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The New Relationship Between Philanthropy and Business

Byline: Caroline Bermudez/By: Jason Saul

Corporations are increasingly moving away from social-responsibility programs that just give away money and more toward using philanthropy as a business strategy that produces both financial and societal returns. As a result, nonprofit organizations must find new ways to work with companies other than asking for donations, writes Jason Saul, chief executive of Mission Measurement, a consulting firm that helps companies measure and improve social impact.

The goal of corporations is not to do good, but to develop strategies that make possible unlikely business expansion by overcoming social barriers to entry.a Mr. Saul advises charities to embrace similar thinking; they a need to figure out how to sell their impact as a business proposition a as more businesses expect greater accountability for the money they give.

As an example of a new approach companies are taking, Mr. Saul cites the success of Unilever in recruiting and training poor Indian women to become local sales representatives of products specially made for low-income people. As a result, the company nets $100-million annually from the venture and is providing jobs to 45,000 people.

Unilever also co-founded Global Handwashing Day, along with UNICEF, the World Bank, and Procter & Gamble, which resulted in a decrease in the deaths of needy children from germs transmitted through diarrhea and pneumonia. The effort, which promoted use of the company as Lifebuoy soap, made the product one of Unilever as fastest-growing personal-care brands.

Mr. Saul writes that Unilever and many other companies now give less attention to cash grants and place more emphasis on an on cash resources that they have in far greater abundance their supply chains, distribution networks, and marketing prowess, and their business footprints to create business strategies that deliver significant social value.

Philanthropy, he writes, is moving beyond giving away money, and charities that do not keep up risk being left behind.

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