Deck 18: The Community and the Corporation

Question 1

In what ways do businesses benefit from locating in communities with vibrant arts organizations and a rich cultural life?

Answer 1

The given case discuss about various non profit art organization that are integral part of cultures of nations. Various forms of art such as film-making, art education dances etc. are playing important role in enriching quality of life of communities. There art forms also help in deepening people's understanding about each other and make significant contribution in driving local economies. Earlier various corporations used to provide financial support to various art forms, but, with the recession setting in 2008-09, the contributions reduced. This led to various art organizations to close down. However, in the changed scenario, corporate and nonprofit organizations adopted various practices to contribute to philanthropic causes and they find these contributions worth it.
Communities can be defined as a local group or area where an organization has an influence as well as community is impacted by the actions of an organization. Both businesses and communities are interdependent.
Businesses can have various benefits in locating in communities with vibrant arts organization and rich cultural life. These art organizations such as theaters, museums, orchestras and art educators help in enriching the quality of life in communities. These art organizations help businesses to understand culture and make employees aware about various cultures and traditions. It helps in promoting cultural sensitivity. The cultural institutions help in providing jobs and developing local economies. Business can retain talented employees who find cultural organizations attractive.
Understanding community needs and culture, an organization can build positive reputation and trust. Community involvement would help businesses to gain loyal employees, customers and gain competitive advantages over others.

Question 2

What evidence do you see in this case of the three kinds of corporate philanthropy discussed in this chapter: contributions of cash, in-kind products or services, and employee time?

Answer 2

Corporate giving has been limited to around 1 to 2 percent of pre-tax income. There are still few companies in the United States that have limited the annual giving to around 5 percent.
Corporate giving is conducted directly by most of the companies but many companies have established non-profit charitable foundations that carry out corporate charity on the behalf of the companies. Corporate charity is done in three ways. They are contribution in cash, in-kind products or services and employee time.
Contribution in cash shows the amount paid by a company to various charitable organizations. An organization that is not able contributes in terms of products or services or in case it cannot provide time to the charitable organizations, contributes in terms of cash.
Many real estate companies often make charitable contribution in terms of cash as these companies are not able to contribute in terms of product or services and also in terms of valuable time.
In kind products and services are generally carried out by the companies that have the ability to provide product and services that can be of great usefulness for people at large. Pharmaceutical companies are generally involved in providing pharma products that can be of great benefit for people.
Pfizer is one of the pharmaceutical companies that have distributed medicines in large numbers as part of its corporate charity program. The company has primarily distributed medicines to some of the poorest countries in the world in order to protect people from malaria, HIV/AIDS and other fatal diseases.
Employee time or volunteerism involves people taking out time for underprivileged people as part of corporate charity. People visit various places and give training and impart educations that are for the welfare of the whole community.

Question 3

What are the benefits to the businesses discussed here of their contributions to arts organizations? Would you consider their contributions to represent strategic philanthropy, as defined in the chapter? Why or why not?

Answer 3

The given case describes about various non profit art organization that are integral part of cultures of nations. Various forms of art such as film-making, art education dances etc. are playing important role in enriching quality of life of communities. There art forms also help in deepening people's understanding about each other and make significant contribution in driving local economies. Earlier various corporations used to provide financial support to various art forms, but, with the recession setting in 2008-09, the contributions reduced. This led to various art organizations to close down. However, in the changed scenario, corporate and nonprofit organizations adopted various practices to contribute to philanthropic causes and they find these contributions worth it. The case also discuss about the benefits that corporate organizations have if they are working for benefit of the communities they are operating in.
Businesses have various benefits in contributing to arts organizations. In the given case, the benefits that the firms have by contributing to various arts organizations can be:
• Times Warner's sponsorship for an international dance festival benefited the firm by providing exposure to company's logo on a large scale. The firm's association with such cultural event would bring wider exposure and build goodwill in the minds of people from diverse backgrounds.
• Deutsche bank's private art collection helps the bank to attract customers and employees having interest in fine arts, which provides investments to the bank.
• Panasonic's donation of jumbo screen in New York's time square and Metropolitan's lobby can be seen as an opportunity to promote its brand and build business by supporting cultural event.
• Intel's partnership with PBS helped the firm to promote their image as an innovative firm that believes in out of box thinking.
Through these acts of contributions to various arts organizations, firms try to promote their products, build image in the minds of potential customers and markets and try to appeal to large customer base and explore new markets.
Strategic Philanthropy can be defined as corporate contributions that are linked directly or indirectly to organization's goals and objectives. Both society as well as the firm benefits from these contributions.
In the given case, the examples of various firms making philanthropic contributions represent strategic philanthropy. This can be said so because, through these contributions to arts organizations, both the society as well the firms are benefitted. Through these contributions firms can gain market exposure, clients, build image and market new products and on the other hand, people having interest in various arts and cultural activities can have access to various events and this would also help people to know others.

Question 4

If you were a manager charged with evaluating corporate contributions, what criteria would you use to decide whether or not to give to a particular arts organization?

Question 5

If you were a manager of an arts organization, are there any circumstances under which you would turn down, or restrict in some way, a corporate contribution? What would these circumstances be?