<< https://smallbusiness.chron.

com/difference-between-corporate-philanthropy-corporate-social-
responsibility-65129.html>>

The Difference Between Corporate Philanthropy & Corporate Social Responsibility

Corporate philanthropy and corporate social responsibility are similar concepts that often
overlap in practice. In fact, the relationship between CSR and philanthropy are often barely
distinguishable from each other, as the terms are sometimes used interchangeably. Often,
philanthropy is integrated into a bigger picture corporate social pesponsibility plan. Both are positive
concepts designed to deliver corporate resources to the community the corporation serves, and the
giving may also be aimed toward specific causes. The divide between philanthropy and corporate
social responsibility is pretty clear when you take a hard look at the context for each, and when both
are practiced simultaneously by corporations. The difference between philanthropy and charity is less
clear, and the terms often have greater overlap.

What Is Corporate Philanthropy?

Philanthropy is most often seen in the form of financial contributions, but it can also include
time and resources. The concept behind philanthropy involves making an effort to drive social
change. It’s not only the charitable donations that can go toward any number of direct-giving
scenarios, such as disaster relief or feeding the homeless. Philanthropy involves finding a long-term
solution to homelessness, rather than delivering temporary relief. On the corporate level, philanthropy
is practiced in many different ways. Many corporations simply donate money to causes that are
intended to bring about social change. They may or may not place their brand on the cause and take
credit for the resources offered. This kind of giving often happens without any direct involvement
outside of the funds offered.
Corporations may also be directly involved in philanthropy by partnering closely with a cause,
or, in some cases, by bringing the efforts in-house. Some corporations have entire departments
dedicated to managing their charitable gifts and philanthropic programs. Although philanthropy and
charity are separated by definition, the two are commonly lumped into a single category within the
corporate atmosphere. Philanthropy and charity are both programs of giving that are not necessarily
limited to the communities where they operate. Most often, they simply select causes and then
contribute on a financial level.

What Is Corporate Social Responsibility?

Corporate social responsibility directly involves the corporation’s business model and its
business practices. It goes a step further than philanthropy by directly involving the corporation in the
causes and in the community. For example, a mining company should implement cleanup programs
to mitigate pollution from the operation. Leaving a polluting mine after the work is done is
irresponsible, and it has negative consequences for the community and for the health of the
community. Corporate social responsibility is not mandatory and is not always practiced, but it should
be a major aspect of any large-scale corporation, as some negative side effects may stem from the
business practices. Corporate Social Responsibility or CSR means that the corporation is working to
mitigate potentially negative effects on the community and also to solve for the effects it has socially,
environmentally and on general public health. So what is the difference between CSR and
philanthropy? Philanthropy is simply a way to reinvest wealth in a cause. It can happen at the
corporation’s leisure; it is purely optional. If the corporation does not participate in philanthropy, it will
likely not affect the way the corporation is viewed. Failing to implement CSR, however, will cast the
corporation in a negative light. The mining example is a common example, and numerous examples
exist in natural resource extraction in general because the business has heavy environmental
impacts. If the mining company removes all of the precious metals possible then abandons the mining
site that is leaching chemicals into local waterways, they are failing the community and foregoing their
Corporate Social Responsibility obligations. The same principles would apply to a coal company that
fails to deal with worker health issues, such as as black lung. Failing to address community health
and environmental effects directly means that the company is failing the community, rather than
serving the community.
A Corporate Social Responsibility program would hire mitigation teams to seal and cap mining
sites to stop harmful chemical leaching, or they would set up health services in the community to treat
black lung, as well as other respiratory issues developed while working underground. The CSR
programs are hands-on and ultimately demonstrate that the corporation cares about the issues
created as a result of its business model. Corporate Social Responsibility in practice often looks much
different than it should however. Many corporations implement feel good type programs to place their
brand in a favorable light but the programs offer little in the way of resources.

What Is the Difference Between Philanthropy and Charity?

Philanthropy and charity are easy to confuse, and the lines are often blurred. Charitable giving
is a direct donation from the corporation to the charity. There are no strings attached and the charity
can be any nonprofit cause. Philanthropy involves a cause that is attempting to solve a problem. A
charitable donation would be something such as money given toward delivering HIV medication to
infected individuals who cannot afford treatments. In the case of philanthropy, it would involve
seeking a cure for HIV. In both cases, the most likely course of action would involve a direct financial
contribution to the nonprofit. A single nonprofit can also be involved with charitable giving and with
philanthropy. For example, a single organization can deliver HIV treatments while working to find a
cure. The two are not mutually exclusive, which makes the donation from a corporation difficult to
define. In this case, the best way for the corporation to make the distinction is by specifying what the
donation is supposed to represent. With a large donation, they can even request spending reports to
ensure that the money and resources are being used as intended. Ultimately, the company must
distinguish between the types of contributions they are making. In many cases, the companies will
simply choose not to define between philanthropy and charitable giving, because it has no effect on
how they file the contributions during tax season. Unless they are promoting the fact that they
contribute to a specific cause, they are unlikely to receive scrutiny. Many corporations will leverage
their donations into PR and marketing campaigns, however, and the distinction becomes more
important at this point. There is no legal repercussion for confusing charitable giving and philanthropy,
because they are all directed at nonprofits, but any company making a sincere effort to donate, will
pay close attention to the causes they represent. If they are really donating with specific intent, they
will distinguish between the types of donations that are distributed, and they may create media
around a specific cause so that they can raise awareness and increase the nonprofit’s ability to raise
funds and continue working.
<<https://thecsrjournal.in/difference-between-csr-and-philanthropy/>>

Difference Between CSR And Philanthropy

Majority of the times when Corporate Social Responsibility is mentioned, it is mainly in

reference to the philanthropic initiatives of a company. CSR and Philanthropy has been always
misconstrued as synonymous. However, there is a significant difference between the two.
Philanthropy is defined as promoting and attempting to bring about social change by majorly
making generous financial contributions. A philanthropist is someone who decides to invest in a social
sector a portion of their wealth, time or knowledge for a cause that they believe in.
For a cause, the involvement of Philanthropists can vary. However, majority of times, the
philanthropists are happy to support a cause from distance. They would likely follow up and would
seek to know the impact created by their contribution. However, they would not want to get involved
beyond that.
CSR on the contrary goes beyond that. CSR is about making the core business functions of a
company more sustainable. A CSR program does not only benefit the community, but also the
business in form of improved morale, increased staff retention, status as an employer of choice,
attracting new business, and differentiation from competitors. This is because a CSR program
requires involvement from all the stakeholders including employees as well as the community.
Philanthropic work done by a company does not require to change its business practice.
However, a CSR program might need to change certain important business practices in order to
make it into a responsible business.
Publicising the philanthropic work done by a company has a chance of backfiring. Especially
since the execution of CSR legislation, the philanthropic work done by a company can be viewed as
buying their way out from fulfilling a social responsibility. On the other hand, publicising CSR efforts
can make a business look socially responsible. It can build a goodwill among its stakeholders which
can build loyal customers and positive brand recognition.
Neither of the two are wrong and one is not better than the other, but if a business engages in
a more engaged form of giving with clear objectives in terms of KPIs and ROI from the program, all of
those involved benefits.