If you own a business there are ways to give beyond personal fundraising. Within business, philanthropy is often approached as one aspect of the wider question of corporate social responsibility (CSR). A CSR strategy typically involves an organisation collecting money or pledging time to a chosen charity or other worthwhile project; often this will be a local organisation, allowing the business to give back to its local community. CSR is relevant for businesses of all sizes, not just global organisations.
CSR can also encompass any other aspect of how a business addresses its social and environmental impact and its relationships with its suppliers and employees. Given its broad application, CSR is perhaps better thought of as a philosophy of how a business is run, rather than a range of initiatives. One well-known example is Google's unofficial motto: "don't be evil”.
As well as satisfying philanthropic instincts, CSR can also be motivated by business benefits such as:
- Meeting demands from shareholders, customers, and governments;
- Improving staff satisfaction/culture; and
- Enhanced reputation
While CSR is typically a voluntary matter, the reforms made by the Companies Act 2006 have introduced a limited element of CSR-type concepts into directors’ decision making. In terms of section 172 of the Act, company directors have a duty to promote the success of the company for the benefit of its members, having regard (among other matters) to:-
- The likely consequences of any decision in the long term.
- The interests of the company's employees.
- The need to foster the company’s business relationships with suppliers, customers and others.
- The effect of the company’s operations on the community and the environment.
- The desirability of the company maintaining a reputation for high standards of business conduct.
- The need to act fairly, as between members of the company.
The introduction of CSR concepts into company law reflects its perceived long-term benefits to business as well as wider society; this is because the prospect of generating long-term sustainable growth and improving a business’s reputation and image can only be of wider benefit to business. CSR is also more challenging than an isolated act of philanthropy, such as a charitable donation or sponsorship, in that it requires businesses to consider their overall effect on the community, rather than separating charitable activities from the philosophy behind their day-to-day business.