Discuss below in a 3 page:
Research, define, and discuss what strategic philanthropy is and why it is beneficial to organizations, as well as give one example. 2-3 pages
Strategic Philanthropy
The word philanthropy means to take steps to improve the lives of other people. Strategic philanthropy is developing a plan of action to align the goals of an organization with taking the steps to improve the lives of others. Even though America is a capitalist society that allows for competition and does not require businesses to be philanthropic, the business that takes social responsibility and gives back to society will build a stronger brand than the company that does not. Strategic philanthropy can position a company in the market to be more successful and to increase their bottom line.
When a company gives back they build stronger relationships in the community resulting in stronger customer loyalty and higher employee retention. When customers are loyal they will continue to see out the service of the company and will spread positive word of mouth. Companies that give back show customers they are invested in society and are willing to take steps to improve the community. While the company must give back they cannot give to everyone that asks and must choose carefully where their philanthropic finds would be applied. This is strategic philanthropy.
Strategic philanthropy can differentiate a business in a particular market and make them stand out from the competitor. Companies that give back to their community establish strong values and strong reputations in their community. When the company selects philanthropic interests it provides a mechanism in which to promote the values of the company (Green, 2013). Strategically the philanthropic interests of the company should align with the product or services that are sold by the company. A perfect example would be Kroger.
Kroger is the largest grocery store chain in America. In 210 the company gave away 10% of their profits in 2010. Kroger took 64 million dollars in food and donated it to food banks and the Food for Less Program to help relieve some of the hunger in the country (Emerson, 2011). The company also raises money at Christmas for the Salvation Army and military families raising 1.5 million in 2010. Because Kroger is a grocery store that sells food choosing philanthropic interests that align with the products they sell was an example of strategic philanthropy. Kroger sets aside a percentage of their earnings to help address important needs in society.
Instead of contributing to a bunch of charities Kroger contributes large amounts to stopping hunger. Kroger applies strategic philanthropy in that they established the Kroger Foundation to support national initiatives to stop hunger and to support other philanthropic interests (Emerson, 2011). Through this foundation Kroger has shown they are a socially responsible and willing to give back to society. The company has established a strong reputation and a strong brand which has allowed them to rise to the top of the grocery food market. Giving back to the community has resulted in many benefits for Kroger and society.
Strategic philanthropy provides more benefit for the organization than just giving money to a bunch of charities. It is important for the company to give back to the community but in giving back the company must benefit and it must not cause any financial hardships. Part of strategic planning is determining how much to give and who to give to. Kroger has chosen to give 10% of their profits to charities and has chosen specific charities to give back to instead of just spreading the ten percent around. By focusing on feeding the hungry Kroger can provide more help in one area.
References
Emerson, G. (2011). The 10 Most Charitable Companies in America. Retrieved September 30,
2014 from https://p.bankrate.com/yho/Default.aspx?t=m&$key=13&$pid=yhof3
Green, W. (2013).What is Strategic Philanthropy? Retrieved September 30, 2014 from
https://truist.com/what-is-strategic-philanthropy/