Management homework help

The Difference Between Corporate Philanthropy & Corporate Social Responsibility

Need Help Writing an Essay?

Tell us about your assignment and we will find the best writer for your paper

Write My Essay For Me

by Zach Lazzari; Updated October 22, 2018

Corporate philanthropy and corporate social responsibility are similar concepts that often overlap in practice. In fact, the relationship between CSR and philanthropy are often barely distinguishable from each other, as the terms are sometimes used interchangeably. Often, philanthropy is integrated into a bigger picture corporate social pesponsibility plan. Both are positive concepts designed to deliver corporate resources to the community the corporation serves, and the giving may also be aimed toward specific causes. The divide between philanthropy and corporate social responsibility is pretty clear when you take a hard look at the context for each, and when both are practiced simultaneously by corporations. The difference between philanthropy and charity is less clear, and the terms often have greater overlap.

What Is Corporate Philanthropy?

Philanthropy is most often seen in the form of financial contributions, but it can also include time and resources. The concept behind philanthropy involves making an effort to drive social change. It’s not only the charitable donations that can go toward any number of direct-giving scenarios, such as disaster relief or feeding the homeless. Philanthropy involves finding a long-term solution to homelessness, rather than delivering temporary relief. On the corporate level, philanthropy is practiced in many different ways. Many corporations simply donate money to causes that are intended to bring about social change. They may or may not place their brand on the cause and take credit for the resources offered. This kind of giving often happens without any direct involvement outside of the funds offered.

Corporations may also be directly involved in philanthropy by partnering closely with a cause, or, in some cases, by bringing the efforts in-house. Some corporations have entire departments dedicated to managing their charitable gifts and philanthropic programs. Although philanthropy and charity are separated by definition, the two are commonly lumped into a single category within the corporate atmosphere. Philanthropy and charity are both programs of giving that are not necessarily limited to the communities where they operate. Most often, they simply select causes and then contribute on a financial level.

What Is Corporate Social Responsibility?

Corporate social responsibility directly involves the corporation’s business model and its business practices. It goes a step further than philanthropy by directly involving the corporation in the causes and in the community. For example, a mining company should implement cleanup programs to mitigate pollution from the operation. Leaving a polluting mine after the work is done is irresponsible, and it has negative consequences for the community and for the health of the community. Corporate social responsibility is not mandatory and is not always practiced, but it should be a major aspect of any large-scale corporation, as some negative side effects may stem from the business practices. Corporate Social Responsibility or CSR means that the corporation is working to mitigate potentially negative effects on the community and also to solve for the effects it has socially, environmentally and on general public health. So what is the difference between CSR and philanthropy? Philanthropy is simply a way to reinvest wealth in a cause. It can happen at the corporation’s leisure; it is purely optional. If the corporation does not participate in philanthropy, it will likely not affect the way the corporation is viewed. Failing to implement CSR, however, will cast the corporation in a negative light. The mining example is a common example, and numerous examples exist in natural resource extraction in general because the business has heavy environmental impacts. If the mining company removes all of the precious metals possible then abandons the mining site that is leaching chemicals into local waterways, they are failing the community and foregoing their Corporate Social Responsibility obligations. The same principles would apply to a coal company that fails to deal with worker health issues, such as as black lung. Failing to address community health and environmental effects directly means that the company is failing the community, rather than serving the community.

A Corporate Social Responsibility program would hire mitigation teams to seal and cap mining sites to stop harmful chemical leaching, or they would set up health services in the community to treat black lung, as well as other respiratory issues developed while working underground. The CSR programs are hands-on and ultimately demonstrate that the corporation cares about the issues created as a result of its business model. Corporate Social Responsibility in practice often looks much different than it should however. Many corporations implement feel good type programs to place their brand in a favorable light but the programs offer little in the way of resources.

What Are the Types of Corporate Social Responsibilities?

CSR is a complex concept, and it happens at a number of different levels. In many cases, the consequences of doing business are unintentional, and are dealt with after the fact. These would be the mining cleanup and community health programs. Corporate responsibility however involves the processes and technologies used by the company directly. One form of CSR is providing the proper equipment and resources to ensure their work has the least impact possible. For example, the coal mine might save funds upfront by providing subpar respirators to underground workers or by foregoing respirators all together but the negligence has long lasting implications. CSR involves avoiding negligence as a means of maximizing the bottom line profits and representing the best interest of the workers, communities and environment upfront. Another form of responsibility comes in the form of improving processes and technology to lessen the impact. The coal mine in the latter example could finance the development of a better respirator or they could explore new technology to make a more efficient mine that has less direct impact on worker health. Unlike Philanthropy, in which the corporation is simply donating money, CSR involves a hands-on approach to solving social and environmental in which the corporation is involved. The concept is transformative, and has the ability to generate positive effects through entire industries.

CSR does happen on a number of different levels. The local, grassroots level is common but national and international programs are also applicable. It all depends on how the company operates and the footprint they have. In the case of mining, it’s often very localized around each individual mining site. Other multinational corporations have a much wider footprint that affects multiple countries on a large scale. In these instances, their corporate responsibility happens on a much larger scale and requires a significant platform to communicate and effect any viable change.

CSR is an internal matter for many corporations as well. A clothing business can improve factory conditions and increase employee pay and benefits as a form of CSR. Improved working conditions and raising sub-par pay is a major issue, especially in a global economy that sources cheap labor from unregulated parts of the globe. Any internal process that results in negative impacts to the environment or community health must be addressed and improved if the company wants to make any claim at CSR. Adidas for example, has implemented a recycled polyester program to reduce their material footprint and they are working with sustainable cotton farms to ethical source raw materials. By implementing these programs, they are directly addressing the issue of emissions generated by processing polyester and the environmental impacts of maximum yield cotton farms. These are CSR programs that have measurable impacts and the ability to actually calculate reductions in emissions and environmental harm while working to improve upon those goals each year. Feel good style CSR programs rarely have the ability to measure impacts in a real and meaningful way.

How Does CSR Differ, Based on Industry?

Every industry has different issues that are endemic to the common processes and business models. In the previous examples, the mining industry was used, but there are no shortage of other industries with issues that require CSR. The pharmaceutical industry for example has a corporate responsibility to address issues pertaining to addiction and other side effects that arise as a result of their treatments. Corporate Social Responsibility addresses impacts made by the corporation. If a large conglomerate retail store consolidates multiple departments into one store and enters a community, they may put small businesses out of business. The large model can price lower and the small local business can’t compete. In the retail model, the CSR program would address these issues although in retail, CSR does not always move in this direction.

The best method of developing a CSR program is through observation and identification of the key issues created by the business model. At this point, the corporation is placed in a difficult position. In order to fulfill any level of CSR, they must first acknowledge that the issues exist while accepting some responsibility. The acknowledgement phase can deter many corporations because they do want any legal liability for issues caused by their business. Acknowledgement is however an important step in giving back to the community while mitigating long term damage inflicted by the company.

What Is the Difference Between Philanthropy and Charity?

Philanthropy and charity are easy to confuse, and the lines are often blurred. Charitable giving is a direct donation from the corporation to the charity. There are no strings attached and the charity can be any nonprofit cause. Philanthropy involves a cause that is attempting to solve a problem. A charitable donation would be something such as money given toward delivering HIV medication to infected individuals who cannot afford treatments. In the case of philanthropy, it would involve seeking a cure for HIV. In both cases, the most likely course of action would involve a direct financial contribution to the nonprofit. A single nonprofit can also be involved with charitable giving and with philanthropy. For example, a single organization can deliver HIV treatments while working to find a cure. The two are not mutually exclusive, which makes the donation from a corporation difficult to define. In this case, the best way for the corporation to make the distinction is by specifying what the donation is supposed to represent. With a large donation, they can even request spending reports to ensure that the money and resources are being used as intended. Ultimately, the company must distinguish between the types of contributions they are making. In many cases, the companies will simply choose not to define between philanthropy and charitable giving, because it has no effect on how they file the contributions during tax season. Unless they are promoting the fact that they contribute to a specific cause, they are unlikely to receive scrutiny. Many corporations will leverage their donations into PR and marketing campaigns, however, and the distinction becomes more important at this point. There is no legal repercussion for confusing charitable giving and philanthropy, because they are all directed at nonprofits, but any company making a sincere effort to donate, will pay close attention to the causes they represent. If they are really donating with specific intent, they will distinguish between the types of donations that are distributed, and they may create media around a specific cause so that they can raise awareness and increase the nonprofit’s ability to raise funds and continue working.

References (3)

· Lincoln Martin: Philanthropy and CSR

· NCBI: The Roles of Corporate Philanthropy, Corporate Social Responsibility and Shared Values

· CEO Magazine: Deconstructing CSR

Resources (1)

· CECP: Giving in Numbers: 2012 Edition

About the Author

Zach Lazzari is a freelance writer with extensive experience in startups and digital advertising. He has a diverse background with a strong presence in the digital marketing world. Zach has developed and sold multiple successful web properties and manages marketing for multiple clients in the outdoor industry. He has published business content in Angling Trade Magazine and writes white papers and case studies for multiple corporate partners.

APA Citation

Lazzari, Z. (2018, October 22). The difference between corporate philanthropy & corporate social responsibility [digital article]. Small Business – Retrieved from

Let our team of professional writers take care of your essay for you! We provide quality and plagiarism free academic papers written from scratch. Sit back, relax, and leave the writing to us! Meet some of our best research paper writing experts. We obey strict privacy policies to secure every byte of information between you and us.