Company philanthropy

Christine Harland is a director of Camden Writers.

The Business of Changing the World
By Marc Benioff and Carlye Adler. Published by McGraw-Hill, 2006

Jeff Swartz is third-generation CEO at Timberland, the family shoe manufacturing business. As a young man, he watched his father take a wad of cash out of his pocket and hand it to a factory worker. Later, Jeff asked his dad about the exchange.

"You have $108 in your pocket this week," answered his father, "and so does Freddy. The difference is that Freddy has a wife and a child and he has to pay for rent and food."

To prove his point, Jeff's dad drove him to the local YMCA, where Jeff learned that a rented room and a few cans of food soon ate up his $108 of pocket money. He pointed out that if Freddy couldn't make ends meet on his salary at Timberland, he would go elsewhere, affecting, in turn, everyone's wellbeing. That notion of interdependence, Jeff explained, has always been part of his company's business model.

This story is one featured among 20 short and interesting company histories coupled with personal essays on corporate philanthropic practices. What is missing for me is a deeper look at corporate philanthropy as a whole and the ways in which a social conscience is truly embedded in corporate culture. The message is not only about what companies give and the manner in which they share resources, but the depth of the commitment to a rich and productive relationship between corporation and community.
 
John Morgridge, chairman emeritus of Cisco Systems, recalls the company's early philanthropic efforts, when employees literally jumped the back fence to help out a small school in whatever way they could. John and his wife, Tashia, met and established a strong personal relationship with the principal and volunteered their personal time.

"Everyone thinks that the contribution a company can make to the community is about money," Morgridge asserts, "but community involvement is about so much more. By leveraging talented people, culture, innovative technology and solid relationships, we've found that companies can make a more significant difference."

Recognising that banks should have a particularly close relationship with their community, the chairman of Citizens Financial Group goes so far as to say if you are not generous of heart; if you don't feel the need to contribute to life beyond your own needs; if you are not a volunteering individual, you are probably going to be out of synch at Citizens.

What emerges in this book are the different levels at which philanthropy can define a company and the people who work there. Peter Drucker's model of the social entrepreneur, a model that influenced hundreds of business leaders in the mid-20th century, is a good tool for highlighting the distinctions. Drucker asserted that the real attraction of giving for the social entrepreneur is the prospect of getting results and bringing about change. He or she is not out to fix or institutionalise problems; the goal is to civilise the city, not subsidise it.
 
Steve Case of AOL epitomises that orientation. "There are few more rewarding experiences than making a donation of time or money that literally changes a life," he says. "Too many people act as if the private and social sector should operate on different axes with one all about maximising profits and the other all about maximising social impact. A better approach is to integrate these missions.

"At AOL, there was a dual passion behind what we were doing: building a profitable business and building something that has tremendous impact on society and people's lives."

If you include Drucker's hypothesis that social entrepreneurs tend to invest their own money in projects and often work outside the mainstream of traditional charity, you recognise Jim Casey of UPS, Susan and Michael Dell (who gave away $933 million of their fortune) and Michael Milken (who has given more than $750 million). Often, the social entrepreneur has a personal stake in the cause. Michael Milken, for example, founded the Prostate Cancer Foundation and is the largest private funder of prostate cancer research.

When Akinobu Kanasugi, vice chairman of the board of NEC, lost his first wife to cancer, he realised that neither title nor rank in society was important to him. "By branching out beyond the basic fundamental principles of business," he writes, "my career has become more rewarding. Fostering and supporting programs that have a positive impact on society have made my life richer in every way imaginable."

Peter Drucker would have understood that statement as true transformation. In the profoundest sense, the process of setting a high standard for workers as well as executives to give back to society nourishes an ethical system that is, ultimately, the greatest gift that business can give to the society in which it operates.