Philanthropy or Charity? The Difference a Purpose Makes in 3 Steps

Charity is an act born of kindness – giving money, a coat or food to those in need. Philanthropy is a philosophy. Derived from the Greek word philanthrōpía, meaning a love for mankind. True and authentic philanthropy is an altruistic intent to promote the welfare of others, and a belief that through philanthropic efforts one can improve lives. Charity is tactical, philanthropy is strategic. Charity provides a short-term solution, philanthropy is in it for the long haul.

So, which is your company engaged in?

Let me be clear: there is nothing wrong with charity. But because charity is fundamentally connected to profitability (I made $10, I’ll give away $2) it is ultimately not as sustainable. The business of business should be improving lives. Through your products and services first, and also through your philanthropy. The two should be inexorably linked and built on the foundation of your company’s purpose. When they are not, strange things happen.

Back in 2009, following a tough year, Berkshire Hathaway-owned Netjets made an announcement that sent shock waves through the Columbus, Ohio community where they are based. Business was challenging, so they would slash millions of dollars of funding already committed to area non-profits. This, from a company that earned over $5 billion that year alone. The brand took a big hit to its reputation (you can read about it here). Community leader and L Brands founder/chairman Leslie H. Wexner wrote a strongly worded letter to Warren Buffet admonishing him for both the decision and the reasoning, saying “Well, we all have had a tough year.” When you are in the business of charity, you cut back when things are bad. When you are in the business of improving lives, you find ways to live that purpose before – and beyond – profit.

As my partner Barry Chandler reports – in his Blog Post “The Rise of the Purpose Driven Brand” – the ancient Greeks had it right, requiring that businesses looking to operate a storefront in their Hellenic cities “declare how it would benefit the community before it was allowed to occupy space.” Businesses have the opportunity (and we believe the moral obligation) to change the world they exist in for the better.

To create a purpose-driven philanthropic strategy, you have to commit to three steps … and one hard truth.

1. Start by understanding one important fact: nobody cares about your business (that’s the hard truth). They do care however about what you care about. Your beliefs, your values, what you stand for and – perhaps just as important – what you stand against. What future are you trying to create? What problem are you trying to solve for humanity? How will you change the world through what you do? Do the work to define your world view and philosophies first. (Hint: think big, because the answers will lead you to your purpose.)

2. Once you understand and have articulated your brand’s purpose – the higher purpose, the reason you exist – then you will be able to develop a purpose-led philanthropic focus. If you have done your work correctly, it will be clear where and how you should focus your time, talent and resources. Because it will spring from your purpose, and be relevant. Put simply: it will matter. (Hint: writing checks may be a strategy, but its is not the focus.)

3. Once you define your philanthropic purpose, put in place the strategies to bring it to life. A business is ultimately a manifestation of the values of its founders, its employees and the customers/community it serves. Engage them in crafting the programs that will support it. Purpose only works if you live the brand you speak in every interaction, in every engagement and through every donation. (Hint: your strategies should leverage the time and talent of your team … before your company’s money.)

When done correctly, your purpose (and philanthropic focus) provide a filter for your thinking and decision-making, especially when times are tough. By aligning your philanthropic efforts with your purpose-driven strategy you can forge deeper emotional connections for your brand with employees, clients and community. These connections create reputation capital (and Heartspace) that will help you through challenging times. Altruism is good for the community … and good for business too.

Haley Boehning is the Chief Change Officer at Storyforge. Building on 20+ years driving change for Fortune 500 clients, non-profits and start-ups, Haley has developed a pragmatic approach to change through storytelling, developing relevant, consistent and emotionally compelling messages and targeted communications strategies that help brand and culture triumph in times of great change.