How Contemporary Corporate Philanthropy Works and Its Impact on Societies

The Why and How of Corporate Philanthropy

Corporate and business leaders often have humanitarian urges and instincts to help society after they have achieved a certain amount of success in their professional careers and fulfillment in their personal lives.

Indeed, most corporate and business leaders once they have become legends often have an attitude of giving back to society following the Maslow’s Theory Stage of Self Actualization.

In other words, they reach a stage in life where their main goal is to actualize their vision and mission for society and they aspire to help people and societies with a humanitarian outlook.

This can be seen in the way the various business visionaries and legends such as Bill Gates, Warren Buffet, NR Narayana Murthy, and Azim Premji all have setup foundations and philanthropic initiatives where they can help the underprivileged and the needy.

Indeed, they are following in the footsteps of the original and pioneering capitalist legends such as Rockefeller, Ford, and others who similarly setup their foundations to help humanity. What these foundations and initiatives have in common is that they are funded by the respective individuals or organizations and often have a mandate to help those in need to the maximum extent without wasting money and time in lengthy and laborious bureaucratic tangles.

How Corporate Philanthropic Foundations Work

The difference between the governmental initiatives and policies and welfare schemes and the corporate foundations is that the latter often engage directly with the beneficiaries without having intermediaries and without leakages in the form of overheads and unnecessary expenses.

On the other hand, these corporate foundations are also known to be staffed by extremely competent social work graduates and people with direct experience of working in the field thereby maximizing the impact of the funds spent on noble causes.

Moreover, foundations such as the Bill and Melinda Gates one and the Rockefeller are also known to work with the governments to ensure that there is better coordination at both the top and the bottom of the philanthropic value chain.

In addition, since there are experienced social workers who staff these foundations, it is also common for these foundations to insist on rigorous methodologies for disbursing funds wherein the feasibility and impact of such disbursements are studied in depth before the decision to fund them are taken.

Some would go as far as to say that some of these corporate foundations work like efficient corporates themselves both in their approach and their methods at evaluating and deciding on funding.

Some Criticisms of Corporate Philanthropic Foundations

Having said that, in recent years, some activists have begun to question the methods and the approaches of these foundations in terms of falling into the trap of publicity and attention seeking as well as what is known as Five Star Activism wherein some of the funders and the foundations often spend their funds without any real or meaningful impact.

In other words, in the same manner in which most governmental schemes often end up as being Photo Ops for politicians and celebrities, activists allege that the philanthropic initiatives are likewise aping them.

In addition, their methods are also being questioned in terms of not having any Last Mile Impact on the people wherein some foundations spend money without the actual beneficiaries benefiting much.

Of course, this is something that the Bill and Melinda Gates foundation has avoided to some extent wherein they have taken steps to mitigate Last Mile problems in Africa where their vaccinations and other health initiatives are focused.

Thus, it can be said that some foundations by virtue of having their Ear to the Ground take criticism and feedback willingly and seek to improve on the same.

Corporate Philanthropy Has to Go Hand in Hand with Governmental Initiatives

The key point to note here is that there is a growing realization that NGOs or Non Governmental Organizations, The Corporate Philanthropic Foundations, and the various Trusts at some point have to interface with the government since only then would the schemes and the initiatives have real impact.

On the other hand, there is bound to be corruption and leakage when governments get involved and this is the reason why the corporate funders and the foundations have to walk a tightrope between maximizing impact and minimizing wastage and inefficiencies.

This is where personalities such as Bill Gates have a lead over others because by virtue of his status as a business visionary, he is more likely to engage governmental stakeholders in a better manner and hence, use that as a leverage to get things done faster and better.

Indeed, this is something that some foundations in India such as the Infosys Foundation and the APPI or the Azim Premji Philanthropic Initiative have been trying as well wherein they use the goodwill and the respect that their patrons have in society to drive the various schemes and initiatives in an efficient manner by engaging governmental and nongovernmental stakeholders in a more effective manner.


Lastly, it needs to be remembered that very few corporate philanthropic foundations reach the scale and size needed to make meaningful impacts and hence, it would be pertinent to say that they should complement and supplement the governmental efforts and use their foundations to drive home the message that the government must first get its act together.

In other words, corporate philanthropy cannot be a substitute for governmental inertia and hence, this is something that must be understood by all stakeholders.

To conclude, when corporate foundations reach the necessary scale and have a legendary visionary as their patron, it is more often than not that they make the maximum impact on society.

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