Strategic Philanthropy for Organizations
First, we have to discuss philanthropy and its essence. Strategic philanthropy in an organization is a powerful way to assist the well-being of society by making themselves helpful in causes that are non-profitable to the institution. What the organization does is that they work for the betterment of the community. What the organization will benefit is that they have better employee attraction, brand exposure, and bottom line increase. Hence, the companies that are referred to as Fortune 500 are the institutions that operate and incorporate in the United States and agencies of the government by filing financial statements, both private and public traded. The companies are listed according to their overall revenue as per their 10-K filings in their respective fiscal year.
The Fortune 500 Company that I will talk about is Walmart. In 2003, Walmart was ranked 51st corporation due to its assets. But since it donations to the community, it was ranked the second biggest in the same year based on the business week as the best giver. In 2014, it was ranked as the largest company by having given out $170 million from $ 2002 was they donated $101 (Kampf, 2007). The advantage of its donation is that it lowers the criticism that they have been facing lately. Walmart has over 4900 stores, and the revenue that they get every year is over $288, it also has over 1.4 million workers. But there has been criticism over labor, women, economy, and more. They faced many court cases, for example, in 2000, it was sued over 4900 times, and the open cases were 9,400. In 2005 it decided to clear it to store with allegations to settle the federal case by paying $11 million. Currently, it is the leading defendant of sex- discrimination with a lawsuit that handles the cases that have represented women more than 1.5 million who were employees of the company since 1988. Walmart in 2004 launched an ad campaign of a multi-million dollar that was aimed at defending its policies of labor and extolling the impact on the community, for example, having a Walmart foundation. The strategic philanthropy that Walmart has shown that it is a supporter of community and family. It also gives more than 200,000separate donations each year, which ranges from $200 to $6,000,000, which averages to be $1000 grant. By donating directly to the families and community, it has earned people trust in doing more good than harm despite the criticism that it faces.
Walmart makes Commitment Corporation to charities such as the Salvation Army or the united way. In terms of religious institutions prohibit the funding of faith centers since it will benefit their members only but not the community. They only receive a grant from Walmart Foundation, which is directed to education by being a scholarship to religious schools.
In terms of profit for Walmart as from research done by NCRP, reveals that corporate philanthropy can be seen as a subsidize of the state advertising for a corporation to make profits. Hence, the Security exchange commission has to adopt a required disclosure for all organization’s philanthropic donations.
There is a concrete benefit in the corporation with its effectiveness. While Walmart makes a huge on charities, it will not lower the effectiveness of the organization fund for charities, but what it does is minimizes the advantages for the image of the corporation. By giving to many charities locally. Hence, Walmart can present itself to the people and the community as a supporter and citizen corporation (Hemphill, 2015). Walmart’s foundation work has been integral in giving an image that is positive about the company. Walmart gets a lot of tax breakdown for what it does to the community, as well as other organization philanthropy (Prieto, 2014), which brings the question of why they not that transparent. That means the company is making a lot of profit and giving out a little. It is a big contributor to the Republican Party due to its political action committee, and the Walton family gives mainly to the cause of conservative and politicians. That means that the profit that it makes is very big since not only do they fund independent foundations. The impact of money it gets from corporate philanthropy is huge.
Walmart harms its strategic philanthropy on the community; it harms the program of public warfare due to the low-quality jobs are put into place instead of quality jobs, and it has had local labor markets low wages. When Walmart is opened in an area, there are new jobs created, but the jobs in that area decrease since, it has been taken away by other retail workers. Teens also have jobs at Walmart, which brings negative since it gives the families an income which is supplemental for “discretionary purchases” that can encourage the economy.
Reference
Hemphill, T. A. (2005). Rejuvenating Wal-Mart’s reputation. Business Horizons, 48(1), 11-21.
Kampf, C. (2007). Corporate social responsibility: Walmart, Maersk, and the cultural bounds of representation in corporate web sites. Corporate Communications: An International Journal, 12(1), 41-57.
Prieto, L. C., Phipps, S. T., & Addae, I. Y. (2014). Is Wal-Mart a social enterprise? An exploration of the relationship between corporate reputation, corporate social responsibility & financial performance. Academy of Strategic Management Journal, 13(2), 51.