A 2018 study performed by a trio of college finance professors from southern universities found that hedge fund investors with poor returns were almost two times more likely to make charitable donations.
Even those experiencing low cash flows were also 50 percent more likely to donate to a charity.
There are myriad reasons for businesses, both successful and struggling, to be motivated to give to charity. For one thing, according to a 2016 study done by Deloitte, working Millennials were more apt to perceive and report the culture of their companies as “very positive” if the firms they worked for actively engaged in volunteering for the betterment of the community.
“We rise by lifting others. Giving back and the need for corporate philanthropy is skyrocketing, “ Chicago resident Thomas Kane said in a February 2020 article.
“I think that the [M]illennial generation is leading the cause and [is] really changing the landscape by rolling up their sleeves and getting involved.”
Kane said that it’s corporate America responding to where Millenials are headed in terms of social responsibility, and not the other way around.
“Corporations are beginning to respond [to Millenials] in a large way, generating positive impact for a long list of beneficiaries through volunteer programs, donations, grantmaking, etc.,” he said. “Organizations (and individuals) need to focus on charitable giving because it really is their social responsibility.”
A real-world example of local organizations serving this responsibility is shown in a 2015 Indiana University Lilly Family School of Philanthropy study. The study reported, in a review of 70 corporate organizations with business activities in Chicago proper, that nearly all firms described made donations to charities in fiscal year 2013.
Human services topped the list of the needy areas donated to by the companies examined in the study.
“Technology and viral engagement [are] encouraging companies to give back in more non-traditional ways,” commented Kane in the Young Upstarts article.
He went on to imply that companies have discovered that being known for their philanthropy is one way to attract charitable-minded individuals from the workforce as employees.
“Today’s workers look to social media channels to make decisions about what causes support and which employers are leading the charge,” said Kane.
And those workers want to go to where the change is happening, apparently.
A 2015 study on global corporate responsibility carried out by Cone Communications found that 91% of international buyers want companies to go above and beyond their bottom line of profit and make concerted efforts to address social and environmental issues.
Meanwhile, about the same amount of consumers, 90%, actually would avoid a company they found out was engaged in unscrupulous activities or devious business practices.
Not only do these numbers prove the point about the economy being led by a consumer desire to patronize and work for companies involved in philanthropic and charitable activities, but it also underscores his point that it is part of the responsibility of business organizations to focus on generous giving, not only individuals.
This idea flies in the face of a notion made popular by the 2003 Canadian documentary film The Corporation, which claimed that an old law put on the books during the onset of limited liability corporations forbade them from operating in such a way that would make their primary obligation anything other than the profit of their stockholders, and above all else.
That is actually not factually accurate at least according to a U.S. Supreme Court ruling on a corporate case involving Hobby Lobby, which included these words in the court’s findings in June of 2014:
“Modern corporate law does not require for-profit corporations to pursue profit at the expense of everything else, and many do not.”
Maybe big corporations aren’t all like the greedy and evil types we are so used to seeing in so many recent blockbuster films, after all.