Welcome to class of Corporate Philanthropy in Emerging Markets Dr. Satyendra Singh University of Winnipeg Canada

Corporate Social Responsibilities: in Developing Countries/Emerging Markets

Level of Philanthropy Philanthropy –Do good by giving… Individual philanthropy –Need to save (EM), lack of trust, unstable government Corporate philanthropy –…with the aim to develop Business opportunities, Public relations, Employee morale, Brand image, Cause-related marketing campaign Strategic philanthropy –…with the aim to combine social and economic benefits to develop distinct competitiveness

Philanthropy: the Context Philanthropy is in decline Difficult to justify charitable (social) expenditure in terms of bottom-line (economic) benefits Corporate philanthropy is unnecessary –No-win situation –Trade-off between the goals –Let employees donate themselves  tax rebate –Individual donor or corporate  same benefit We need strategic philanthropy –Win-win situation –Context-focus giving  Where to focus; how to contribute

Top 5 Issues for Which Businesses Give

Types of Corporate Philanthropy External vs. Internal Use own products Too little Not significant Grant 25% cash 75% R&D Consultancy Unrelated ↑ PR, ↑ demand Lacks credibility Worst of all Confused Board member wants it Eg., Sponsor an event

Strategic Philanthropy: Social and Economic

The Logic of Giving Without Giving $30m  Profit -$9m  30% tax $21m  Net With Giving $30m  Profit -$2m  Gave $28m  Profit After Giving $5.6m  (20% tax, ie ↓ tax bracket) $22.4m  Net Even after giving $2m, firm saved 1.4m extra  ↑ dividends, EPS

Where to Focus Where social and economic benefits  not in conflict Contribute to society –E.g. trained educated and healthy labour, natural resources to produce high quality goods and services, preserving environment, waste management, pollution reduction, boosting social and economic conditions in EM While being different and ↑ business performance –E.g. Computer company trains students, population –Travel companies train  restaurants, hotel, booking –Tour operator sponsors a heritage site, and thus has preferential access to the site for its tourists

How to Contribute to Value Creation…

How to Contribute to Value Creation Selecting the best grantees –Urgent/overlooked problems, school dropout rates –Use the grantee’s performance to measure our performance Signalling other funders –Train other funders, offer matching grants… Improving the performance of grant recipients –Capital provider to engaged partner, learn from each other, ↑ effectiveness of organisations as well Advancing knowledge –Set a new research agenda for public or govt policies –New wheat, rice variety, GMO

The Chocolate company