BrandArena: Unpacking The Difference Between CSR And Corporate Philanthropy

Tuesday 11 August 2015

Unpacking The Difference Between CSR And Corporate Philanthropy

Although no single commonly accepted definition had been ascribed to Corporate Social Responsibility (CSR), which had evolved since 1970s, but one thing that is basically agreed upon is that there had been economic, ethical, legal and philanthropic aspect to the subject.

Using the classification of renowned Professor of Marketing, Geoffrey P. Lantos presented in his paper, The Ethicality of Altruistic Corporate Social Responsibility. Based on Archie Carroll’s four-part definition of CSR, Lantos offers three different types of CSR which are ethical, altruistic and strategic.

Ethical CSR is the morally mandatory fulfillment of a firm’s economic responsibilities, legal responsibilities, and ethical responsibilities. Altruistic CSR is fulfillment of an organization’s philanthropic responsibilities, going beyond preventing possible harms (ethical CSR) to helping alleviate public welfare deficiencies, regardless of whether or not this will benefit the business itself. Strategic CSR is the caring corporate community service activities that accomplish strategic business goals.

Lantos is not the only one to make such a classification of CSR. Prof. Michael Porter provides a similar mapping, although unlike Lantos he sees the different classifications more as phases of development rather than just different types of CSR.  Porter explains that business’ first response to societal issues was philanthropy (altruistic CSR in Lantos’ terms).

Porter explains, companies learned a lot from the process (moving from philanthropy to CSR) and have done a lot of good, but ultimately, there’s a next phase – creating shared value.

The fact that philanthropy is so often mistaken for CSR is probably because it was the most common strategy businesses utilized to do good for many years.

Corporate Philanthropy
Philanthropy is a concept coined by the Roman Emperor Flavius ​​Claudius Julianus, in the late third century. Etymologically, philanthropy means, “Love to man or mankind” we can therefore conclude that although its meaning taken literally could mean charity, the scopes are different.  Charity is a term of religious connotation and seeks to solve a problem immediately while business or corporate philanthropy is used in a humanist non-religious context and furthermore seeks lasting change through social and/or environmental programmes carried out by the company.

Corporate philanthropy is a company’s way of giving back to its community -- local, regional, national or international -- through financial donations and non-cash contributions such as time, expertise and tangible goods like computers, medicine, food and textbooks.

Corporate Social Responsibility
Philanthropy is a slice of the bigger corporate social responsibility pie. Corporate social responsibility not only deals with corporate philanthropy but also other issues that affect the environment, consumers, human rights, supply-chain sustainability and transparency for the greater good of the world at large. Businesses that integrate social responsibility into their missions acknowledge that their business processes have an impact beyond the company. Therefore, they address issues like philanthropy, environmental-impact assessments and providing good working conditions etc.

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