Tuesday, August 24, 2010

Corporate "Philanthropy": Oxymoron?

In Monday's Wall Street Journal there appeared a provocative essay by Arneel Karnani (whose first name WSJ managed to misspell), a business professor at University of Michigan. Titled "The Case Against Corporate Social Responsibility," the core argument is "the idea that companies have a duty to address social ills is not just flawed ... but it also makes it more likely that we'll ignore the real solutions to these problems."

In my opinion Prof. Karnani is right. But I have a slightly different take born of boots-on-the-ground. My experience is that no company in its right mind ever takes on "corporate social responsibility" for its own sake. Nor should it. Profit is always foremost, or should be; what gets marked down as social responsibility is almost always little more than a marketing ploy or a p.r. gambit. Years ago I worked with George Weissman, then head of Phillip Morris, and one of the few p.r. guys who ever actually rose to the top of a major public company. Weissman was one of the first to come up with the social responsibility tag. I once asked him if it wasn't still "just about hawking cigarettes." His answer was one word "yes." And we both laughed.

As a native New Yorker, and therefore an innate cynic, I am much more comfortable with that "yes" than I am with the posturing that goes along with "social responsibility." In recent years I have become quite involved in helping clients into "cause related marketing," a practical application of the social responsibility thrust. Ultimately, when it works, CRM is the devil and the angel finding common ground.

If there is an act of apparently pure corporate beneficence it simply does not follow that "image," brand" or whatever the current locution is can be extended without any consideration of the good it will do the company. Fine with me. That way we each know where the other stands. Indeed in recent years what I have observed is an ever increasing transactional rationale to corporate giving.

Most probably every charitable gift - regardless of whether it is from a corporation or an individual is a mix of altruism and self-interest. I think of an A/B axis, pure altruism at one end, unmitigated self-interest on the other. Any donor's gift falls somewhere along that axis - and it does not necessarily fall in the same place with each gift. Depending on the cause there may be a greater or lesser degree of altruism v. self interest.

I give money each year to the volunteer fire department in the small town I live in: If my house is on fire I want to know I'm on the donor list. By small town standards I am also a "major" giver to the local humane society. This giving (almost every month) is 100% altruism. I am up to here in (needy) cats and don't want to add to the three who are in charge here. But I cannot resist the monthly newsletter - or the BRE that falls out! All my other giving falls somewhere else along the axis.

A cause marketing firm I work with has published data suggesting that socially aware companies do better at the cash register. Does that prove doing well by doing good really counts? Or is it just clever marketing?

1 comment:

marilyn said...

It's good to have this discussion out in the open. Going back to 1935 when Congress was called on to clarify that corporations could make charitable gifts despite some shareholders' reservations, this debate has been active. And it will continue to be -- because we are still -- all of us -- figuring out how to do our businesses well. And yes, I'm impressed with the studies that show that where retail is involved, one of the strongest ways to make a consumer change brands (especially women), is to be seen as a visible "good corporate citizen."