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Strategic philanthropy involves companies partnering with non-profit organizations to perform charitable actions, which can increase brand awareness and lead to indirect financial benefits. This can involve donating money, providing resources, or establishing long-term relationships with charities. The positive association with a worthy cause can influence consumer behavior and ultimately benefit the company’s bottom line.
Strategic philanthropy is a business concept whereby companies perform charitable actions and receive indirect financial benefits from these actions. The process usually involves a company entering into some kind of partnership, either for a project or long term, with a not-for-profit organization. In the process of strategic philanthropy, the corporation is able to accomplish good for society by using its funds or other resources to help a worthy cause. The tangential benefit of this action is that the company’s brand awareness increases and the public can form a positive association with the company, which can help the company’s profits in the future.
Most of the big companies are involved with different charitable causes. These companies can be important sources of funding for non-profit organizations as they can provide the type of funding that non-profit organizations would not be able to obtain anywhere else. While a business usually needs no reason to help charitable causes other than the simple desire to help, it can secure some knock-on benefits to its bottom line in the process. This is where the concept of strategic philanthropy comes into play.
To execute strategic philanthropy, the company must form some type of relationship with a not-for-profit organization. This can occur simply when a company donates money to the non-profit organization’s cause of choice. A company might even get more directly involved with a charity, providing valuable resources to the cause or even having its employees volunteer at an event. In certain cases, a company may even establish a long-term relationship with a not-for-profit group, acting as a corporate sponsor.
One of the most important aspects of marketing is brand awareness and strategic philanthropy is an excellent way for companies to achieve this. Brand recognition basically means that when a consumer gains knowledge of a particular company and feels comfortable with it, he or she is more likely to buy goods or services from that company. A positive relationship with a worthy charity can certainly make consumers feel good about a specific company.
As a result, the strategic philanthropy performed by a corporation can remain in the minds of consumers when they have to decide between different alternatives to meet their needs. That way, not only does the business help a worthy cause, but the cause-related marketing in turn helps sales and profits. Companies must always ensure the benefit of charity comes first in these agreements, otherwise the effect on public perception could be the opposite of what was intended.
Asset Smart.
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