These days it’s trendy for corporations to be involved in the community. Huge corporations donate thousands and even millions of dollars to support causes ranging from financial literacy to childhood cancer. Does a corporation really care about such things?
The answer can go either way. The corporation doesn’t really care about social issues so long as their profits stay steady or grow. But on the other side there are people within the organization that care very much about various causes. The workplace is a great place to rally more people in support of your cause, since you spend 40 hours a week with these people.
Obviously I’m on the side that says corporations really don’t care about social responsibility. They do it because someone within the organization thinks it’s a good idea and was able to convince someone in charge that it will somehow raise the company’s image.
My bitterness with this topic started with my hatred for large conglomerate charities like the United Way. They spend millions each year just to raise more money. Make a $1000 donation and it might just go to cover the postage on 2200 letters sent to others to raise more money. Hardly the tax deduction I was looking for.
But my biggest beef corporate social responsibility is that it ignores the two focuses for the company: shareholders and customers. Corporations serve their customers in the best way possible that maximizes shareholder value. I just don’t see how a local branch helping to build a Habitat for Humanity house will benefit customers or shareholders. How’s about the corporation focus on maximizing value to customers and let the customers do what they want with their money.
Even if the do-gooding by corporations does help the bottom line, it still feels dirty. It means that the do-gooding in the community is nothing more than another branch of their marketing strategy. “We employ the community, and then we give back to the community”. Sounds cheesy, and it is. Well of course you employ the community, who else are you going to employ? And you give back to the community so you can brag about it in commercials.
Personally, when my back charges me $2 to use an off-network ATM and then gives a quarter to the United Way, I’m a bit upset about it. Give me the quarter back and let me decide if I want to give it away or not. Or, since I’m a shareholder in the bank, pay it out in a dividend.
I’d like to conclude that I don’t think it’s bad for corporations to be involved in charities. I like the PetSmart method. When you check out they ask if you want to donate a buck or two to the Humane Society or some other pet organization. It’s the guilt method. But they’re donating your money for you, you have a choice. I employ a similar tactic on Weakonomics. If you donate to me, I donate half of your donation to a foundation that promotes financial literacy. But I tell you this up front, and even use it as a vehicle to convince you to donate more. I don’t donate my personal earnings. That’s my money. And I’ll choose who I want to donate it to when I feel like it. One thing is for sure, I’m not going to walk around talking about who I donate it to; and if I choose to donate to my back pocket, then I’m just practicing good corporate responsibility.
 By The Weakonomist |
The Weakonomist is the founder of Weakonomics. Clicking the picture of the puppy will tell you more about him. If you like what you're reading consider subscribing to the blog, following him on Twitter, and checking out the related posts below. Please consider a donation if you really enjoy Weakonomics. Also keep in mind that nothing I say can be construed as financial advice. |
