Corporate Moral and Ethical Duty to Charitable Giving

Defining Morality and Corporate Obligation

In determining the moral duties and obligations of a successful business, it is important to first define the concept of morality — both as it is understood in society and in dictionary terms. Morals refer to standards of conduct as understood by society as a whole. These standards relate closely to the social concept of the good/bad dichotomy at any given moment in history. The concept of good, moral conduct today is therefore the product of centuries of moral human evolution. In addition to social standards, good moral conduct may also be driven by the demands of an individual's conscience and their personal sense of right or wrong. In short, moral principles are based upon an inner, psychological sense of obligation and standards of conduct that best benefit both the individual and the social circle within which the individual lives.

In terms of corporate responsibility, the central question is whether successful corporations have a moral duty to make charitable contributions on the basis of "giving something back" to the community. The answer argued here is that they do. Businesses function within a community, and that community — through its buying habits — is what determines the success or failure of the business. If a business is successful, it is obliged to the community that helped bring about that success. Contributing to charitable organizations is one of the most direct ways to achieve this, creating a mutual benefit for both the company and the community in which it operates.

The Business Case for Charitable Contributions

Contributing to charities considerably enhances a company's image in the community and can serve as valuable advertising for the company's name. Many charities offer businesses the opportunity to display company logos on their notice boards or in other prominent locations within their facilities. When the community understands that a company is concerned with more than just the bottom line, people may be more inclined to support that business — and thereby indirectly benefit the charity as well. Mutual benefits are thus derived from collaboration with charities, both in terms of advertising and in terms of strengthening the company's image in the public mind.

Another factor is that the increased wealth of the middle class has led to more people caring about issues beyond their immediate concerns and needs. There has been a sharp rise in interest and concern for the less fortunate, as well as for environmental issues such as the protection of fauna and flora and the reduction of pollution. Contributing to charities can therefore also be a means of gaining ground in this growing market of socially conscious consumers.

This is the premise of proponents of corporate social responsibility. According to Edward Teach (2005), Google search results demonstrate the growing popularity of CSR in the public mind. The term "Corporate Social Responsibility," for example, yielded 4,680,000 search results, while "shareholder value" yielded 2,340,000. These figures illustrate the relative weight that these concepts hold for consumers. The sense of social and moral obligation has driven consumers, nongovernmental organizations, and investors to become increasingly conscious of charitable causes. Companies are following suit by widely advertising their efforts to contribute to charitable organizations and to share their success with the communities that support them.

Conclusion

Fraser, Bruce W. (2005, February). Corporate social responsibility. Internal Auditor. Database: FindArticles.com.

Stavins, Robert N. (2006, April). The market for virtue: The potential and limits of corporate social responsibility [Book review]. Environment. Database: FindArticles.com.

Teach, Edward. (2005, December). Two views of virtue: The corporate social responsibility movement is picking up steam. Should you worry about it? CFO: Magazine for Senior Financial Executives. Database: FindArticles.com.