Nonprofit Newswire | The Democratization of Corporate Philanthropy—Really?

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July 7, 2010; Source: Forbes.com | The author of this blog posting is the founder and president of a firm called Do Well Do Good LLC, which partners with companies that want to “increase the positive impact of their social responsibility initiatives.” As the former director of Office Max’s Community Affairs Department, he is described by Forbes as “a Chicago-based expert on corporate social responsibility, philanthropy, and cause-marketing,” which enabled him to write about the “democratization of corporate philanthropy.”

Democratization, in this article, is the corporate philanthropic fad of philanthropic contests such as Pepsi Refresh, Kohl’s Cares, and the Members Project. The author says that these contests in which people vote for charitable giving priorities place “the general public . . . in charge of dictating a company’s giving . . . by using social media.” He then defends the secrecy rampant in corporate philanthropy as “absolutely necessary because of the sheer number of requests corporate giving officers receive.” (He says that corporations don’t have to disclose details of their corporate philanthropy, which is true for giving that doesn’t occur through corporate foundations, which like other foundations have to file 990PFs and disclose the recipients of their philanthropic giving.)

So let’s get this straight. Giving “the public” the ability to vote for the charitable distribution of a small amount of corporate largesse is democratization and so is keeping the philanthropic grantmaking of major corporations secret. Every grantmaker makes the argument for secrecy. Remember, private foundations argued against making their 990PFs open to public disclosure too.

The argument that corporate grantmakers can’t fend off applicants unless they keep their grantmaking secret is as bogus in the corporate world as it was among foundations until they were compelled to disclose. Corporate marketing programs such as Pepsi Refresh (described by the author as a “giant” program of $20 million), even with their use of social marketing tools, don’t do much to introduce democracy into the highly undemocratic world of corporate philanthropy.—Rick Cohen

  • Hildie

    These types of “contests” like Pepsi Refresh and other voting for your favorite charity, should really be called “American Idol Philanthropy”. Not exactly the kind of thoughtful charitable giving many of us in the nonprofit sector choose to embrace and promote. (credit to friend Alyssa in Colorado for her term “American Idol Philanthropy).

  • Andrew Schwartzberg

    Anyone who truly believes that this new corporate giving fad of the public voting for grants online is democratic is fooling themselves. Do you think there are large numbers of people out there going to the Pepsi Refresh site to read through all of the grant requests from the nonprofits in their community so they can vote on the one they think is most deserving? Think again. The people voting on these requests are those who are asked to do so by one of the nonprofits in the competition. The voters won’t read any of the other applications. They will simply go to the site and vote for the one they were asked to by their friend or relative who works for Agency X. So really these are popularity contests and have zero to do with the actual merit of the grant request. As a professional grant writer this trend absolutely infuriates me. The time and effort I take to craft a grant proposal is meaningless when it just boils down to how many people you can drive to a website.

    Democratic? No.
    Mindless? Yes.

  • rick cohen

    Dear Hildie: How funny! When I wrote this piece, my 14 year old daughter and I discussed adding American Idol and Dancing with the Stars to the piece as comparisons with this kind of philanthropy. I guess Alyssa scooped us. But American Idol was exactly how this read to us. Thanks so much for your comment.

  • rick cohen

    Dear Andrew: Very good points, all. So my question is this, who really believes the argument of the author of the article, a former corporate marketing/community affairs guy, that these American Idol contests are examples of democracy in corporate philanthropy? Are we all so uncritical as to simply accept these contentions as opposed to listening to the cogent points you made in your comment? Thanks for adding your comment to this newswire.

  • rick cohen

    Dear Andrew: Very good points, all. So my question is this, who really believes the argument of the author of the article, a former corporate marketing/community affairs guy, that these American Idol contests are examples of democracy in corporate philanthropy? Are we all so uncritical as to simply accept these contentions as opposed to listening to the cogent points you made in your comment? Thanks for adding your comment to this newswire.