020, almost 500 million hours were spent volunteering for organisations large and small. For more than five million Aussies, volunteering is a way of life - and policies that enable corporate volunteering can be a great way of supporting your employees while making a difference to your local community.

Enabling employees to volunteer for causes that are important to them can also help to express an organisation's commitment to corporate social responsibility. For example, enabling employees to take a day's volunteering leave can help improve productivity upon a return to the workforce - and for some, it can allow them to amplify the impact they have on the broader community.

While corporate philanthropy can be incredibly beneficial to organisations and employees, an often under-reported impact is the ability of philanthropy to act as a sales driver. It's well documented that younger generations increasingly prefer to make purchases from companies that reflect their values. Take, for example, the social enterprise Thankyou Group.

From its humble beginning as a water bottle company, Thankyou Group and founder Daniel Flynn have raised more than $18.1 million since 2008 to combat extreme poverty. As a company, they operate in a way that demonstrates their values - promoting sustainable packaging and products (including discontinuing the water bottle) to provide a high quality, sustainable, and eco-friendly product for the community. In return, they have a loyal and supportive customer base.

Philanthropy can have more than a physical impact - it can also be financially beneficial for an organisation to publicly disclose its corporate values to the world. Many contemporary consumers actively consider a company's values when purchasing goods or services, and as a result, being open and public about what you stand for can help attract customers that may align with a particular set of corporate values.

A team is only as effective as the teammates that contribute to it. Corporations are very similar - ultimately, they're only effective if teams are cohesive and contribute to the broader goals of an organisation.

Recent research has found that traditional motivations for employees, such as remuneration, are becoming increasingly insignificant for the youngest generation of employees in the workforce. Many millennials are looking for opportunities that enable them to have a positive impact on the world they live in - and as a result, having a transparent corporate position that enables the sharing of corporate views can sometimes be critical in attracting highly qualified applicants to companies.

One way to attract high-quality talent is to take note of corporate philanthropy within a job description. Making it clear that an organisation is supportive of volunteering and wants to make a difference can help promote a strong stance on corporate responsibility. Putting your corporate values front and center can highlight just how valuable philanthropy is within the workforce.

It's not unusual for corporations to donate to charitable causes that reflect their values. For example, many organisations partner with causes such as EB Games and their longstanding partnership with the Starlight Children's Foundation, or Kmart's decades-long support of the Salvation Army with the Wishing Tree Appeal.

Depending on if the charity is a registered DGR (deductible gift recipient), a corporation may be able to make a philanthropic donation directly to the organisation. However, while this may seem beneficial, there are some important things to note.

In particular, it's critical that if a philanthropic donation is made, there is no quid-pro-quo from a charitable organisation. Unlike payment for service, a donation to a DGR must not come with strings attached - it must be donated without condition.

It's important to note that many frameworks define what can be considered a gift or a contribution. Fortunately, the Australian Tax Office provides clear directives to corporations on what can be considered a philanthropic contribution. Crucially, employers must not have paid for a material benefit, and purchasing items at a charitable auction is not considered a donation.

Philanthropy can be incredibly beneficial for organisations - allowing employees to support causes that are important to them, promoting the corporate and social responsibility frameworks that a corporation supports, while also providing the opportunity to attract high-quality talent and potentially receive tax breaks on giving.

No matter whether you're an MBA graduate looking to make their first foray into corporate leadership, or a well-heeled executive, understanding the role that corporate giving has can be an invaluable insight into the values that a company holds. It may even open the door to opportunity and innovation for those that are looking to push forward philanthropic ideals.