Hello Legacy Makers! This March we are focusing on our “Profit” pillar and bring to you content revolving around philanthropy, responsible audits, social enterprises and the concept of CSR.

When people first consider corporate social responsibility, common ideas of charity and philanthropy are central to businesses giving back. “Giving back” and “volunteering” usually have to do with charity and involve sending off money to distant causes where we never really see the impact or outcome of our contributions. Charities are increasingly complex and barely transparent to many donors and consumers. People donate to charities due to brand recognition and because the charity asks of it, however we don’t often think of the quality or outcome of our donation. Although charities do great work, we must also be critical of some charities and ask the following questions:

Does this charity provide a band-aid fix or does it target the root of the problem?

Many issues that charity seeks to address are large and very complex. Quite often, these issues require political, societal, cultural and economic change that small amounts of money from anonymous donors abroad will not change. Political corruption, bribery, alliances and foreign relations may be burdens to actual progress and charitable donations do not assist in changing these conditions. Perhaps the conditions of the situation will be temporary, however real, long-term change is not a reality for small donations.

Where is my money actually going?

Charities managing donations do not necessarily delegate money towards the most-deserving recipients. Do your donations go directly toward the communities who most need it? Toward research that will better the cause? Toward corrupt states that will misuse donations? Understand the recipients and outcomes of your donation through careful research and speaking with the charity. Learn how your money will be used and how you can learn of the outcomes and results of your donation.

How do my donations actually affect recipients of aid?

Even when you understand that your charitable donation will affect direct recipients, are these donations truly beneficial for communities? Companies like TOMS are for-profit with a twist; the individual can buy a pair of shoes and have another pair given to those in need. TOMS tells a story with 2 messages: 1) there are children who are poor and underprivileged because they don’t have shoes, and 2) giving a pair of shoes is the best way to solve their issues. Actual research done on the efficacy of TOMS’ shoe-giving showed that recipients of TOMS wore them sometimes, however this didn’t help larger issues like school attendance or self-esteem. Additionally, recipients of aid became more dependent on outside resources and donations which is damaging to how communities access resources. Other results of TOMS shoes are that local cobblers and shoemakers go out of business; thus hurting local businesses. Also, TOMS puts greater social distance between donors abroad and recipients of donations. Stereotypes of images of poor children and communities in need perpetuate the idea that the poor are helpless and passive and the message behind TOMS contributes to such an ideology.

How am I donating and does this just gratify my need to be a “good person”?

Donating often provides donors with a boost of self-esteem and self-worth. It has less to do with the thought of the outcome of the donation, and more of how donating made the donor a ‘better person’. Donation can often be misconstrued from meaningful giving to a way that disconnected donors can give money and feel gratified as humans. Although many donors are distanced from the problems at hand, the guilt and pressure they feel to do something can be fixed with a donation toward charity. Next time you give, be mindful of the cause you are donating to and how the donation made you feel.

Effective giving: What is it and how does this differ from the traditional concept of charity?

Some new concepts based on charity are emerging as alternatives to charity. Effective giving is the concept that all lives are equal around the world and the use of our money should be

to help the most people with the money we donate. For example:

“It takes $42,000 to train a guide dog to help a blind person, according to Guide Dogs of America. But to really help the blind, you could put that $42,000 toward funding eye surgeries for people in Africa suffering from a bacterial eye infection called trachoma. Since surgery costs as little as $25 and is 80% effective, you could theoretically restore the sight of 1,344 people with that $42,000” (LearnVest, 2012).

The use of resources like Charity Navigator, the Disease Control Priorities Project, GiveWell, Giving What You Can, and Charity Intelligence can help provide information about actual efficacy of charities and donations. This can guide effective giving.

Tips for effective giving:

  • Don’t be swayed by stories or the largest “charity brand”: Just because the charity is well known and pushing for your donation does not mean they are the most effective. Understand the charity in and out before you donate and compare it with more effective charities.

  • Look for proven effectiveness of the charity: Use resources like Charity Navigator, the Disease Control Priorities Project, GiveWell, Giving What You Can, and Charity Intelligence to provide background information to charities before donating

  • Consider how you give charity: If you want to make charity donations an ongoing practice, perhaps taking from your raise or percentages of your income can provide an ongoing way to donate and even out wealth distribution across the world (see Give What You Can).

  • Donate to developing countries and women: Where has wealth accumulated in the world and how can you use your donation to equal the playing field and provide better access to disadvantaged communities?

Further resources:

#charity #csrsblog #profit #money #costs #socialenterprise #philanthrophy

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