petitive Advantage of Corporate Philanthropy (Michael Porter) [HBR, 2002].pdf

petitive Advantage
of Corporate Philanthropy
by Michael E. Porter and Mark R. Kramer
Reprint r0212d
December 2002
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petitive
Advantage
of Corporate
Philanthropy
by Michael E. Porter and Mark R. Kramer
orporate philanthropy is in decline. Char- high-profile sponsorships. Although it still represents only
itable contributions by . companies fell % a small proportion of overall corporate charitable expen-
C in real dollars last year, and over the last 15 years, ditures, . corporate spending on cause-related mar-
corporate giving as a percentage of profits has dropped keting jumped from $125 million in 1990 to an estimated
by 50%. The reasons are not hard to understand. Ex- $828 million in 2002. Arts sponsorships are growing,
ecutives increasingly see them- too – they accounted for an addi-
selves in a no-win situation, caught tional $589 million in 2001. While
between critics demanding ever panies feel these campaigns do provide much-
higher levels of “corporate pelled to give to charity. needed support to worthy causes,
responsibility” and investors ap- they are intended as much to in-
plying relentless pressure to max- Few have figured out pany visibility and im-
imize short-term profits. Giving how to do it well. prove employee morale as to cre-
more does not satisfy the critics – ate social imp