Most businesses are looking to expand their profits and, at the same time, drive their social values to gain a high reputation across the industry. With the aligning values of social responsibility, it is essential to know the difference between philanthropy and CSR. Top leaders and business owners are falling behind in the dilemma of how to get along with their social responsibilities and complete their common goal of social good.
If you are looking for details on how to differentiate philanthropy and CSR, read the blog to explore information on approaches. Find the relevant details relating to donations and non-profit goals and accomplishments. So, these are the details on defining the concept of philanthropy and CSR.
What Is Corporate Philanthropy?
Corporate Philanthropy refers to the activities that companies voluntarily initiate to manage impacts on overall society. Generally, these philanthropic activities include monetary investments, product or service donations, in-kind shares, employee volunteer programs and other business arrangements. Corporate philanthropy as a concept is becoming more popular day by day, with a certain level of accountability and transparency from corporate entities.
Some of the types of corporate philanthropy are:
- Matching Gifts
- Volunteer Grants
- Employee Grants
- Community Grants
- Community Works
- Scholarships
- Volunteer Support Initiatives
- Corporate Sponsorship
What Is CSR Or Corporate Social Responsibility?
Corporate social responsibility (CSR) is a management concept that describes how a company contributes to the community’s well-being and society through environmental and social measures. CSR plays an integral role in how customers and their target audience perceive companies and brands. It also helps attract employees and investors who prioritise the company’s CSR goals.
8 Differences Between Philanthropy and CSR
CSR and philanthropy are often misconstrued as synonyms; however, certain core differences between them help businesses redefine social and financial contributions.
1 – Intent & Motivation
Philanthropy comes with the intent and desire to give back to society for social improvements. On the other side, the motivation behind CSR activities is to follow sustainable practices, community relations, and ethical behaviour. So, this is the core difference between philanthropy and CSR based on social intents.
2 – Scope
In terms of scope, philanthropy focuses on specific projects that might involve single donations, grants, and sponsorships. On the other hand, CSR integrates the entire organisation by allocating resources, time, and expertise to lead changes and transformations in society.
3 – Accountability & Transparency
Companies that follow CSR activities are accountable to shareholders, employees, customers, and the public. In the case of philanthropy, donors might have discretion on where the funds go, so it would be difficult to address any specific person.
4 – Strategic Alignment
Philanthropic decisions might be personal or organisational, while CSR aligns with the strategic goals of the company’s mission, vision, values, and expertise. It leverages the company’s capability to create value for both business and society.
5 – Immediate Effect
Another point of difference between philanthropy and CSR depends on significant impact coverage. Philanthropy creates immediate or short-term impacts with specific projects; on the other hand, CSR encompasses broad activities like sustainability, ethical practices, community engagements, and others.
6 – Business Integration
In terms of business integration, there is a significant difference between philanthropy and CSR. So, moving towards philanthropy, it is often separated from core business activities and is not connected with operations; however, for CSR initiatives, it is integrated with business practices and comes under the business core policies and regulations.
7 – Stakeholders Engagement
Philanthropy typically involves external entities and organisations with more transactional relationships, so there is less stakeholder engagement. On the other hand, CSR involves stakeholder participation of employees, customers, suppliers, and investors, ensuring responsible business operations.
8 – Long Vs Short Term
Another core difference between philanthropy and CSR is their long-term and short-term effects on social values. On one hand, philanthropy might create long-term or short-term impacts on society, while CSR focuses on long-term goals and sustainability, aiming for business development.
Philanthropy Vs CSR: Different Types
As we understand the difference between philanthropy and CSR, let’s move on to understanding its types to explore the concepts in more detail.
Types of Philanthropy
Here is the list of philanthropy activities that you must know to expand your social values:
- Individual Philanthropy
- Corporate Philanthropy
- Foundation Philanthropy
- Crowdfunding
- Advocacy and Policy Change
- Religious and Faith-Based Philanthropy
Types of CSR (Corporate Social Responsibility)
Here is the list of CSR that you need to assess for social and environmental effects:
- Environmental, Social, and Corporate Governance (ESG)
- Economic Responsibility
- Philanthropic Responsibility
- Ethical Responsibility
Long-Term Sustainability With Philanthropy & CSR!
The integration of philanthropy and CSR into the business will create the foundation for sustainability. It will have a positive impact on society and achieve the common goal of sustainability, philanthropy, ethical business practices, and economic development. Companies investing in these practices are developing more positive outlooks across the industry. CSR initiatives can help support social and environmental issues, build stronger relationships, support customers, and align social values for long-term goals.
