Organisation Philanthropy, Contradictory or profitable?


In the corporate metropolis which we live in, opinions vary regarding business philanthropy across the globe. Ideas expressed within the world of business vary from positive influence to negative directed toward whether they are worth the corporation’s time and efforts. Long-term American economist Milton Friedman, expressed that corporate philanthropic activity is in fact contradictory, and can have a negative effect on the efficiency of the business by siphoning earnings into social programs that have little to do with the company. While this view may be controversial, it has to be understood that Milton is an economist and therefore his business vision is to reinvest money in a way that will profit directly.

This argument is often opposed by the popular view that ‘you can’t do business in a society that’s burning’ – I came across this quote while researching and thought it was a great way to describe many corporations ideology behind being philanthropic. The quote comes from the founder of an un-named company who focus on data collection, a much smaller company than the likes of blue chip multinationals. Simply, from my own perception, it was based around the concept that business and good will go hand in hand. The Data supports that you cannot receive without giving in today’s society. This is inevitably a view that would contrast from an economist’s view; personal professional experience will always vary both significantly and insignificantly from data. My view is that extremes should not be exercised and that elements of data and also profitability at all costs, should be implemented into a philanthropic communications plan.

In a nutshell, following my research – I believe that success in business comes from balance and the ability to be ambitious, following key trends without the derivative of becoming unbalanced.

L’Oreal are a company who have created a very ambitious and long term commitment to their own philanthropic ventures. In 2007, L’Oreal endowed it’s corporate foundation and focused on strengthening it’s philanthropic initiatives on beauty, convinced that it can drastically improve the lives of vulnerable individuals. They did this by actively restoring the public’s self-confidence and rebuilding social ties. Examples of their brands work in philanthropy are distinctive across different continents – for example, in Africa and Asia, the foundation is funding reconstructive surgery, while in France it is developing an aesthetic therapy program to help fragilized adults, teenagers and children to feel good about their appearance.

In respect to L’Oreal, I believe that this example of corporate philanthropy is very efficient. However my reasoning is logical; L’Oreal adopted a philanthropic venture that is aligned with their mission. Arguably this specific area of ‘beauty’ can be so controversial, that when carried out well is easily aligned. I believe that their mission is very clear –  and due to the mission being created primarily around ‘ethical beauty’, the link between the two is much easier as ethical behaviour and corporate philanthropy compliment each other, especially in the 21st century.

Is this example of philanthropy benefiting profitably? Yes and No. staying diplomatic? Of-course. While L’Oreal are a global corporation, they are able to lose money by giving a little extra to a community. although this goes against Milton Friedman’s concept of efficient business, we do operate in the 21st century and with L’Oreal selling 130 products every second globally, it gives them leverage to make a small loss to benefit society. On the flip side, I do believe that with it being their mission and philanthropy being so well well aligned with great exposure, it does have an effect on how the consumers view the L’Oreal brand, thus leading nicely to profitability through an enhanced and more exposed brand name.

To conclude, in my opinion, the success and worth of a philanthropic venture boils down to the industry that the company is in. In my opinion, it is easy to have a successful community outlook if you have an appropriate mission and you operate in an appropriate industry such as beauty or healthy food. However, industries such as fast food and banking are examples of business ventures where the sole purpose is to make profit and not necessarily help the customer (Internally motivated). While a larger brand such as ‘McDonalds’ CAN run community outreaches, this can sometimes work nicely when done well, simply because they are very influential. However, customers know that McDonalds sell high fat food, and they are for maximum profit only. Similar to the banking industry, they professionally manipulate customers into investing money and investors by exaggerating quarterly growth statistics for their own worth – therefore in most cases should not run philanthropic events as it does nothing but exercise Milton Friedman’s view of being extremely contradictory while diminishing trust with investors and consumers.


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