Welcome to class of Corporate Philanthropy in Emerging Markets Dr. Satyendra Singh University of Winnipeg Canada ssingh5.

Welcome to class of

Corporate Philanthropyin Emerging Markets

Dr. Satyendra SinghUniversity of Winnipeg

Canadawww.uwinnipeg.ca/~ssingh5

Corporate Social Responsibilities:in Developing Countries/Emerging Markets

Level of Philanthropy

• Philanthropy– Do good by giving…

• Individual philanthropy– Need to save (EM), lack of trust, unstable government

• Corporate philanthropy– …with the aim to develop

• Business opportunities, Public relations, Employee morale, Brand image, Cause-related marketing campaign

• Strategic philanthropy– …with the aim to combine social and economic benefits

to develop distinct competitiveness

Philanthropy: the Context• Philanthropy is in decline• Difficult to justify charitable (social) expenditure in

terms of bottom-line (economic) benefits• Corporate philanthropy is unnecessary

– No-win situation– Trade-off between the goals– Let employees donate themselves tax rebate– Individual donor or corporate same benefit

• We need strategic philanthropy– Win-win situation– Context-focus giving Where to focus; how to contribute

Top 5 Issues for Which Businesses Give

Types of Corporate Philanthropy

External vs. Internal

Use own productsToo littleNot significant

Grant25% cash75% R&DConsultancy

Unrelated↑ PR, ↑ demandLacks credibility

Worst of allConfusedBoard member wants itEg., Sponsor an event

Strategic Philanthropy: Social and Economic

The Logic of Giving

Without Giving

$30m Profit

-$9m 30% tax

$21m Net

With Giving

$30m Profit

-$2m Gave

$28m Profit After Giving

$5.6m (20% tax, ie ↓ tax bracket)

$22.4m Net

Even after giving $2m, firm saved 1.4m extra ↑ dividends, EPS

Where to Focus

• Where social and economic benefitsnot in conflict• Contribute to society

– E.g. trained educated and healthy labour, natural resources to produce high quality goods and services, preserving environment, waste management, pollution reduction, boosting social and economic conditions in EM

• While being different and ↑ business performance– E.g. Computer company trains students, population– Travel companies train restaurants, hotel, booking– Tour operator sponsors a heritage site, and thus has

preferential access to the site for its tourists

How to Contribute to Value Creation…

How to Contribute to Value Creation

• Selecting the best grantees– Urgent/overlooked problems, school dropout rates– Use the grantee’s performance to measure our performance

• Signalling other funders– Train other funders, offer matching grants…

• Improving the performance of grant recipients– Capital provider to engaged partner, learn from each other, ↑

effectiveness of organisations as well

• Advancing knowledge– Set a new research agenda for public or govt policies– New wheat, rice variety, GMO

The Chocolate company