Corporate Philanthropy on the Developjment

¶ … Corporate Philanthropy on the Developjment of Business

The study conducted and reported in this work in writing is one that examines corporate philanthropy and that seeks to answer specific questions concerning the impact of corporate philanthropy on the development of a business. The methodology employed in this study is that of a case study which involves the review of available and pertinent literature in this area of study. Following an extensive review of literature this study states findings and conclusions.

AN INVESTIGATION of the IMPACT of CORPORATE PHILANTHROPY on the DEVELOPMENT of Business

Corporate philanthropy for the purpose of this study will be assumed to represent the actions that the organization takes to integrate the company into the community in which it is located through assisting community members with achieving their goals.

Aim & Objective

The aims and objectives of the present study is to examine the outcome or impact of corporate philanthropy on the development processes of a business.

Purpose of study

The purpose of this study is to investigate the impact of corporate philanthropy on the development of business and specifically to answer the research questions as they are stated in this study.

Research Questions

(1) in what aspect is the function of corporate philanthropy significant towards development of the corporation?

(2) to what extent does corporate philanthropy effect the development of the corporation?

(3) How can the corporation ensure that corporate philanthropy influences the development of the corporation?

(4) How and why does the corporate philanthropy contribute to the competitive advantage?

Background of the Study

The work of Cari Parsons (2005) states that the word philanthropy "…is derived from the Greek language, meaning 'love for mankind'. (p.1) Corporate philanthropy is stated to refer to "the giving by a for-profit company directly to charitable organizations from the corporation or to individuals in need with the intention of improving the quality of life." (Parson, 2005, p.1) Many benefits are claimed to result from corporate philanthropy. Benefits are stated in the work of Parsons to include the following stated benefits due to corporate philanthropy: (1) corporate reputation is enhanced; (2) relations with government, the community and key stakeholder groups is improved; (3) company's strategic business goals are supported; (4) brand recognition is enhanced; (5) better employees are attracted and retention increases; (6) health communities are created supporting business vitality; (7) sense of community and social obligation are enlarged; (8) appreciation for contributions from all organizational level are encouraged; and (9) pride and responsibility are increased. (2005, p.1)

Structure of the Research

Chapter two in this study will contain a review of literature as well as the rationale of the study and any theoretical bases upon which the study is conducted in this work in writing. Chapter three will contain the methodology and Chapter four will contain the study's findings with Chapter Five containing the study's conclusions.

AN INVESTIGATION of the IMPACT of CORPORATE PHILANTHROPY on the DEVELOPMENT of Business

CHAPTER TWO -- THEORETICAL FOUNDATION & LITERATURE REVIEW

According to a study reported by Farrar (2008) entitled: "McKinsey on Corporate Philanthropy: Mind Your Own Business" the highest ranking business goals are those of "brand and reputation enhancement (70%) and employee development (42%)" however it is stated that "when it comes to how such social investment decisions are really weighted it turns out the highest ranking goes to CEO interests at 45% with employee and local community interests joint second at 37%. (p.1) Farrar additionally reports that brand development weighed in at a mere 22% which demonstrates the "contradiction between the surveyed business goals and how investment decisions are really made." (Farrar, 2008, p.1) Farrar states that if the enterprise is able to achieve sustaining its goal then efforts have to be focused "…above the line rather than below. Any efforts more closely linked to the core business operations not only have greater opportunity for sustainable impact long-term but also enjoy greater social legitimacy given that corporations do not have unlimited democratic license to make decisions to prioritize social interventions. Below the line donations are often too tokenistic after thoughts." (Farrar, 2008, p.1) Stated to be a good example of philanthropic giving that is strategically focused is that of the NetSuite Giving programme. NetSuite is stated to be targeting "in kind technology support towards three beneficiary categories: (1) registered charities; (2) Fair Trade/Social Enterprises; and (3) Green Start Ups/Environment. (Farrar, 2008, p.1)

The work of Carolyn Ashley (2009) entitled: "Harnessing Core Business for Development Impact" states that the inclusive business concept is one that "contrasts with two previous ways of business thinking. One approach was that companies could deliver their social responsibilities through corporate philanthropy or isolated Corporate Social Responsibility (CSR) programmes alone. Core business delivered stakeholder value." (p.1) Previously the principle is stated to have been "do no harm and clean up the damage, rather than create new value." (Ashley, 2009, p.1) Ashley reports additionally that it is understood on a wide basis that "business can have a greater impact on development by adapting their core business practice, than through philanthropy alone." (Ashley, 2009, p.1)

The work of Burnell (2006) entitled: "Good Works, Good Business" states that charitable donations by corporations "grew by a record 22.5% in 2005, according to the Giving USA Foundation, which also found that 59.5% of corporations increased their contributions. Even after the large increases corporations still make only 5.3% of all charitable contributions in the U.S. compared to 76.5% for individuals, with foundations (11.5%) and bequests (6.7%) accounting for the rest." (Burnell, 2006) Burnell (2006) states the following concerning what corporate philanthropy means to business development: "With proper planning and forethought, philanthropy can have a direct impact on how you grow your business. It leads to improved standing in your community, improved stature with people you'd like to hire, and it provides many networking opportunities." (2006, p.1)

Recommendations stated by Burnell is the investment in interests that are company-related including employees, customers and others that the company desires to influence. Burnell states that philanthropy may begin with "an employee "volunteering for an organization, which could evolve into the employee gaining corporate sponsorship, and a long-term relationship between the employee's company and the organization they volunteered for." (2006, p.1) Two primary choices are stated to be available which are those of: (1) direct donations; or (2) corporate sponsorships. (2006) Managing the sponsorship enables more control over the investment and involvement of the company in the sponsorship which also serves to provide excellent opportunities for building relationships and also make a requirement of time and involvement by the company. According to Douglas R. Conant, President and CEO of Campbell Soup Company, in the work entitled: "CEO Perspective: Balancing Acts" companies who exercise caution in planning their philanthropy, and who tie the goals of the community into the business core operations will be likely to have "an easier time balancing some of the difficult decisions around corporate philanthropy." (2008, p.2) Conant additionally states that when the philanthropic activities of a company are tied to the mission of the company and the business success strategies of the company "then the corporate giving is as much an element of business health as any other business function and, therefore, requires the attention of the CEO." (2008, p.2) Conant relates as well that when the stakeholders have higher expectations the result is stakeholders not only demand that companies "be more forthcoming and transparent with corporate giving communications." (Conant, 2006, p.1)

It is related in the work of Damonti, McElvy, Powell, and Cone (2006) that successful partnerships between companies and the government are "key to sustainability, but require much more than the consultative approach. Incorporate mechanisms that draw in government engagement through the initiative such as technical advisory board membership, participation in co-planning, or speaking at significant milestone events." (p.3) Damonti, McElvy, Powell and Cone (2006) state the two following suggestions: (1) Invest in programs that have already been developed and are successful, determining which of these can be scaled up; and (2) Provide meaningful ways for people throughout the organization -- across all management levels, divisions, and regions -- to be engaged in the initiative to ensure success and sustainability. (2006, p.3)

According to Auguste and Bonini (2008) corporate philanthropy should begin and be led from the top beginning with the CEO, Board and Senior Executives of a company. The corporate philanthropy strategy should align with the business strategy of the company and corporate philanthropy should be managed in the same manner as any other business investment and specifically corporate philanthropy should be managed "with discipline." (2008, p.1)

The McKinsey & Company and CECP report entitled: "Business's Contract with Society: Roundtable Discussion" states that the company's philanthropy should be assessed through making a comparison of the company to "efficient philanthropists" and in a variety of areas to include involvement of the CEO. The CEO's role and level of participation are stated to vary "from company." (McKinsey & Company and CECP, 2008, p.3) it is additionally stated that the place of corporate philanthropy in the organizational structure is not "as important as an open communication between corporate philanthropy and other key business units." (McKinsey & Company and CECP, 2008, p.3)

Fine, Kirkpatrick, Parker, and Watson (2008) in the work entitled: "Social Media: Philanthropy in a Connected World" states that today's companies can no longer "ignore the influence of social media and the opportunity to "deepen engagement with employees and customers alike through philanthropy efforts capitalizing on new media channels." (p.5) Fine, Kirkpatrick, Parker, and Watson (2008) additionally state that some companies have "already created visionary programs and initiatives that successfully tap into social networks." (p.6) Finally, Fine, Kirkpatrick, Parker and Watson (2008) state that corporate philanthropy professionals can leverage additional resources and activate a community of advocates to benefit their nonprofit partners and community investment programs through social networks." (2008, p.6)

The work of Kania and Kramer (2008) entitled: "Confluence of CSR and Philanthropy" relates that the manner in which companies "integrate philanthropy and CSR" is gaining the attention of investors. Companies are stated to have started linking CSR and philanthropy "in four innovative ways that can lead to shareholder value creation: influence public awareness of an issue, influence external conditions that make it easier to comply with CSR requirements, use corporate knowledge to impact social issues, and link CSR and philanthropy" all of which impact the competitive advantage and strategic differentiation of a company." (p.5)

Katy Friesz reports in the work entitled: "Employee Volunteerism: Good for Community, Good for Business" that the Corporate Volunteerism council (CVC) is a professional association focused on improvement of communities through advocating, supporting and growing employee volunteerism in all companies regardless of the size of the company. Friesz relates that volunteerism is viewed by companies of all sizes "as an important way to build relationships with nonprofit organization, beyond the traditional 'checkbook' philanthropy. Among other things, nonprofit organizations benefit from corporate volunteerism by reaching volunteers who otherwise may not know how to get involved or who may be less aware of the many community needs." (2009, p.1) Employee volunteerism is a strategic priority for many companies and it has been demonstrated in research that "corporate citizenship and employee volunteerism in particular, positive impact a corporation's reputation, recruitment and retention efforts and employee satisfaction." (Friesz, 2009, p.1)

Friesz reported that the 2007 Cone Cause Evolution Survey states findings that "…89% of those familiar with their companies' cause programs feel a strong sense of loyalty to their employers, and 93% said it is important for their companies to provide them with opportunities to become involved in social issues. This trend is predicted to remain steady or increase as the millennial generation enters the workforce." (2009, p.1) Friesz additionally states that employee volunteerism "…fosters a high-performance culture through teambuilding, networking and skill development. According to the 2005 Deloitte Volunteer IMPACT Survey, nearly four out of five respondents (78%) see volunteering as an opportunity to develop business skills, including decision-making, problem-solving and negotiating. and, of those respondents who serve on a nonprofit board of directors, nearly 73% strongly agreed that volunteering offers the opportunity to enhance leadership skills." (2009, p.1)

In 2007 a McKinsey Global Survey entitled: "The State of Corporate Philanthropy" it is reported that the social and political issues most likely to impact shareholder value for companies are inclusive of the top three issues of: (1) environmental related to climate change; (2) health care and other employee benefits; and (3) privacy and data security. ( ) the following figure lists the social and political issues likely to have the most positive or negative impact on shareholder value for companies over the next five years in the Asia-Pacific, Europe, North America and developing markets.

Figure 1

Source: McKinsey & Company Survey (2007)

When respondents in the survey reported by McKinsey & Company were asked which, if any of the issues listed in the following chart was their company addressing currently with the corporate philanthropy program the answers stated were those listed in the following chart labeled Figure 2.

Figure 2

Source: McKinsey & Company Survey (2007)

When polled by the survey the percentage of respondents selecting stakeholder for the categories shown in the following figure reveals that employees were listed as top stakeholders with local communities following a close second.

Figure 3

Percentage of Respondents and Categorical Selection of Stakeholders

Source: McKinsey & Company Survey (2007)

The McKinsey survey reports that when respondents were asked the question of whether their company's corporate philanthropy programs address the global social and political issues that are most relevant to the company's business, 54% of respondents stated that overall their company did address these issues and 71% reported that their company addressed these 'very and extremely effective' and that these programs addressed stakeholder concerns and met social goals.

Figure 4

Source: McKinsey & Company Survey (2007)

When respondents in the McKinsey survey were polled as to what extent their corporate philanthropy programs were effective overall in meeting their social goals the answers provided were as follows:

Extremely/Very Effective

20%

Somewhat Effective

47%

Slightly/Not at all Effective

23%

Don't Know

10%

When respondents were polled in the McKinsey survey as to whether their corporate programs are effective overall in addressing concerns of the company's preferred stakeholders the answers given by respondents were those as follow:

Extremely/Very Effective

19%

Somewhat Effective

48%

Slightly/Not at all Effective

25%

Don't Know

8%

When respondents to the McKinsey survey were polled as to whether they expect that their company's corporate philanthropy programs would become increasingly global through attempting to impact global issues or through operation in a larger number of countries over the next five years, the answers given were those as shown in the following chart along with the reasons that respondents answered either yes or no to the question posed.

Figure 5

Source: McKinsey & Company Survey (2007)

When respondents in the McKinsey survey were polled as to which considerations have the most weight in determining the focus of their company in its corporate philanthropy programs the answers stated were those listed in the following chart along with the percentages of respondents stating these considerations.

Figure 6

Which Considerations Have the Most Weight in Determining the Focus of Their Company

Source: McKinsey & Company Survey (2007)

The work of Thomas, et al. (2009) entitled: "Core Business Competencies for Development Impact: Going Beyond CSR" states that no longer is the move "…from Philanthropic CSR to using core business for development impact…just an idea. It is being accepted within both the development and business sectors." (Thomas, et al., 2009) Thomas, et al. (2009) state that "…while the idea may sound obvious, it has considerable implications for how business is done. It contrasts with two previous ways of thinking. One was that companies could deliver their social responsibilities through corporate philanthropy or isolated CSR programs alone." (Thomas, et al., 2009) Diversity of practice is the outcomes of this new thinking which is stated to be center around four core ideas and specifically those stated as follows: (1) Through its core activities of investment and operation, business has major and multiple impacts on developing economies and people. Through purposeful action the business model can be adapted, not just to avoid damage, but to positively unleash greater development impacts, while still being commercially driven; (2) There is more than one way to adapt the business model. Supply chains are critical because they reach down to poor producers, but a company's distribution and retail, research and development, dialogue with consumers and policy-makers can all strongly affect its development impact; (3) the core business approach builds on the significant gains made by through CSR to date. These gains must be protected and expanded, while core business is harnessed to deliver more sustainable and dynamic impacts; (4) Delivering greater development benefits -- or higher social value -- can go hand in hand with building shareholder value. (Thomas, et al., 2009)

The Center for Corporate Philanthropy states that there are four elements of corporate philanthropy as follows: (1) Engage; (2) Educate; (3) Empower and (4) Enrich. (2009) it is additionally stated by the Center for Corporate Philanthropy that businesses "fuel the economic well-being of our community by providing jobs, benefits, resources, and more. Similarly, companies large and small enrich and support the good health of our community through corporate giving to nonprofit organizations. Corporate philanthropy provides multiple rewards for a company and its employees and is an integral component of a company's business plan." (Center for Corporate Philanthropy, 2009) No matter the size of the company there are several steps stated to be 'key' in developing a philanthropy program. Those steps are stated as follows: (1) Identify objectives and business interests; (2) determine a budget; (3) organize a strategy for grantmaking; (4) designate a contact person to manage the giving program; (4) Assess the giving program periodically and fine tune accordingly; (5) engage and involve employees; (6) form criteria for your grantmaking; (7) communicate your pride. (Center for Corporate Philanthropy, 2009)

The work of Taylor (2008) entitled: "Integrating Philanthropy with Business" states that questions that the company must address when considering corporate philanthropy are those as follows: (1) the cause target: How will my company properly contribute to the community to advance public interest?; (3) the value proposition: What impact will this have on our brand, our stakeholders and our performance?; (3) the evaluation and measurement plan: How do we demonstrate the effectiveness of what we're doing over the long-term?; and (4) Many companies fixate on demonstrating philanthropic impact within the earning season and their own bottom line. However, sustainable development is a long-term process?; and (5) Transparency: How can we be more accountable? Stakeholders want to know what progress you're making. Even if you don't say, "We saved two trees or three kids' lives," what steps are you taking towards your goals? (p.1) Taylor stated that corporate philanthropy must take action in which efforts are made to "adopt an integrated approach upfront. Corporate-philanthropy efforts must adopt an integrated approach upfront. Not only should an organization's philanthropy reflect the consensus of all its stakeholders, it should be part of a company's vision and culture." (2008, p.1)

Taylor also relates that staff can be empowered "across all departments and divisions [by]asking employees to donate some of their time to the effort…" (2008, p.1) it is important to do the research which has as its primary goal the "understanding which causes mean the most to your company and its stakeholders. A lot of companies skip corners with research. Customers and stakeholders want to be asked what causes they want to be advocated on their behalf." (Taylor, 2008, p.1) Taylor states that the company philanthropy should not "steer too far away from its core product and corporate social responsibility which can be integral to product development." (2008, paraphrased) Secondly, Taylor states "Don't reinvent the wheel, but make an impact that speaks to your specific community. For smaller businesses, there are many opportunities to get engaged with not-so-well-known nonprofits that represent a diverse range of causes." (2008, p.1) Taylor states it is best to "choose a smaller group working on that big issue you want to impact -- child welfare, HIV / AIDS, ecology -- that maybe has been around a long time doing great things that have been overlooked. Don't fund the same national nonprofit that all the big corporations already support." (Taylor, 2008, p.1)

Taylor (2008) additionally states that it is critically important to market collaboratively as many companies fail to properly market their philanthropy to key stakeholders in the organization. Taylor states that it is important to make sure that philanthropic programs are communicated to employers, manufacturers and distributors. Corporate social responsibility reports and regular updates are suggested by Taylor as being an excellent method of "…sharing the impact of your philanthropy: how it relates to your brand, product and company values; how it has increased employee productivity; how it has become a source of innovation and growth for both the nonprofits you're funding and the company itself." (Taylor, 2008, p.1)

The work of Andrew J. Felz (nd, p.1) entitled: "Corporate Philanthropy: The Softer Side of Business" states that Corporate Social Responsibility (CSR) has both good as well as bad effects on companies. Four primary ideas are incorporated into CSR including the following principles: (1) economic responsibilities; (2) legal responsibilities; (3) ethical responsibilities; and (4) philanthropic responsibilities." (Felz, nd, p.2) According to Felz Corporate social Responsibility "can help lead us toward lessening some of the economic problems in the United States. By creating a culture that is about the whole company and not just making profits, we can better the society." (Felz, nd, p.4)

Corporate Social Responsibility is not required by law however, many company's have by choice integrated CSR into their business strategy. Felz reports that a survey "compiled by Hill and Knowlton in 2001" states findings that of 2,594 American's over the age of eighteen years, 79% state that corporate citizenship is taken into account when making purchases. It is further reported that findings in a 2002 Cone Corporate Citizenship Study include that "91% of Americans surveyed said they would consider switching to another company if they had negative business practices." (Felz, nd, p.4) Felz points out that the Internet has provided a medium by which companies are able to communicate information concerning the company's contributions and the causes to which the company contributes. The example stated by Felz is that of the Coca Cola Company stated to base its corporate citizenship on four core values as follows: (1) marketplace: which is the best product for the consumer; (2) workplace: which is to uplift their employees and make sure they are treated with dignity and respect; (3) Environment: which strives to protect and preserve the environment; and (4) Community: which helps to develop sustainable communities and partnerships." (nd, p. 5) Foohey (2004) in the work entitled: "Corporate Philanthropy: Strategic in Nature, Poor in Execution" reports a study conducted for the purpose of analyzing the "philanthropy programs of a representative group of Fortune 100 corporations to determine if and how these companies are using their philanthropy efforts productively. The terms corporation, company, firm, and business are used interchangeably to refer to any private sector organization." (Foohey, 2004, p.2) the study reported by Foohey was conducted through the means of a survey/questionnaire of ten corporations including the following: (1) Altria Group; (2) American Express; (3) AOL Time Warner; (4) at&T; (5) IBM; (6) Johnson & Johnson; (7) JP Morgan Chase; (8) MetLife; (9) Pfizer; and (10) PepsiCo. Foohey reports that the following questions were asked in the interviews: (1)

Does COMPANY have a commitment to corporate philanthropy: (a) How is "corporate philanthropy" defined? (b) Does COMPANY have a regular budget for corporate philanthropy? How much is that budget (d) Is the corporate philanthropy tied directly to Company's business strategy: (a) What is Company's business mission and strategy? (b) What is Company's corporate philanthropy mission and strategy? (c)What percentage of annual contributions fall within those corporate philanthropy strategies? (d) What types/categories of organizations does COMPANY contribute to?

Examples include educational, environmental, elderly, healthcare, homelessness, etc. (e) What types/categories of organizations tend to be left off Company's contribution list? (3) How well is the corporate philanthropy program understood by: (a) board members; (b) senior management; (c) middle management; (d) employees; and (e) local residents; (f) consumers of Company's products; (g) investors; (h) those organizations/individuals receiving donations; (4) How is the effectiveness of the corporate philanthropy program evaluated: (a) Are the results quantified? How? (b) Who judges the effectiveness? (c) Describe other ways in which effectiveness is judged; (d) in which years has the corporate philanthropy program deemed to be effective? (5)

How does COMPANY monitor the progress of the organizations to which it gives grants: (a) How often does COMPANY check progress of organizations that receive grants? (b)Are targets established? (c) if the organizations that received grants encounter problems, what types of solutions are provided? (d) Are certain organizations monitored more closely than others? (Foohey, 2004)

Findings in the study reveal that American Express in its definition of Corporate Philanthropy "reflects a strategic outlook and that a regular budget is allotted for philanthropy by the organization stated at $32.2 million which is determined by the percentage of profits. American -- Express began its corporate philanthropic activities in 1954. The study additionally revealed that at&T also defines corporate philanthropy in a manner that is reflective of a strategic outlook and that a regular budget is allotted to philanthropic activities with the amount allotted stated at $39.5 million which is an amount determined by endowment and the company's Board of Trustees. IBM also have a corporate philanthropy that is reflective of a strategic outlook with a regular budget being allotted to corporate philanthropy. There is a regular budget allotted for Corporate Philanthropy and the amount is stated at $127 million determined a percentage of the profits. As well JP Morgan Chase and PepsiCo are interviewed with findings reveling that both companies have strategically aligned CSR and company strategy. There is an allotment for funding of each of these and the amounts allotted are stated at $93 million and $34.6 million respectively. The following table lists the questions and answers relating to the evaluation of the overall effectiveness of corporate philanthropy.

Figure

Source: Foohey (2004)

Foohey (2004) reports the following measures of assistance provided following the assessment of needs of the banks.

Figure

Source: Foohey (2004)

The work entitled: "Business Professionals' Attitudes Toward Corporate Philanthropy and Service During a Recession" published in February of 2009 reports the findings of a survey of attitudes on Corporate Philanthropy and Service During a Recession which includes those stated in response to the following questions and as stated in the list in the following figure.

Figure

Source: Taproot (2001)

Figure

Source: Taproot (2001)

As illustrated clearly in the answers provided by respondents to the survey reported in the Business Professionals' Attitudes Toward Corporate Philanthropy and Service During a Recession" philanthropy is believed by most individuals to be the ethical and responsible thing to do. Even in the economic recession the majority of those surveyed belief that the corporation should still actively practice philanthropy.

Goldman Sachs Foundation

The Goldman Sachs Foundation was created by the New York investment bank's partners when their firm went public in 1999. This Foundation has contributed in excess of $43 million since its inception. Stephanie Bell-Rose, president of the foundation stated that funding is combined with the services and the time of volunteers from Goldman Sachs and this enhances the grants "with their talents and expertise." (Knowledge at Wharton, 2003) a hands-on approach is taken by the staff of the foundation as well.

McCormick Tribune Foundation

The McCormick Tribune Foundation is located in Chicago and is ten times as large as Goldman Sach's foundation. The Tribune has approximately $2 billion in assets and owns both television and radio stations and the Chicago Cubs baseball team. The grant program of McCormick Tribune has been designed for impact as it has a matching-grant program in which it pairs with media outlets and professional sports teams in raising funds for charity. McCormick Tribune has 44 partners including Cleveland Cavaliers, Chicago Bears and Colorado Rockies.

The Verizon Foundation

The Verizon Foundation helps charities effectively operate through attempting to reduce the digital divide. Verizon is the 4th largest foundation in the U.S. And grants approximately $75 million each year and operates in 48 U.S. states. The assistance provided by the foundation to fellow charities includes $240 grant to be used by recipients in choosing their Internet service providers. Approximately 750 of these grants are given out each year. More complex projects are also taken on by Verizon and for example Verizon assisted 115 chapter of the Urban League in the U.S. In linking electronically with one another through a $2 million grant beginning in 1995 and running through 2000.

Cisco Systems

Cisco Systems is reported to have a "broad-based philanthropic program with both a corporate philanthropy division and separate foundation." (Knowledge at Wharton, 2003) the most innovative program is one that "let it turn difficulty for the company into a windfall for the nonprofits it supports. At the onset of the current economic slowdown, Cisco did its first layoff ever. But rather than just cutting everyone loose, it proposed an unusual arrangement to a few "high-potential employees," it offered to keep paying a third of their salaries if they would go and work at nonprofits for a year." (Knowledge at Wharton, 2003)

Nike Company

Nike is also stated to be committed to corporate philanthropy and it is reported to have "joined with Boys and Girls Clubs around the country to promote physical fitness among kids and teens. Nike calls the campaign NikeGO and has loaned the initiative its considerable marketing muscle. Nike created a website and has recruited two athletes who use Nike gear as spokepersons for the company. Nike is presently doling out $50,000 grants which are one-half cash and one-half in products in 32 clubs and in 16 cities in the U.S. Additionally, Nike is providing funding for repairs to playgrounds in cities and game courts as well as working in cooperation with a physical-education research center in San Diego State University in developing 'PE in a box'. This product is designed for teachers of fourth and fifth grade elementary school students and provides a guide for the curriculum and equipment that is custom-designed.

AN INVESTIGATION of the IMPACT of CORPORATE PHILANTHROPY on the DEVELOPJMENT of Business

CHAPTER THREE - METHODOLOGY

A case study is best understood as "a narrative, based on actual events, that creates an opportunity for conversation, problem analysis, and virtual decision-making." (NASA, 2008) the case study that is effective is one that "creates an opportunity for conversation, problem analysis and virtual decision-making." (NASA, 2008) This is accomplished through placement of student or workshop participants in a position to think through choices faced by decision-makers in real-life situations. By confronting actual scenarios, participants develop and refine analytical skills for solving similar problems in their own projects." (NASA, 2008) a case study involves collection of evidence through documentation and includes the review of formal studies and evaluations. (Evans, 2006)

Case studies are of the nature that recount "…real life business or management situations that present a dilemma or an uncertain outcome to business executives. The case puts the scenario into the context of the events, people and factors that influence it." (the Case Method, 2006) the Case Study was "pioneered in the early 20th century at Harvard University…" (the Case Method, 2006)

The rationale for the case method is that "…organizational learning is most effective when knowledge is shared in usable ways among organizational members and that knowledge is most usable when it is contextual -- when it relates to one's own experience." (GSFC Methodology-1, nd) Decision-oriented case studies are stated to be "structured and written from the viewpoint of a key player, the protagonists. They are framed around information available to the protagonist at the time of the event." (GSFC Methodology-1) the case is stated to typically build "to a point where the decision-maker is confronted with open-ended choices. The reader is left to analyze the information and scenarios and then make critical decisions based on contextual analysis." (NASA, 2008)

Yin (2004) states that the "distinctive topics for applying the case study method arise from at least two situations. First, the case study method is stated to be pertinent when the research addresses "either a descriptive question (what happened?) or an explanatory question (how or why did something happen?): in contrast a well-designed experiment is needed to begin inferring causal relationships…" (Yin, 2004, p.2) Secondly, the case study method enables the researcher to make "direct observations and collect data in natural settings, compared to relying on 'derived' data." (2004, p.2) According to Yin "a key demand of the case study method is the investigator's skill and expertise at pursuing an entire line of inquiry at the same time as data are being collected." (2004, p.3) Yin states that a good case study design "…at a minimum involves: defining your case, justifying your choice of a single- or multiple-case study, and deliberately adopting or minimizing theoretical perspectives." (2004, p.4)

This present case study has reviewed information in the form of journal articles, professional reports and other material in the nature of peer-reviewed professional reports and other case studies in this area of inquiry.

AN INVESTIGATION of the IMPACT of CORPORATE PHILANTHROPY on the DEVELOPJMENT of Business

CHAPTER FOUR -- FINDINGS

The research questions posed in this study are the questions of: (1) in what aspect is the function of corporate philanthropy significant towards development of the corporation? (2) to what extent does corporate philanthropy effect the development of the corporation? (3) How can the corporation ensure that corporate philanthropy influences the development of the corporation? And (4) How and why does the corporate philanthropy contribute to the competitive advantage?

Findings in this study include the finding that the successful enterprise that achieves its goal is one in which the efforts are focused "above the line" (Farrar, 2008, p.1) Furthermore, when the efforts of the organization are linked closely to the core business operations there is a greater opportunity present for sustainable and long-term impact and for building a greater social legitimacy. One method identified for delivery of social responsibilities of an organization is through the means of corporate philanthropy also known as 'Corporate Social Responsibility' programmes. Through adaptation of the core business practice the organization is enabled to have a greater impact on development than by means of corporate philanthropy alone.

The work of Burnell (2006) has informed this study that corporate philanthropy's meaning to business development is one that may directly impact business development and growth and results in an "improved standing" for the business in the community and provides many opportunities for networking. When the investments in corporate philanthropy are company-related and includes employees, customers and others that the company has a desire to influence the initiative is more successful. Two means of corporate philanthropy have been found to be existing include those of direct donations and corporate sponsorships.

Corporate sponsorship is held by Conant to be more desirable because this allows the company to manage the sponsorship and thereby exert more control over the investment and the company's involvement in the sponsorship which presents excellent opportunities for relationship building. Conant also has informed this study that the organization that exercises caution in the philanthropy planning and who links the community goals with the core business operations will experience a much easier time when attempting to balance the complex decisions relating to corporate philanthropy. Furthermore, Conant has informed this study that tying the company's philanthropic activities to the company's mission and business success strategies enables the corporate giving and it becomes just as much a factor in the health of the business as is any other function of the business requiring the CEO's attention.