Corporate philanthropy is a multibillion-dollar global enterprise that is particularly important in this moment. As governments cut development aid and social service spending, corporations find themselves in the philanthropic spotlight. Will they step up as governments step back? 

Decisions on corporate giving take into account a number of commercial realities not faced by private foundations or wealthy individuals. First and foremost, corporations provide goods or services and earn a profit for shareholders. So decisions to allocate capital for corporate giving are subject to internal and external considerations, including desired profit margins, investment priorities, brand risk management, stakeholder scrutiny (including from boards of directors), and regulatory requirements. 

Done well, corporate giving isn’t just an exercise in altruism. It can enhance a corporation’s competitive advantage and burnish its public image while shaping societal and environmental outcomes. Drawing from global benchmarking and numerous interviews, a new Bridgespan Group report identified three widely used approaches that frame how corporations give: 

1. Giving to a Community or Region 

It’s easy to understand the appeal of place-based giving. It addresses social or environmental needs in specific geographic areas, usually communities or locations adjacent to company operations where staff and their families live. Place-based giving done well can produce long-term positive results. From a pragmatic business perspective, such giving can strengthen a corporation’s standing with its employees and the community, increase customer loyalty, and generate positive media attention. Corporations draw on knowledge of local communities and often work with community groups to tailor initiatives to address specific needs. 

Tata Steel Foundation, for example, led the development of a public-private partnership initiated in 2009 to address the high maternal and infant mortality rates in rural villages of Jharkhand state, a mineral-rich but economically distressed area of India that is home to Tata Steel factories. 

The program built the skills of government-accredited voluntary health workers to implement home-based maternal and neonatal care, alongside a broader lifecycle approach to address other root issues of infant and child mortality, such as teen pregnancy. By 2015, the program had achieved a 32.7 percent reduction in neonatal (first-month) mortality, 26.5 percent reduction in infant mortality, and 50 percent increase in hospital births.

2. Taking Advantage of Distinct Corporate Capabilities

Another frequently used approach to corporate giving involves the thoughtful application of core business capabilities – such as supply chains, manufacturing processes, talent, or technology – for social or environmental benefit. Done well, applying a company’s core assets to social purpose benefits both society and the company. “Play to [your] strengths. Play to the business or areas of expertise that you have. Why stray away and do something else, when you will not have that multiplier effect?” says Karen Ngui, managing director and head of DBS Foundation, the corporate foundation of Singapore’s DBS Bank.

Mastercard applies its digital payment and data expertise towards enhancing digital inclusion and economic empowerment. To facilitate that goal, it created the Center for Inclusive Growth a decade ago to “ensure sustainable, equitable benefits of a growing economy extend to everyone, everywhere.”

Amongst its many activities, the center administers Mastercard’s Impact Fund, which has committed more than $432 million in grants to 186 organisations around the globe. The Impact Fund has provided more than 40 million small businesses – 60 percent of which are women-owned – with financial services, tools, and other resources. “The Center for Inclusive Growth is embedded within the (Mastercard) corporate for a reason,” says Subhashini Chandran, senior vice president for social impact. “It ensures commitment is not separate from the business. It’s not a nice to have, it’s our way of being.”

3. Building Giving Around the Core Business

Corporations that embrace this approach deliver high-value products or services to a population in need in a manner that complements and reinforces its core business. They may do so by designing their giving around a target customer segment, around an issue their business seeks to address, or around their corporate mission. Done well, this approach provides historically marginalised communities access to products and services they would otherwise not receive. Through strengthening access to these communities, corporations may also be seeding future market opportunities. What may strike some as overreach, others view as a pragmatic way to lead with purpose. 

Taikang Insurance Group, one of China’s largest insurance providers, has made affordable insurance for the elderly a business priority. Complementing the core business, Taikang Yicai Foundation, the corporate foundation, has supported 369 eldercare organisations with thousands of pieces of donated equipment and funded training for 82,000 eldercare staff. The foundation’s Public Health and Epidemic Control Fund strengthens public health systems and funds research to meet the challenge of new viral infectious diseases. In conjunction with the government’s push for rural revitalization, the foundation also has funded efforts to improve rural elderly care, rural education facilities, rural health, and rural construction.

Corporate Giving Can Do More 

The days of “sleepy” corporate giving are over. More and more business leaders have embraced the notion that their companies should work to solve social and environmental problems alongside making a profit for shareholders. Generous intent can lead to meaningful results for individuals and the communities where they live while enhancing a business’s long-term viability.

Read the full report about corporate giving by at The Bridgespan Group.