The distinction between personal and corporate philanthropy has not been clearly understood.

The Wikipedia defines philanthropy as the “love of humanity”. It is, then natural that, as human beings, the act of philanthropy forms an integral part of the DNA of the human race.

In India, through the ages, philanthropy has been viewed as the duty of monarchy. Even in the great Arthashastra, there is a mention of how it is considered to be good for the king and the kingdom. What it did not clarify was that in the days of autocracy, the charities of the kings were often construed as the contribution of the empire.

This led to a slightly blurred vision in modern India, where the act of philanthropy is viewed both through personal and organisational lens.

However, in developed economies, the divide is clear and well-established. Personal acts of philanthropy are appreciated in a personal capacity, while organisational acts are treated separately.

In the light of the recently introduced Companies Bill with its guidelines on mandatory CSR spends by large corporates, it is imperative to examine the role and context of philanthropy, both in an individual and organisational capacity.

CORPORATE CONTEXT

Currently, the jury is still out on whether philanthropy should be done by corporates or individuals from their own private wealth. In a typical corporate structure, the model that is largely followed is that of input, process and output.

In the input variable, we have resources which are put into the system from the market, including, but not restricted to, human resources. So one point of view is that as corporates consume resources of various kinds, it is their responsibility to contribute back to the system or the environment from which they consume.

Ideally, this should be also aligned to the business conducted by the company, and therefore indirectly or directly contribute to enhancing value to the company’s name and brand.

BRAND EQUITY

Supporting social causes is not only a legal mandate, but an intrinsic responsibility of any progressive corporate. After all, the profits derived by a company are from the society that we live in, and hence giving back to the society through CSR is simply enhancing engagement with society.

Thus, CSR initiatives are not charity or ‘philanthropy’ in that sense. Consequently, there is a definite value-add to the image of the company as a socially aware entity and responsible member of the society at large. For example, under CSR, DLF Foundation has undertaken the Cluster Village Development Programme in 10 villages of Gurgaon, in sync with the priority areas identified in the 12th Plan.

This initiative is aimed at empowering communities, which are directly or indirectly impacted by the real-estate development activity undertaken by DLF through programmes. It uplifts the lives and living conditions of migrant workers and their families through well-crafted interventions in the areas of health, education, sanitation and skill development.

Amul’s continued endeavour to improve the socio-economic conditions of the rural people is another prime example of the successes of the CSR model. Its special project on “Improving socio-economic conditions of BPL Families of Kheda District through Animal Husbandry and Dairying” is a case in point.

Programmes and initiatives like these no doubt make a huge difference to the lives and livelihoods of people who are part of the organisation’s business value chain; they also add a silver lining to the business, albeit indirectly.

There is a need to recognise that the function of a corporate house is to create value and generate profits for all stakeholders.

Resources spent on ‘good causes’ by corporates, which have no bearing or relation to its business, but are deployed under the guise of meeting CSR obligations, end up as a disservice to its primary stakeholders.

There are, of course, other benefits that accrue to corporates from their CSR or Cause Related Marketing programmes. It helps the organisation create a favourable employer branding, which is essential from a talent attraction and retention perspective. Unlike in the past, where an organisation was only evaluated on its product, today organisations are evaluated on their brand image, which is enhanced by acts of CSR.

A case in point is Google’s recent initiative to create Internet hotspots in downtown Manhattan for free as a public service.

This single act is certain to increase its brand pull; prospective employees are likely to consider this act as a factor while deciding on seeking employment with the organisation.

INDIVIDUALLY DRIVEN

Philanthropy, on the other hand, is the selfless contribution of wealth to the underprivileged. Some of the single largest individual philanthropists across the globe include Bill Gates, Warren Buffet, Azim Premji and N. R. Narayana Murthy.

These individuals have decided to give away their wealth for a cause which they believe to be higher than their personal needs. Very often though, the cases of personal philanthropy are often related to the organisational greatness, as the leaders are also the face of the organisation.

Infosys, Berkshire Capital, Microsoft and Wipro are also in the news for the actions of their leaders. This however should be viewed as an inevitable by-product and not the main motivation for philanthropy by individuals.

The choice of individual philanthropy rests with the individual in all circumstances. Different people have different reasons which drive their philanthropic behaviour —but the end benefit is always to society at large.

Whatever the reasons, the fact remains that in India philanthropy is closely intertwined with the vision, mission and philosophies of leaders and founders of large organisations. Irrespective of personal or organisational acts, they serve the society in good stead.

(The author is CEO, DLF Foundation.)

(This article was published on March 8, 2013)
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