To adhere to philanthropic principles in business is a part of the concept of corporate social responsibility, and in that concept, it is called corporate philanthropy. Applying this type of philanthropy companies can demonstrate their values and beliefs to their employees, partners, customers, and public. By giving support to the community, whether financially, or in goods and services, companies show that they understand the needs of that community and its people. It is good to distinguish this from the concept of sponsorship, which does not only indicate giving some service, but exchanging service for money or some other resource, and is regulated by a contract. Giving, in terms of corporate philanthropy, finds its motivation in the positive social change or supporting a particular social value.
Different ways of giving
• Directly respond to requests – the company can donate, give service, or its product responding directly upon request received deciding which requests to approve. In this method, a question arises on the success in the distribution of resources and the quality of programs or organizations that the company intends to finance.
• Design and develop a plan of giving through public tenders on the basis of previously decided criteria – the company can strategically decide its priorities and criteria in accordance with the values it wishes to represent and its desired social influence and using those criteria, organize tenders for third parties to apply to. This method of giving includes the operational cost that accompanies the process all from collecting applications up to signing contracts and follow-up of the results.
• Establish a company’s foundation whose employees manage the donations – this is one of the most effective ways of donating and funding in the case of large companies and the considerable amount of resources they allocate for donations. The company thus strategically designs the work of the foundation and forms a permanent structure to control its donations and its actual social impact.
• Select organizations who deal with social issues or solve problems, and whose values are consistent with those of the company and then form a partnership agreement to finance or support their activities – the company controls its resources by giving donations to carefully chosen organizations and thus forms a convenient way of using its funds, without it requiring much additional engagement or costs. This system may include the problem of lack of transparency in the selection and monitoring of the use of funds and the activities that are financed.
• Cooperate with a partner Foundation on a specific project and thus provide services or resources or give money to selected trust funds for agreed purposes that provide funding for different organizations through programmed tenders – in this way the company actually employs professional help to allocate their donations, control whether the resources are used in the agreed purposes, and follow up the financed projects.
While corporate philanthropy often implies donating funds, it has a greater meaning. A company that wishes to give can donate its own products provide space or other property for use (e.g. tools and machines), their own service (e.g. professional help from the ranks of their own employees or formation of volunteer groups among employees - often called corporate volunteering), or organize a charitable activity.