welcome to class of corporate philanthropy in emerging markets dr. satyendra singh university of...
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Welcome to class of
Corporate Philanthropyin Emerging Markets
Dr. Satyendra SinghUniversity of Winnipeg
Canadawww.uwinnipeg.ca/~ssingh5
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Corporate Social Responsibilities:in Developing Countries/Emerging Markets
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Level of Philanthropy
• Philanthropy– Do good by giving…
• Individual philanthropy– Need to save (EM), lack of trust, unstable government
• Corporate philanthropy– …with the aim to develop
• Business opportunities, Public relations, Employee morale, Brand image, Cause-related marketing campaign
• Strategic philanthropy– …with the aim to combine social and economic benefits
to develop distinct competitiveness
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Philanthropy: the Context• Philanthropy is in decline• Difficult to justify charitable (social) expenditure in
terms of bottom-line (economic) benefits• Corporate philanthropy is unnecessary
– No-win situation– Trade-off between the goals– Let employees donate themselves tax rebate– Individual donor or corporate same benefit
• We need strategic philanthropy– Win-win situation– Context-focus giving Where to focus; how to contribute
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Top 5 Issues for Which Businesses Give
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Types of Corporate Philanthropy
External vs. Internal
Use own productsToo littleNot significant
Grant25% cash75% R&DConsultancy
Unrelated↑ PR, ↑ demandLacks credibility
Worst of allConfusedBoard member wants itEg., Sponsor an event
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Strategic Philanthropy: Social and Economic
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The Logic of Giving
Without Giving
$30m Profit
-$9m 30% tax
$21m Net
With Giving
$30m Profit
-$2m Gave
$28m Profit After Giving
$5.6m (20% tax, ie ↓ tax bracket)
$22.4m Net
Even after giving $2m, firm saved 1.4m extra ↑ dividends, EPS
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Where to Focus
• Where social and economic benefitsnot in conflict• Contribute to society
– E.g. trained educated and healthy labour, natural resources to produce high quality goods and services, preserving environment, waste management, pollution reduction, boosting social and economic conditions in EM
• While being different and ↑ business performance– E.g. Computer company trains students, population– Travel companies train restaurants, hotel, booking– Tour operator sponsors a heritage site, and thus has
preferential access to the site for its tourists
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How to Contribute to Value Creation…
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How to Contribute to Value Creation
• Selecting the best grantees– Urgent/overlooked problems, school dropout rates– Use the grantee’s performance to measure our performance
• Signalling other funders– Train other funders, offer matching grants…
• Improving the performance of grant recipients– Capital provider to engaged partner, learn from each other, ↑
effectiveness of organisations as well
• Advancing knowledge– Set a new research agenda for public or govt policies– New wheat, rice variety, GMO
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The Chocolate company