Corporate Philanthropy: When Does it Benefit?

Of course, in terms of overall goodwill to the human condition, corporate philanthropy always benefits. But if you're a nihilist (I don't recommend it), you may want to know when corporate philanthropy pays off and when it doesn't. With that in mind, UPenn's Wharton School offers some salient stats for your perusal. The one kicker is that the top 25% of advertising-intensive companies have philanthropy rankings more than double the bottom quarter in advertising intensity.

Not surprisingly, retail and consumer oriented industries benefit most from corporate philanthropy. Companies with products that are less differentiated -- oil, for example -- also benefit the most from corporate philanthropy. Says the report: "corporate philanthropy can have both positive and negative impacts on profits, depending on what industry you're in." By proxy, the advertising intensive industries are most often the most competitive; in such industries, corporate philanthropy helps a company differentiate from competitors. In an industry like steel, though, corporate philanthropy may even hurt the bottom line.

Corporate Responsibility image by Chance Gardener [cc, 2.0]