2 1. Identify and discuss two basic ways of business giving. 2. Discuss reasons for community involvement, various types of community projects, and management of community stakeholders. 3. Explain the pros and cons of corporate philanthropy, provide a brief history of corporate philanthropy, and explain why and to whom companies give. 4. Differentiate between strategic philanthropy, cause- related marketing, and cause branding. Chapter 16 Learning Outcomes
3 5. Characterize the nature of, magnitude of, reasons for, and impacts of outsourcing and business or plant closings. 6. Address steps that a business or plant might take before a decision to close is made. 7. Identify strategies that a business or plant might employ after a decision to close has been made. Chapter 16 Learning Outcomes
4 Chapter 15 Outline Community Involvement Corporate Philanthropy or Business Giving The Loss of Jobs Summary Key Terms Discussion Questions
5 Introduction to Chapter 15 This chapter focuses on community involvement and corporate philanthropy as community stakeholder issues. Additionally, the topic of outsourcing and business or plant closings as community stakeholder concerns are explored.
6 A Company’s Positive Impact Community Involvement Corporate Philanthropy
7 Standards of Excellence in Corporate Community Involvement 1. Leadership 2. Issues Management 3. Relationship Building 4. Strategy 5. Accountability 6. Infrastructure 7. Measurement Figure 16-1
8 Benefits of Employee Volunteer Programs Improving employee skills and training Encouraging employee teamwork Developing leadership skills Developing the local labor pool Recruiting and retaining employees Improving corporate reputation
9 Corporate Community Involvement Figure 16-2
10 1. Know the community 2. Know the company’s resources 3. Select projects 4. Monitor projects Developing a Community Action Plan
11 Philanthropy A desire to help mankind asindicated by acts of charity;love of mankind.
12 Categories of Corporate Contributions Programs 1. The Nondonor 2. The “What’s In It for Us” Donor 3. The “Company President Believes in Art Support” Donor 4. The “We Are a Good Citizen” Donor 5. The “We Care” Donor Figure 16-3
13 To Whom Do Companies Give? 1. Health and human services 2. Education 3. Civic and community activities 4. Culture and the arts Major Categories of Recipients
14 Managing Corporate Philanthropy 1. Base giving on business resources and capabilities to enhance philanthropic outcomes 2. Focus on philanthropy that will enhance corporate profitability and also make a difference in the community
15 Factors Influencing Corporate Giving Priorities Aligning closely with business needs Limits on budgetary resources Directions from the CEO and / or the Board Strengthening the brand Costs of responding to natural disasters Being more responsive to stakeholders Changes in the workforce Other Employee needs / requests Community needs Global giving Figure 16-4
16 Community Partnerships Strategic Philanthropy An approach by which corporategiving and philanthropic endeavorsare designed to fit with the firm’smission, goals, or objectives.
17 Strategic Philanthropy 1. Make as direct a contribution as possible to the financial goals of the firm. 2. Bring contribution programs into sharper alignment with business endeavors. 3. Ensure that philanthropy is well planned and managed.
18 Implementation of Strategic Philanthropy 1. Integrate philanthropy into strategic goals and company mission. 2. Connect philanthropy with other community involvement programs. 3. Budget appropriately for philanthropy. 4. Ensure effective program infrastructure. 5. Formalize policies and guidelines for funding. 6. Involve employees in philanthropy-related activities. 7. Incorporate stakeholder communication. 8. Develop long-term business / nonprofit partnerships. Figure 16-5
19 Cause-Related Marketing The direct link of a business’sproduct or service to a specifiedcharity.“Quid pro quo strategic philanthropy.” Businesses enhance their public image and increase sales Nonprofit organizations get cash as well as visibility
20 Cause-Related Marketing Cause Branding A longer term commitment thancause-related marketing.Related more directly to the firm’s lineof business and the target audience.
21 The Loss of Jobs Outsourcing The relocation of business processesto a different company.
22 Offshore Outsourcing Practices 1. Go offshore for the right reasons 2. Choose your model carefully 3. Get your people on board 4. Be prepared to invest time and effort 5. Treat your partners as equals
23 Business and Plant Closings Before Deciding to Close Diversification New ownership New owner Employee ownership
24 Business and Plant Closings After Deciding to Close Conduct a community impact analysis Provide advance notice Provide transfer, relocation, and outplacement benefits Phase out the business gradually Help attract replacement industry
25 What groups will be affected? How will they be affected? What is the timing of initial and later effects? What is magnitude of the effect? What is the duration of the impact? To what extent will the impact be diffused in the community? Community Impact Business and Plant Closings
26 Worker Adjustment and Retraining Notification Act Business and Plant Closings Requires firms with 100 or more workers to provide 60 days advance notice before shutting down or conducting layoffs
27 Business and Plant Closings Directional support Tactical support Informational support Emotional support The Needs of Survivors
28 Community involvement Community action program Philanthropy Third sector Strategic philanthropy Cause-related marketing Cause branding Outsourcing Offshore outsourcing Offshoring Employee owned Worker Adjustment and Retraining Notification Act (WARN) Key Terms