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Yash Gupta
Business School Dean

Yash Gupta

Yash Gupta is Professor and Dean of The Johns Hopkins Carey Business School.

Dividends of giving

The need for corporate philanthropy has never been greater. Unemployment in the United States is at more than 10 percent. Countless people have lost their homes. Many cannot afford health care. Around the world, millions are without food and clean water. Philanthropy is certainly no panacea, but it can go a long way toward addressing serious problems here and abroad. Few entities can match large corporations in their ability to dispense the level of funds that make a positive difference.

If the moral imperative is not enough to inspire a corporation to act philanthropically, then it should consider the dividends it can reap for itself from charitable giving. Philanthropy increases the visibility of a company. It enhances the reputation of the business and, by extension, the reputation of its products. Consumers are more likely to embrace a company if they know that it is producing environmentally friendly products, and they will do the same if they know the company is contributing philanthropically to the well-being of society.

Corporate philanthropy must be strategic. Money just can't be handed out willy-nilly; it must be done with proper goals. For example, a company might devote its giving to education, because the company has decided that it has a better chance to succeed if it operates in a community with outstanding schools. Corporations cannot succeed in failed communities.

And make no mistake, the corporate image is in need of repair after the shady activities of recent years - many of which can be traced to focusing singularly on the maximization of share value. Stock price mostly indicates past performance; it might not indicate where a company is going. This kind of approach is entirely inward-looking. Philanthropy, on the other hand, is very much about the future - not just the future of society but also the future of the company. From any angle, corporate giving is a wise investment.

By Yash Gupta

 |  November 17, 2009; 10:20 AM ET
Category:  Corporate leadership Save & Share:  Send E-mail   Facebook   Twitter   Digg   Yahoo Buzz   Del.icio.us   StumbleUpon   Technorati  
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