The purpose of risk in corporate philanthropy


Management of reputation risk is increasingly a driving force within responsible business.  Deloitte’s 2014 global survey on risk reputation noted that 88% of executives are focusing on reputation risk as a key business challenge and that reputational issues can have the biggest impact on revenue and brand value.

Within the world of corporate philanthropy, considering risk is crucial.  Increasingly businesses are seeking to create a credible ‘halo’ effect by improving perceptions of their corporate brands through association with a philanthropic effort. Charitable giving is often seen as a credible way for companies to demonstrate a genuine connection with communities and build positive public association.

However, this type of credibility  only succeeds when the issues of transparency and trust are treated as paramount. Our research into giving by the FTSE 100 discovered that three quarters of the British public felt that businesses should be open and transparent about their charitable giving.

BALANCING RISK AND REPUTATION IN CORPORATE PHILANTHROPY

With the increasing calls for greater accountability, we are finding companies using the agenda of risk  to engage with issues and ask more challenging questions of themselves; examining whether their philanthropy delivers real reputational benefit or leaves them exposed to unidentified risks. Such an exercise helps to make sure their giving is more strategically aligned, planned and reported on.

At CAF, we work with companies to help them investigate and understand how best to deploy their corporate charitable giving in a way that delivers the greatest impact but also safeguards their funds and their reputation. As leading trusted experts in global philanthropy, we have devised an approach that ensures that we combine end-to-end due diligence and charity validation services in accordance with HMRC guidelines. We ensure £150 million of corporate and employee donations pass safely to charitable organisations each year, and provide best practice advice and cross-sector knowledge.

RISK - THE HALO EFFECT

Ultimately, in philanthropy, the advantage of focusing on risk is not what it will limit but what it can enable and strengthen. By prioritising risk, businesses can instil the same rigour and discipline in their corporate philanthropy as they would in their core business and, by doing so,  achieve  credibility.  For in creating a positive ‘halo’, the  intentions and behaviours of a company’s philanthropic activity will often  inform or confirm our perception of who they are and what they stand for.

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