Fundraising campaigns are gearing up for the holiday season and November’s Giving Tuesday will set important benchmarks for 2022, reinforcing America’s long and important history of philanthropy

According to U.S. News, U.S. citizens are consistently the world’s most generous individuals, and the propensity to give goes beyond monetary factors. Civic engagement is also a core component of American culture, and time invested in various forms of activism continues to be a common practice within the US (most recently demonstrated at school board meetings). 

Activism, however, has evolved as younger generations took on the charge in 2020 and leveraged social media for social causes. Digital protests and social movements were on full display last year — and Big Business took notice and took part in a big way. 

Although business buy-in for a fundraising event may be applauded, or an organizational mission for addressing a social concern may be well-intentioned (remember TOMs Shoes), it can also be counterintuitive. For instance, CEO and superstar endorsements and contributions tend to garner greater attention for the celebrities themselves rather than generating real results for the mission at hand. And the promotion of philanthropic consumption (such as buy one, give one campaigns) can result in virtuous action being depicted as “easy and thoughtless,” downplaying the true dedication warranted.

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Cause-related marketing can attract attention to an issue, but that attention may translate into nothing more. Or worse, it could backfire.

Take, for example, the epic failure of Brewdog’s Pink IPA, which was meant to generate awareness for gender equality concerns. The release of the dubbed “Beer for Girls” on International Women’s Day in 2018 was seen as a poorly executed marketing stunt

Brewdog founder, James Watt, admitted fault and this embarrassing initiative now serves as a warning for those thinking that business and activism can easily go hand-in-hand.

Given that participation can be risky, a rather popular method for showing support is the signing of collective public letters that call for action. Signatories can feel safe by being aligned with a group while being viewed as doing something while really doing nothing.

More and more firms, however, are being called to put their money where their mouth is. This is where things get tricky since shareholder money sometimes serves as a source for the support that is being called for.

Shareholder money sometimes serves as a source for the support that is being called for.

Passion and preference for a cause varies, as does the means by which it should be addressed. And dedication toward corporate social involvement has been depicted by those who have a financial stake in the firm to range from either inconsequential to downright confrontational.

Personal values and political interests can cause conflict amongst those who are vested in the company, and so firms should be wary of activist initiatives that are separate from their core competencies. Social efforts can lead an organization down divergent paths, redirect company resources to external efforts, and distract from opportunities for innovation. 

Moreover, corporate involvement bypasses the value of a human element for addressing social matters.

Social movements should be composed of people advocating their interests, not industries. 

Social issues are best fixed (or fought for) by ideas and cultural shifts, and this is accomplished by people supporting programming, research agencies, think tanks, and community events of their choosing — not Big Businesses that use donations and demonstrations as window dressing at best or a sheepskin at worst.

Anand Giridharadas’s book “Winners Take All: The Elite Charade of Changing the World,” illustrates how philanthropic activities and virtue signaling often serve as a means to cover up corporate discrepancies. And since technological advancements have increased forms of transparency (drawing attention to contentious investments) and the unearthing of organizational processes is becoming easier (as demonstrated by the Facebook Papers), it is perhaps not surprising that an influx in woke-washing is occurring to distract or detract attention.

In order to combat these hidden agendas and misguided objectives, firms should be charged with decentralizing their social efforts and financial contributions. CEOs and board members are free to use their wealth as they see fit, but shareholder wealth should not be tampered with. 

CEOs and board members are free to use their wealth as they see fit, but shareholder wealth should not be tampered with.

Rather than sourcing from company funds as a centralized strategy for corporate philanthropy or virtue signaling, firms should encourage and empower investors and employees to be better stewards of the communities in which they live and serve – according to their own interests, preferences, and needs.

Firms must stick to what they were intended to do – to provide value regarding their offerings and market them accordingly. Not capitalize on social causes or contaminate charitable funding streams.

Change should come from the ground up, not corporate power players using their platforms and their investors’ wealth. 

Dr. Kimberlee Josephson is an Associate Professor of Business at Lebanon Valley College in Annville, PA. She serves as an Adjunct Research Fellow for the Consumer Choice Center and her research and op-eds have been featured in various Pennsylvania and national outlets.

One thought on “Dr. Kimberlee Josephson: Why people not profits should determine if social causes receive contributions”

  1. Wow. Never thought I’d see b+l publishing a socialist argument like this. Certainly goes against conservative capitalism which advocates deregulation and free speech at all costs.

    Look at the citizens united case and the conservatives that argued vehemently in support of the conservatives on the supreme court who ruled that corporations can spend money on political speech without burdensome government regulations.

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