Why Philanthropy?

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Corporate philanthropy is gaining popularity due to the variety of benefits and ways to participate

Randy D. Podolsky, Principal

According to the Harvard Business Review, in the early 2000s corporate philanthropy was on a decreasing trend. Many companies found that participating in philanthropy was a double-edged sword: While the public was constantly demanding more corporate giving no matter how much a given company had already contributed, company investors requested less philanthropy in order to maximize profits.

While this is still an issue facing many businesses the fact is that, for companies that choose to “invest” in giving to their community, philanthropy can provide myriad benefits. These include positive publicity and relationship building.

Philanthropy is not limited to specific types of organizations or fields of business. The real estate industry, for example, has become deeply involved in philanthropy in the past decade and is predicted to continue this growth due to the mutual benefits reaped by the party receiving the donation as well as the benefactor. While philanthropy most often brings to mind monetary donations, those in the real estate industry there is also the opportunity to donate land and buildings to non-profit organizations.

Tom Parker, President of the Hutton Parker Foundation, gained the title of “The Philanthropic Landlord” because of his success providing real estate assistance to non-profit organizations. Parker uses the Foundation’s funds to purchase commercial buildings at a low rate and leases the space to non-profit organizations at a cut rate. While this act allows the charitable organization to grow, the Foundation aims to serve a bigger movement as well. The Huffington Post quoted Parker saying, “If money is in too few hands, it doesn’t work – capitalism doesn’t work. It implodes. I understood all that. So … okay, recirculate wealth.”

Although it may not always be immediately evident, philanthropy has a positive domino effect. While a philanthropist may think he/she is supporting one specific cause, philanthropy’s ripple effect impacts multiple aspects of both the benefactor’s and the beneficiary’s businesses as well as benefiting the overall economy.

KEY POINTS:
  • Philanthropy doesn’t just benefit the recipients: While one would like to believe in selfless giving, benefactors participating in philanthropy indirectly promote their business and build strong relationships.
  • In Philanthropy, money isn’t everything: Monetary donations are just one way to support nonprofit organizations. Real property donations provide organizations with tools to grow and make a bigger impact on society.
  • Philanthropy improves the economy: Philanthropy helps circulate money in the economy. The more frequently money changes hands, the more likely the amount of transactions will increase, which in turn leads to a healthier economy.