Donating or giving back to the community is something deeply espoused by many big companies. The over-arching impact on the communities can’t be downplayed obviously but the underlying motivations behind such acts are quite varied. The many social-economic ills bedevilling society epitomize why most companies would venture into altruistic initiatives of extending a helping hand. It’s common place the world over that big corporations always involve themselves in channelling financial or material assistance to immediate & distant communities. Locally, we have quite a number of big companies that do donate & give back to the community, some few examples being Econet, Delta, Nyaradzo, CBZ etc. Some might be curious as to why big companies would make donations or give back to communities; this article discusses some of those reasons.
Corporate Social Responsibility
Over the past several years, this CSR aspect has steadily grown to be something that’s now a must-do for big companies. You’ll find that some investors won’t even release funds for a company that has no proven track record of CSR. In most ways it has become almost an issue of compliance where a company, liking it or not, is supposed to do some community developmental programs. CSR is now quite akin to how a company ranks or is perceived amongst other companies.
Tax Cuts/Exemptions/Reliefs
This depends and varies from country to country. The legislative & compliance framework that governs this isn’t the same for every country and depends on what industry the company falls under. Basically, how it works is that a company can qualify for tax benefits if they channel certain amounts of money towards charitable activities. Therefore this can serve as an underlying motivation for engaging in such activities. In the process a company ends up saving on money they would have given up had they not done community development programs.
Boosting Public Image
People generally have a natural affinity for associating themselves with brands that are involved in worthy causes. Thus, by actively donating and giving back to the community, a company increases its attractiveness to prospective customers. This results in a spike in customer inflows which results in increased revenue & profitability for the company.
A Reflection Of Company Owner(s)’ Personal Values
Some companies will do charitable activities simply because the owner(s) have a deep-seated culture of helping the less privileged. Thus, their personal values will just permeate and reflect on the company’s conduct. Knowing that you are impacting other people’s lives brews in you a sense of worth, satisfaction & accomplishment. Most company owners have altruistic attributes embedded in their value & belief system and that ultimately bears on company culture.
Boosting Employee Motivation & Morale
Studies have shown that if you involve your employees in community developmental programs, it boosts their work ethic significantly. Some companies even go as far as convincing employees to contribute portions of their salaries to add onto to funds the company will contribute towards charitable activities. So some companies will engage in such activities so as to enhance their company’s performance by virtue of strong work ethic inspired by happier & more fulfilled employees.
Creating Shared Value
This refers to when a company addresses a community challenge which when resolved will have a direct positive effect on the company’s operations. Thus, there will be a symbiotic effect in that the community will benefit whilst the company also benefits. Let’s suppose there are water and food shortages in the vicinity of a company of which most of the company’s employees will live within that area. If the company addresses those challenges, that will lead to a healthier & productive work force; and that will optimize the company’s productivity.
As An Investment
There are many ways in which a company can do this; I will illustrate this by an example; a company can create a scholarship program for brilliant underprivileged kids, sponsoring their education. Then after completion of their studies they will be subsequently be given employment within the company. That passes off as an example of an investment whereby you make an investment meant to cater for your future human resources needs. So basically some companies make donations or give back to communities with the aim of receiving a return in the future.
Brand Awareness & Advertising
Making donations or doing community development projects can be an effective way of promoting a company’s brand or advertising. Other than the obvious publicity that comes with such activities, a company can brand everything & make available material that will enlighten people on products or services they offer. Thus, a company can tailor such programs to impact communities but with a stronger focus on brand awareness & advertising.
As A Form Of Political Currency
This can be riddled with a lot of controversy but it is quite prevalent. Some companies make donations or give back to communities with the disguised intention of earning political goodwill. This will be meant to better position them for political favours & preferential treatment. On the bad side such donations can be cover-ups for hidden political agendas that will be at play. This means the donations will appear as if they are meant for community development but that will all be a front to disguise from the real agenda. This is obviously heavily criticized but I only mentioned it because many companies the world over do that.
In conclusion, whatever the reason for the donations, in the majority of cases the communities end up benefitting. I believe it’s imperative in any scenario that such donations be done with the right intentions and for the right reasons. The roles big companies can play in bettering the lives of underprivileged or marginalized communities are quite significant. For those businesses who are looking to consider philanthropic activities I would encourage them to do so; our nation needs more & more helping hands.
