Is Philanthropy CSR?

Published on November 4th, 2010 | by

I’ve been pondering this question for quite some time and as far as I’m concerned, the answer is still unclear. Without analyzing the specifics of what CSR is (100 different people may give you 100 different answers), I’ve always broken things down into two camps. One side would be companies that have formulated their business plan, mission and values around not only making money, but helping to improve society as well. The first company that comes to mind and perhaps the first to embrace this idea is Patagonia. The other camp is much greater and could really be made up of any company that has decided either for marketing purposes or in fact for legitimate fiscal, social and environmental reasons, to pursue CSR initiatives (this is obviously quite general, but could mean increased recycling, higher labor standards, less water usage etc.).

Many of these initiatives are new to the capitalist conscience. However, some of the country’s first great capitalists such as Andrew Carnegie and John D. Rockefeller gave away much of their wealth to fund various social causes. Of course this was during the early part of the 20th century before anyone had heard of the environment (although one could make the case that much of the money was made based on businesses that were ultimately harmful to the environment). Regardless, philanthropy seems to be the move for companies (particularly large corporations) to dip their toes in to the world of CSR. Of course, just like an individual donating money, it is a passive activity and one that may have varying results. That is not to say it is not useful or admirable, just that it is something that is does not ultimately change business strategy like aforementioned CSR measures often do.

As any sustainability director can attest to, it is difficult to integrate CSR measures into an existing business model, particularly one that is bureaucratic and has already achieved success for a number of years (if it ain’t broke, don’t fix it). Businesses that are just starting out have the advantage of incorporating aspects of positive social and environmental outcomes into their business models and hopefully position themselves to achieve financial success. Most likely, these are not the companies engaging in philanthropy, mainly because they don’t have a lot of money in the start-up to growth stages, but also because the business models are proactive as opposed to reactive when it comes to CSR.

So does a company that gives money away to charitable causes engage in CSR? Of course CSR means different things to different people, but to me it stokes images and thoughts of active, rather than passive engagement.

Image Credit by robinsonfilmcenter via Flickr under a CC license


About the Author

Jonathan has worked in both journalism and various facets of small business development over the past eight years. Most recently, he graduated from the Monterey Institute of International Studies (graduate school of Middlebury College) in 2010 with an MBA and an MA in International Development Policy. His interests include SME development and its role in economic growth, particularly in Sub-Saharan Africa as well as how CSR/Sustainability measures impact both business operations and the communities in which businesses operate. While at MIIS he worked as a summer fellow involved in small business consulting in Accra, Ghana and was an active member of the MIIS Net Impact chapter. As a life long traveler, Jonathan has been fortunate to have lived in, worked in or visited over 20 countries on 5 continents and he truly hopes that he will be able to continue this trend.
  • If you are asking if philanthropy is CSR then I can’t be certain you know what CRS is, does and is about. Philanthropy is just one element of CSR and only one. There are seven aspects that comprise CSR.

    • Jbanco

      Maggie- I think you would find that few people agree on exactly what CSR policies comprise, which is part of the argument I was making in this article. I am not familiar with Jepstein Reeves or the fact that CSR has been defined within seven universally accepted pillars, however any information/sources you may be able to point me to would be a great help.

      I apologize if I wasn’t being clear in the article, but my point basically boils down to the question of if a company solely engages in philanthropy, can they consider their company engaged in CSR. It appears that we agree that they can not.

      • Cindy

        I’m with you, Jonathan. Philanthropy should be considered a very small part of a company’s CSR strategy. It doesn’t matter how much money a company gives away if it’s business operations damages the community and environment.

  • Matter of fact, may I suggest a @JepsteinReeves on this very distinction. Why, he is one that makes the whole CSR – Philanthropy distinction very clear in a far more profound way than I, with all do respect!

  • Thanks Maggie for the shout out!

    Indeed, the article points to something that is all true – people confuse philanthropy & CSR and think they’re synonymous.

    To answer your question Jonathan – I agree, we cannot give credit to companies for engaging in CSR when all they do is engage in philanthropy OR even philanthropy & cause-marketing.

    Precisely because of this common confusion of terms, I created a list of definitions on these terms, both on my blog http://www.citizenpolity.com and my company’s site: http://dowelldogood.net/?page_id=446

    While I would hesitate to say that my definitions are bullet proof, we did a lot of research and we were very careful with our words.

    Long and the short of it is, philanthropy IS a part of CSR, but CSR is NOT just philanthropy.

    • Jbanco

      James, thanks for weighing in. And I think we agree on your last point. I’ll be sure to have a look at the the work you’ve done on the two links you provided. But what the important issue is here and what Cindy summed up rather succinctly is that it while giving money and time is important and appreciated they have little to do with the actual impact of the core business on community and society. For instance, oil companies give millions of dollars and probably plenty of employee hours of time away each year which is great, however their core business has also led to various human rights and environmental abuses around the world. Only a change in company policy can affect that.

  • Planned giving and community driven initiatives make CSR more meaningful.