THE BLOG
06/09/2014 01:40 pm ET Updated Aug 09, 2014

Profit and Generosity Aren't a Zero-Sum Equation -- They're Reinforcing Values

Global philanthropy as a tool for driving business growth is a phenomena that is truly unique to the United States. It is inspired by genuine acts of compassion by the donor. It is also inspired, at the very least, by our corporations as the fulfillment of their enlightened self-interest.

A 2013 study by The UK Based, Charities Aid Foundation, found that the United States is #1 in the world in terms of participation in giving and also has the highest value of individual giving as a proportion of GDP at 1.45% or $250 billion. By comparison the study also found that In the United Kingdom individual giving as a proportion of GDP is 0.45% or 9.3 billion pounds.

Americans approach this differently than their European counterparts. Why? The reason lies at the core of who we are and how we grew.

The tradition of American philanthropy has its roots in our country since the very first pioneers touched down on our shores; many historians believe the earliest instances of volunteerism in America began as colonists formed support systems to survive the many challenges that came with relocation.

Togetherness was vital for survival. It was a lesson which was not only learned, but remembered and lived out by future generations. Volunteerism today is embedded into American corporate culture. Serving as a living breathing expression of corporate America's commitment to their local communities. Volunteerism while serving as an important moral imperative is also a smart business practice - whether it is at home or abroad.

According to the Cause Marketing Forum, US Corporations spent over $1.7 billion on cause sponsorship, generating almost $40 billion in consumer activated sales in 2013. Through the cause platform, Corporations are able to build equity into their brand by attaching their name to causes that resonate among consumers.

Predominately the domain of companies within the Business to Consumer (B2C) segment, but increasingly in play among those within the Business to Business (B2B) space, many US companies have discovered building brand equity through the Corporate Social Responsibility platform is, in fact, a wise business decision. Why? According to Cause Marketing Forum again, American consumer are 89% more likely to render a spending decision on the basis of brand reputation. This is particularly true for millennials.

A recent visit to the Wilson Center by Dr. Kissinger provided a unique perspective on the world in the twenty-first century. Dr. Kissinger offered his opinion on matters as far reaching as the recent crisis in the Ukraine, the future of NATO, and US-China relations.

But of all the comments made by Dr. Kissinger on that beautiful spring day in Washington, the one observation that stuck with me was his depiction of the world in the 21st century. In describing the global environment of today, Dr. Kissinger remarked: "We are living in an era of unintended consequences."

The importance of creating brand equity amidst the uncertainties and unknowns of the 21st century cannot be understated. The importance of mobilizing the power of your brand to determine outcomes of your own choosing must not be underestimated.

Recent corporate history is littered with companies who ran into trouble on the basis of unforeseen events, and had no reserve of goodwill to fall back on.
Corporations must invest in their brand. CSR functions must be embedded in into their risk management practices. CSR functions must be embedded into their HR practices. CSR practices must be embedded into their corporate communications strategies.

Corporate Social Responsibility at its very best, is the convergence of enlightened corporate self-interest, with those of mission based non-profits or international NGO. At its very best, it should embody what Harvard Professor, Michael Porter, describes in his theory of shared value. According to Porter, twenty-first century requires a new model for business: "Capitalism is under siege...companies are widely perceived to be prospering at the expense of the broader community..."

The answer according to theory is found at the intersection of a company's goals and the needs of the community in which it operates.

The principal of shared value has successfully found expression in the Global expansion of some of our nation's most storied corporations. The success of companies like State Street Corporation and Honeywell is influenced -- in part - by the incorporation of their global philanthropy efforts into their global growth strategy.

Profit and generosity aren't a zero-sum equation. Profit and generosity are reinforcing values.

Profit and generosity has capitalized micro-enterprise facilities in some of our planet's poorest communities.

Profit and generosity has extended lifesaving vaccinations for some of our planet's poorest inhabitants.

Profit and generosity makes us better.