Corporate Social Responsibility And The Company’s Bottomline

It may seem like an oxymoron to say that engaging in corporate social responsibility practices is good for a company and its bottom line. After all, philanthropic efforts are inherently meant to be “not for profit”, but rather an exercise in altruism. 

Still, it is inevitable that there are direct and indirect financial implications of philanthropic acts on the company. 

Investment and Resources

Unfortunately, good intentions are not enough for corporate philanthropy. This is because helping out an organization or community requires a certain volume of company resources to be invested. 

This may come in various and multiple ways. For example, monetary donations can be made to organizations such as Cane Bay Partners to help rebuild communities devastated by hurricanes in the US Virgin Islands. It can also come in the form of donating equipment such as computers, laptops, or tablets to schools that may be in need of these materials for their students. 

Meanwhile, it’s also possible for charitable efforts to come in the form of manpower or labor from the company’s members, such as in building shelters, participating in community kitchens, or volunteering in local youth educational organizations. 

Whichever method the company chooses to engage in, the important thing is that it will require a resource or two. If only for this reason, corporations should take these factors into serious consideration before committing to any particular advocacy or campaign. 

Company Productivity & Profit

Another way in which corporate philanthropy may affect a corporation’s bottom line is by boosting company productivity. This effect is a little bit more indirect than allocating resources, and is more long-term in development.

Generally, it’s found that employees tend to be more productive and satisfied at work when their company is engaged in acts of philanthropy. It is posited that this is because they feel involved and relevant, even indirectly, by being affiliated with a company that is doing its part to give back to the community at large. 

The inspiration stems from the realization that they are not simply working for profit for the company, but that they are also helping others by being in a company that engages in philanthropic acts. Knowing that their productivity at work trickles down to the benefit of the company, which then puts it in a better position to give back to the community is a strong motivation for employees to perform their jobs better, especially if they have particularly strong ties to the chosen advocacy. 

Tax Relief

One of, if not the biggest financial impacts of corporate philanthropy on businesses is their taxes. The government recognizes philanthropic efforts carried out by businesses, and thus, as a way to incentivize them, offers tax relief by way of deductions.

This could mean a lot of savings for the company, which could not only help improve their finances, but also benefit their workforce. Ultimately, corporate philanthropy does in fact align with business financial goals instead of running contrary to it, as many may mistakenly believe.