Declining Corporate Philanthropic Activities Of USA And Its Impact On Non-Profit Organizations

Literature Review

Literature review is the collection previous research information from different scholars. The authentic information collected from different research scholars helps in enhancing the quality of overall research study. This literature review will be focusing on the declining corporate philanthropic activities of the USA corporate organizations. The focus of the literature review will also be on the effect of declining corporate philanthropy of corporate organization on the non-profit organizations. The previous researchers have indicated that USA corporate organization has drastically reduced their overall corporate philanthropic activities. However, the impact of such declined corporate philanthropic activities of corporate organizations high affected the non-profit organization in terms of getting any charitable donations.

In order to conduct the literature review, various secondary resources will be researched for collecting authentic research information. Moreover, in this literature review, authentic journals, books, websites, magazines will be accessed for collecting accurate and authentic research information. The whole literature review will be based on the information collected from the secondary sources. Moreover, the in-depth information associated with the secondary sources will definitely enhance the quality of the overall research paper. The literature review will use Google scholar and other library database for accessing authentic journals and books. Apart from that, the literature review will also use Google, Bing and other search engine for collecting in depth information regarding the research topic.

This section would take into account the declining factor of philanthropic involvement by leaders of U.S. corporations in the year 2016 or 2017 along with the adverse impact the decline will have on non-profits. The purpose of this qualitative case study research is to explore the reasons for declining philanthropic contribution to nonprofit organizations by the U.S. Corporations. The study will also explore the resulting impact on nonprofit organizations.The year 2016 witnessed a drop off of 50%of the portion of companyprofits slated for corporate philanthropy (Phaholyothin 2017). Corporate philanthropy has been influential to the survival of the non-profit organization along with the competitive positioning of the companies. USA has been measured in being the top country related to corporate philanthropy.

The literature review is entirely dependent on the declining rate of corporate philanthropic activities of the USA corporate organizations. Moreover, the study is also concerned about the effect of declining corporate philanthropic activities on the non-profit organizations. The literature review will describe the concept of the corporate philanthropic activities and their impact of the corporate organizations. Apart from that, the literature review will assess the debates around corporate social responsibility (CSR) and corporate philanthropic activities related to the corporate organizations. Apart from that, the declining rate of corporate philanthropic activities of USA corporations will be described in this literature review along with its affect on nonprofit organizations.

Background

From the literature information, it has been cleared that previous scholars have very narrowed down literature information on the topic of the researches. However, the recent scholars have emphasized more on the topic of the research. Apart from that, the authentic journal articles and books provided lot of authentic literature on the topic of the research. Such in-depth and detailed research study can as effective secondary sources for further research studies. Apart from that, the authentic websites and magazines have provided detailed and evidence based information for enhancing the quality of the overall research results. In this way, the literature reviews has huge scope in enhancing the quality of the research and providing secondary information to the further research studies.

Figure 1. Factors constructing Corporate Philanthropy

Source: created by author

Corporate philanthropy is the act of donating to a foundation or charity, whose mission is to fight against the social issues and deliver social impact (Sz?cs et al., 2016). It generally consisted of cash donations, but it can also be the form of providing volunteer time and other facilities offered by the organizations towards for the social benefits (Hungerford, 2016). On the other hand, Gautier and Pache (2015) opined that corporate philanthropy is the most significant part of overall corporate social responsibility and such activities is primarily concerned with social and community development by the organizations. Well established and strategically executed corporate philanthropic activities have high level of impact on the corporate organizations from perspective of public standpoint. It can also be helpful for the corporate organizations towards establishing good corporate image in the market. Corporate philanthropic activities go beyond the profit level of the organization, where the corporate organizations do not much think of their profitability, but they think of the social development surrounding them. However, strategically executed philanthropic activities help the corporate organization towards overcoming the stiff competitive pressure in the market through increased competitive advantages (Blowfield & Murray 2014). In this way, the effect of philanthropic activities may not be seen in the directly on the short term profit level of the corporate organizations, but the effect will surely be seen in long term profit level of the organizations.

Charitable contributions in USA by corporate organizations have been declined by 14.5% in real dollars in the last year. Furthermore, over 15 years, corporate giving has been declined by 50% as a percentage of profit of the corporate organizations (Muller et al., 2014). Moreover, most of the corporate organizations are seeing no such profit from such philanthropic activities and started to be unwilling to invest in such activities (Sz?cs et al., 2016). In this way, the overall charity and donations in the non-profits of USA has been declined drastically with less philanthropic activities of the corporate organizations.

Research Methodology

The issue of whether the companies need to engage in the factor of charitable giving has over the years been the subject of heated discussion. During the 19th century, various rulings of the court delivered the usage of the corporate funds for the purposes of charity effectively illegal (Sz?cs et al., 2016).  The Proprietors of the Charles River ridge v. Proprietors of the Warren Bridge case proscribed the exercise of corporate funds for the activities incongruent to the employed aims of the association that facilitated stockholders in suing their organization for such act of ‘ultra vires’.

Nevertheless, leaders of corporations have made an attempt in justifying their contributions towards libraries, schools, YMCA amenities in company towns as a strategy of recruiting employees. During the times of economic downturns towards the end of the nineteenth century, associations more gradually began contributing funds to the purposes of charity and were competent in defending themselves against the ultra vires claims of the stockholders in courtroom by arguing that these were legitimately related to business, as they were directly benefiting the employees (Hungerford, 2016).

Debates have been there, both within the courtrooms as well as in the general dialogue, about the legitimacy of such corporate philanthropic initiatives that has continued into the twentieth century (Jones et al., 2014). These were moreover fashioned by various conflicting forces: a sentiment of anti-business within some contexts that rejected the donations of the corporations as being tainted, the pervasiveness of laissez-faire arguments asserting that it is immoral for the associations in giving away the money of the stakeholders. Adding to that will be the increased examination of the corporate activities as ultra virus.

Most of the court cases still continued to assess the corporate philanthropic activities as ultra viruses. In such cases, the philanthropic activities are set as the precedent for the norms of the profit maximization for the shareholders (El Ghoul et al. 2017). This rule insists that a corporate organization is highly organized and it is basically carried for increasing the profit level of the shareholders. The inexcusable fact is that non-distribution of profits among the shareholders for devoting them to other purpose. By the year of 1920, there was a sentiment of the public towards the corporate philanthropy of the corporate organizations (Friedman & Heinle, 2016). From then, it becomes the belief of the people that corporate organizations are in duty of doing something for the goods of community development that is beyond the legal responsibilities. Apart from that, such ruling reflects as the growing perception of the people for the corporate organizations to have positive role in the overall development of the society. The notion of corporate philanthropy becomes highly significant with attempt of different scholars towards clarifying and explaining the concepts of this topic. Furthermore, the proliferations of several books have emphasized on the importance of corporate philanthropy on the overall good of the community and society.

Corporate Philanthropy and Its Impact on Corporate Organizations

It has been argued by some that corporate philanthropy has essentially been an ‘agency cost’ that has the ability in bringing advantages to the individual executives along with the managers through development of their personal reputations or prospects for encroachment, however this generally comes at the cost of the wealth of the stakeholders. Several responses materialized, sharing the assurance about the possibility of justifying the corporate social responsibility notion.

In mapping out of the landscape of the literature, El Ghoul et al. (2017), recognized four main advancements to the subject, each of which has been pertinent to the topic of ‘corporate philanthropy’: a. Instrumental theories where the activities of CSR (Corporate Social Responsibility) are being observed as influential to creation of wealth which is strategic philanthropy; b. Political theories emphasizing the social power along with related corporation duty; c. Integrative theories arguing the needs of the business for incorporating the social demands along with social values for the sake of growth and endurance and d. Ethical theories focusing on the normative questions of the relationship between society and business.

However, conflicting notions are being defined clearly in the literature. For instance, some equate the corporate nationality with strategic philanthropy with others considering the strategic CSR as being dissimilar from the CSR uses (Grant, 2016). It highlights the ‘competitive advantage’ of CSR, disagreeing on the instrumental advancements like the cause-related marketing that they sustain needs to be assessed as marketing and not as philanthropy.

Likewise, another concept that cuts across these segments is the apprehension with looking beyond the financial accountability to the shareholders and mulling over the relationship of the company with several stakeholders, inclusive of the employees, local communities, media, customers along with the government (Blowfield & Murray 2014). The stakeholder theory takes into account the extent of corporate responsibility in emphasizing the significance of satisfying the multiple stakeholders group. Scholars who have been working along this vein have been insisting on the needs of the corporation for assuming the responsibility for all the varied constituents and being committed towards society’s well-being. However, not all the scholars are sold on this substance. Some have been content with the fact that despite its connection with corporate philanthropy and social responsibility, in reality, the stakeholder theory offers little regulation to the decisions of CSR beyond the maximization of the shareholders; however, it has no recommendation for ways of balancing the competing liabilities (Cheng et al., 2016). According to Drucker, for converting its social responsibilities into responsibilities of the business, corporations need to seek to roll a social issue into economic prospect along with the economic benefit into the capacity of productivity and well-paid jobs.

Declined Corporate Philanthropic Activities of USA Corporations

Even Friedman and Heinle  (2016), despite being critiques of the doctrine of social responsibility as being harmful to the society that is free, admitted the fact that companies need to invest resources within the local community for attracting better employees (Friedman & Heinle, 2016).  Institutional pressures generally play a significant role with the corporate executives finding themselves progressively more under the hammer from several stakeholders like the activists, governments, media consumers and certain other corporations.

Institutional pressures play a significant factor in the story and debate of corporate social responsibility and corporate philanthropy. Moreover, Muller et al. (2014) opined that the corporate executives face extreme pressure from the stakeholders like government, non-government monitoring, activists, media, consumers and other corporate organizations towards assessing their social impact through their philanthropic practices. However, such views reflect on simultaneous attention to organizations’ economic, legal, ethical and philanthropic activities. On the other hand, Marquis and Tilcsik (2016) opined that corporate philanthropy is only concerned with the discretionary activities and corporate giving for the overall development of the society. Moreover, this responsibility is concerned with distributing cash or kind to the society for solving social problems and leading society development. Financial performance remain non negotiable for growth and survival of corporate organizations. In this way, the professional have decided to insist CSR activities including corporate giving as the most essential part for aligning with core competencies of the organizations. In this way, the corporate organizations can make sustainable and efficient contributions to the society and simultaneously fulfill the economic objectives. Apart from that, while CSR activities are assessed as the competitive advantage factor, it is more emphasized as the marketing of the corporate organization and not as the corporate philanthropy through just corporate giving (Friedman & Heinle 2016).

a. Employee Matching Gifts

Matching gifts are stated to be an easy thing to acquire, though it has been a shame that most of the non-profits do not seek them.  A program of matching gift is an outline of corporate giving that has been letting the employees decide on the ways their employer facilitates funds related to corporate philanthropic (Jones et al., 2014).  With such kind of programs, an employer will be able to match the donation of the employees to the suitable organizations.

An employer always matches the contributed amounts of the employees to the eligible organization for making effective charitable donations to the society. Over 65% of Fortune 500 companies match the donations made by the employees for getting lot of money available for the charitable donations (Masulis & Reza, 2014). However, Sz?cs et al. (2016) opined that the awareness among the employees of many organizations is quite low leading to the issue of corporate philanthropy. IBM provides 1:1 cash matches for the employees towards donating in the society (Jones et al., 2014). Apart from that, Coca Cola makes triple of the donations made by the employees towards effective development of the society.

Effect of Decline in Corporate Philanthropic Activities on Non-Profit Organizations

Employers are in the habit of rewarding their employees for their part of volunteerism via the volunteer grants.  It is also known as the dollars for doers; these programs of corporate philanthropy let the associations donate to the organizations where the employees volunteer time. Companies generally distribute a specified amount of funding based on the amount of hours that that employees spend on volunteering.

With volunteer grants, the corporate organizations can get benefits of active and engaged volunteers and security of funding towards effective corporate philanthropic activities. In this program, the corporate organizations provide monetary donations to the eligible non profits as the way of recognizing the employees, who volunteer the philanthropic activities. As per Masulis and Reza (2014), employee volunteer programs can be performed through two types of volunteering namely team volunteering and individual volunteering. In team volunteering, corporate organizations make charitable donations to the non-profits, where the employees volunteer as a team. On the other hand, in individual volunteering, the individual employees earn money for donating to the non-profits after meeting some volunteering thresholds.

Challenge grants are stated to be a challenge constituent. For receiving of a challenge grant, a non-profit organization needs to grant making party for earning the funds upon achievement of a formerly precise task (Cheng, Lin & Wong, 2016). In practical sense, this signifies the fact that organizations need to agree in reaching certain goals for raising of funds within a certain specified amount before it is being received as it has been promised but most of the businesses analyze challenge grants as ways of encouraging the non-profits in going out and raising the extra funds for going along with the contribution of the corporation.

According to Qian et al. (2015), challenge grants are the funds disbursed usually by the foundations to the nonprofit organizations based on their completion of challenging requirements. The challenge indicates the actions or results, which must be met by the nonprofits before getting the money. It can also involve some substantial efforts for ensuring that the recipients are actually helping themselves through their own sacrifice and hard work. On the other hand, Hadani and Coombes (2015) opined that challenge grants always suppress the potentiality of the non-profits towards getting donations from the corporate organizations. Moreover, they must have to list their predetermined list requirements for getting the donations from the corporate organizations.

Automatic Payroll Deductions can be an effective ways of fundraising bonuses, if it is set up properly. However, at times it appears to be difficult than some other options to keep it secure (El Ghoul, Guedhami & Kim, 2017).  There are various business organizations who offer their workforces to donate a specified or already set amount of their salary as a form of charity.  In most cases, these types of deductions are automatic and thus the employees and the non-profit organizations would not have to think regarding the procedure.  It can be said that if the management of the business organizations encourage the workforce or the donors to spend a small parentage of their salary for charity, it can significantly increase the efforts of the organization to raise funds.  To find out, the business corporations can check the deductions in payrolls as an effective screening of the loyal depositor or donors and continuously updating the information of the employees (Jones, Willness,&Madey, 2014).  The key would be to find out how many organizations are there that have a workforce who support such initiatives and do those organizations have such deduction system. This might be a good option to initiate such activities as some business organizations can make a list of the employees who are willing to participate in such programs.

Debates around Corporate Social Responsibility and Corporate Philanthropic Activities of Corporate Organizations

Payroll deduction plans can offer the employees an effective and convenient way of contributing their income towards an ongoing investment and expense for charitable donations. According to Cuypers et al. (2015), in payroll deduction plan, the employees permit their corporate organizations towards deducting a certain percentage of their salary towards contributing to the social security of the society. Through enrolling to the Automatic Payroll Deduction (APD), the employees can authorize the System Payroll Office towards deducting a portion of their money from their weekly or monthly pay checks.  In this way, the employees can automatically donate their money towards the overall development of the society.

It is widely accepted that the participatory medals that the employees or the business organizations receive for initiating and carrying out such charitable programs are one of the most important and exciting awards to receive.  Though it can be said that there is such a trophy or award named fundraising match and this can boost the mentality of the individuals to take part in such programs.  The majority of business organizations carry out fundraising matches in two possible ways.  According to Bereskin, Campbell and Hsu (2016), some of the organizations offer a grant amount for each activity of the employees in such programs. On the other hand, other business organization’s managements sometimes donate equal or greater value of on fund raised by the workforce of that particular company.

In today’s world, almost 5% of the United States based money as charity comes from the business corporations. Such business organizations have the needed resources and financial stability to help the organizations (Grant, 2016). There are some business organizations who arrange specific programs to make a significant difference nationally, locally and globally and such behaviors project their wish to help the society (El Ghoul, Guedhami& Kim, 2017). If an individual considers his or her organization to become focused on growth, they should utilize all the necessary tools to raise more funds where the initiatives regarding corporate philanthropy in involved. The non-profit organizations need to grab the opportunities that this big business corporations provide in order to increase the amount of 5%.

Fund raising programs are actually the processes involved in gathering voluntary contributions of money and even other resources through requesting the individuals, businesses and Government agencies. Liket and Simaens (2015) pointed out that the corporations can also arrange the fund raising programs for gathering adequate donations to contributing in the societal development programs. Furthermore, the corporate organizations must have to be efficient enough towards promoting the fund raising programs among the employees, who actually support the corporate philanthropic activities. It can make double the monetary donations made by the employees to the non-profits. It can also be the best practice of informing the donors towards donation money for charitable purpose.

Scope of Literature Reviews in Enhancing the Quality of the Research and Providing Secondary Information

Carrols CSR Model

Carrols CSR model incorporates the conducts of business activities in an organization that leads to sustainable businesses over long period of time. Corporate philanthropy is the most essential part of this model. As per this model, social responsibility and legal obedience are the prime duties for the corporate organizations towards leading long term profitable business. The followings are responsibilities of the corporate organizations towards leading social responsible businesses:

Economic Responsibility

Economic responsibility is the most significant responsibility of the organizations, where the corporate organizations have to perform in a consistent manner towards maximizing the overall profit level of businesses. Li et al. (2015) pointed out that economic responsibility ensures that the organization is responsible and profitable enough to provide adequate return on in investment to the shareholders within the stipulated time period. Hence, the corporate organizations must have to achieve high level of operational efficiencies and maintain strong competitive position. It is extremely important for the organizations to be consistently profitable for ensuring proper economic responsibilities.

Legal Responsibility

Legal responsibilities of corporate organizations require them to operate their businesses as per the laws of Government and rules of business. As per Iatridis (2015), legal responsibility ensures that the corporate organizations comply with various national and supra-national laws and regulations. Moreover, as per this responsibility, the corporate organizations should offer products and services, which meet at least some legal requirements framed by government. On the other hand, Tan and Tang (2016) opined that compliance with all the legal requirements help the business organizations towards avoiding any kind of legal complication associated with businesses. In this way, the corporate business organizations can become law abiding corporate citizens and establish respectful image in the society.

Ethical Responsibility

Ethical responsibilities are associated with the responsibilities for which the corporate organizations have to act morally and ethically. Moreover, Lee et al. (2014) stated that ethical responsibilities are beyond the legal responsibilities, where the businesses organizations have to be operated as per the social and ethical norms. Good corporate citizenship is always expected to be morally and ethically responsible. In this way, the corporate organizations will be responsible enough for showing enough responsibility to the society through maintaining all the social and ethical norms.

Philanthropic Responsibility

Philanthropic responsibilities remain at the top of this pyramid model. According to Valor and Zasuwa (2017), corporate philanthropic activities focus more on luxurious activities, where the corporate organizations have to be inclined towards improving the quality of life of the citizens, local communities and ultimately overall society. Corporate philanthropy is the act of giving back to the society for the overall good of the society. On the other hand, Raub (2017) opined that corporate responsibility is highly discretionary, but it is actually highly significant for the overall sustainability of the corporate organizations. This responsibility is actually related to the activities like charitable donations, time and staffs on projects, kinds and others. The prime purpose of the corporate philanthropy activities of the corporate organizations is actually intended towards overall development and advancement of the community surrounding them.

Corporate Philanthropy: Factors Constructing it

Figure 1: Carroll’s CSR Model Related to Corporate Philanthropy

(Source: Tonin & Vlassopoulos 2014)

According to the priorities, liabilities and responsibilities of the corporate social responsibility initiatives, Ackerman has proposed an effective model related to the social responsibilities associated with the corporate organizations. Ackerman suggested three phases of CSR initiatives as per the priorities of those initiatives. This model of CSR activity is much more concentrated on guiding the implementation of CSR initiatives rather than the formulation of the CSR initiatives. Proper prioritization of the CSR initiatives can facilitate the corporate organizations towards implementing the most important initiatives on priority basis. In this way, such prioritization can result in high level of success for the initiatives associated with corporate philanthropic activities.

The first phase of this model is associated with recognition of social problems by the top managers of the corporate organizations. Tonin and Vlassopoulos (2014) pointed out that proper identification of social problems can help the top managers to direct their CSR initiatives and formulate right CSR initiatives related to the actual and accurate social problems. The second phase of the CSR initiatives are associated with intensive study of the recognized social problems and hiring special expert for finding effective solutions in mitigating the social problems. Moreover, Du et al. (2016) opined that the intensive study of the social problem helps in better recognizing the facts linked with the problem and thereby help the experts in providing best solution. The last phase of the model is linked with actual implementation the proposed solution to meet the recognized social issues.

Unlike the Carroll’s CSR model, Intersecting Circles Model of CSR refutes to prioritize the CSR activities based on hierarchical structure. Moreover, this model related to corporate philanthropy is actually intended towards proper integration among the three aspects namely economic, legal and moral responsibilities. This model has proposed that while considering the CSR activities, none of the CSR initiatives are more important than others.

According to Jia and Zhang (2014), Intersecting Circles Model rejects the fact that economic responsibility should get priority over the others. Moreover, as per this model, based on the law of business, although the businesses are initiated for profit making, still it is actually a social creation and the corporate organization must get the support of society for their long term survival. The corporate business organizations can survive and thrive in the market for longer period only through getting the social support from the community surrounding them. Hence, the corporate business organizations can only get such support from the society through fulfilling the social responsibilities and obligations. On the other hand, Chen and Huang (2016) opined that social control of the corporate business organization is actually intended towards protecting and enhancing the public welfare as well as private interest associated with the businesses. As per this model, the corporate business organizations must be concerned about proper integration among the all three responsibilities like economic, legal and moral responsibility. In this way, this model seems to be descriptive in nature, but not normative in nature. This model is advantageous enough for its flexibility of interpreting it as per the necessity of business organizations. 

Charitable Contributions of Corporations in USA

Figure 2: Intersecting Circles Model of CSR

(Source: Bereskin et al., 2016)

Over the years, extensive researches have been conducted on the association between corporate philanthropy and financial performance of the organizations. Most of the scholars have stated that corporate philanthropy is positively associated with the financial performance of the organizations because of the positive reputation and image of the organizations in the market through charitable donations. In many societies, Governments are in favor of corporate philanthropy activities, as it reduced the burden of government towards social development. In such extent, the corporate organizations often the support and funding of Government that can have major impact on the financial performance of the organization. On the other hand, Cha and Abebe (2016) opined that corporate organizations can build positive image in the market and build positive relationship with the stakeholders of the organizations. Hence, the primary shareholders become highly unwilling to invest in such socially responsible corporate organizations. In this way, corporate philanthropic activities are directly associated with their financial performance making the financial performance sound enough for the organizations.

Charitable initiatives can assist the corporate organizations towards gaining political legitimacy. It can help the organizations to gain highly valuable political resources, which can be highly critical for them towards long term financial success and survival. Tonina and Vlassopoulos (2014) pointed out that corporate philanthropic activities also help in establishing positive perception in the mind of the customers regarding the particular organizations responsible for the society. In this way, the customers become highly loyal to such organizations and become more likely to repeat their purchase over time. In this way, the overall sales volume of the organization is increased with the repeated purchase rate of the customers, which ultimately increases their financial performance level. Apart from that, strategically executed corporate philanthropy is also enhance the effectiveness of word-of-mouth for the organization that reduce the overall advertising cost, which can indirectly contribute to the financial performance level.

The conglomerates actually represent the business organizations that are engaged in various businesses.  It is widely accepted that these organizations are multi-industry organizations.  In short, it can be said that the assets of the conglomerate are used to venture in various types of businesses that have no connection with each other (Grant, 2016).  The fundamental concept of conglomerate is to supply adequate income from all types of businesses that can secure the operations of the newly started businesses.  The idea of multi-industrial business organizations is not relatively new as in the year of 1960 these types of initiatives became popular.  According to Bereskin, Campbell and Hsu (2016), the advantages of doing conglomerate business are naturally long term and at times it may be important to redefine the strategy of business utilizing new technologies.  In some specific situations, the conglomerate organizations have the possibility of survival in the traditional market until an opportunity emerges for the presence in the developed markets (Blowfield and Murray 2014). It is a matter of fact that the conglomerate organizations are multi-industry companies that have diversified operations and are generally owned by the investors and the founder member. These organizations receive huge support from the government and are enriched by using the network organizations under their conglomerate and enjoy easy access to the knowledge and the market of capitol.  In this regard, it can be said that Arcelik is a major Turkish manufacturing business organization that manufactures household appliances and they are under a major conglomerate KOC group operating in Turkey.  This organization is a publicly owned organization and they have the right to issue or sell bonds and shares of the organization in the stock market (Robertson & Upton, 2017).  Usually the securities of the business organization which are traded are certainly the property of the various investors.  

Historical Background of Corporate Philanthropy

The prime advantage that the corporate business organizations gain from their corporate philanthropic activities is support or community and its surrounding market. Moreover, in corporate philanthropy, the corporate business organizations benefits the community with the earnings earned from the same community. In this way, the organizations gain increasing prospects of future revenue flow. Moreover, Bereskin et al. (2016) opined that corporate business organizations most establish positive image in the community through their corporate giving and social responsibilities. In this way, the existing customers become highly loyal to such organization. Furthermore, such loyal customers become highly willing to repeat their purchase from the socially responsible business organization. In this way, the sales and profit volumes of the socially responsible organizations are increasing to larger extent leading with sound financial performance.

On the other hand, Cuypers et al. (2015) opined that corporate philanthropy can facilitate the corporate business organizations towards improving the market reputation and market development. Moreover, the corporate giving practices lead to high level of goodwill for the corporate organizations leading to increasing corporate image in the market. On the other hand, Masulis and Reza (2014) stated that corporate business organization can generate increasing consumers’ interest for the products and services and lead to favorable opinions for the organizations. In this way, the corporate philanthropic activities lead to increasing willingness of the consumers towards purchasing the products and services of a particular company. Furthermore, Qian et al. (2015) stated that favorable opinions of the consumers regarding the socially responsible organizations lead to their effective advertising. Moreover, the community people and consumers satisfied with the corporate giving initiatives of the organizations are more likely to recommend these organizations to the other people. Hence, such organizations do not have to invest much on creating more numbers of advertisements, as those organizations are already popular to the customers through increasing word-of-mouth. In this way, corporate organizations can reduce their advertising expenses leading to reduction of overall business cost.

As per the previous researchers, customers are more likely purchase from the organizations, which support the serious social issues and the charities that they feel high valuable for overall social development. According to Masulis and Reza (2014), corporate philanthropic activities differentiate the corporate business organizations from the other rivals in the market. Moreover, it leads to increasing corporate image and unique value in the market resulting in high level of competitive advantages.

On the other hand, Hadani and Coombes (2015) opined that philanthropic activities build greater opportunities for the organizations to lead innovative business solution. Moreover, the corporate business organizations can gain access to innovative business ideas, highly talented technical expertise and valuable researches through partnering with different types of foundations, non-profits and universities. In this way, such socially responsible business organizations can lead to innovative and unique business solution that can have huge contribution in the level of competitive edge for the organizations. However, Zunz (2014) pointed out that corporate philanthropic activities may divert the corporate organizations towards different direction from its main direction. In this way, the organizations may not be able to concentrate on their core business purpose. Furthermore, the philanthropic activities that are purely related to money can lead increasing business cost.

Criticism against Corporate Philanthropy

The unrelated diversification of the business organizations is considered in accordance with the destruction of values in the developed markets along with the conventional way of thought process.  According to Benn, Dunphy and Griffiths (2014), it can be said that the similar strategy has been used for years and has produced effective results in the markets that are emerging.  According to Blowfield and Murray (2014), in the markets that are emerging with the presence of institutional void, the conglomerate organizations can definitely take the advantage of the market imperfections.  Thus, the diversification of the process can be looked at as a good strategy to take up in the market that is emerging.  This strategy is linked with various issues that are mentioned below;

• What are the institutional factors that can positively influence the growth of the conglomerate in the market that is emerging?
• Possible alternative strategic response of adjustment of the conglomerates that have highly diversified business ventures as a response to the institutional changes.
• Recommendations for the top managers and the shareholders of the organizations.
• The extent to which the institutional context changes because of the economic reforms in the nations with emerging market and is higher level of diversification in those situation are sustainable?

In this regard, it can be said that the concentration of the power is restrained to a few companies that have experienced reduced market development institutions in the nations that are developing.  According to Bereskin, Campbell and Hsu (2016) this facilitated some more benefits to the conglomerate organizations with efficient investments in order to strengthen the internal capacity that can get replaced with the market failures (Robertson & Upton, 2017).  The conglomerates hailing from the emerging markets have identified the changes which are important to change the scope of the diversification if they want to adapt that. For this the managements of those conglomerates can apply three strategies and those are;

• To focus on the narrow portfolio of the organizations that has international or regional potential.
• Accumulating large portfolio for businesses that are home related.
• Building a portfolio of the conglomerates operating in countries that are developing.

As per The Boston Consulting Group, the conglomerates also use five more strategies and those are mentioned in this section of the literature review;

For an example, it can be said that Hisense is a Chinese company that owns 15% share in the television industry in the domestic market.  The business organization has modified the strategy and concentrated on the world market with a range of consumer products such as computers, tools used for telecommunication and air conditioners (Jones, Willness&Madey, 2014).  There are manufacturing units in the market of South Africa, Hungary, Iran and Algeria. The domestic market of China allows the organization to manufacture in cheaper price and provides additional advantages like R&D centers and designs. 

This strategy basically is redirecting to the local engineering skills.  As an example, it can be said that a renowned Brazilian organization Embraer is backed up by the government of Brazil and eventually became the largest manufacturer of aircrafts in the world replacing a Canadian company Bombardier (Grant, 2016).  Embraer utilized the local skills of producing aircrafts and manufactured a jet plane.  The subsequent merger with a Chinese organization China Aviation Industry Corporation II took place with vision of transforming the Brazilian organization into a global brand and to become largest exporter world-wide.

Advancements in Corporate Philanthropy

To explain this strategy, examples of two business organizations that have been successfully using this strategy is mentioned in this section.  BYD is a reputed organization that produces batteries and the company has a production that is labor-intensive relative to the organizations operating in the Japanese market and utilizes the lower labor costs.  On the other hand, Johnson Electric is another business organization that produces electric motors for small products like camera or some specific parts of a car (El Ghoul, Guedhami& Kim, 2017).  For an example, in a BMW car, there are almost 100 small engines whose capacity is lesser than mere 1 horsepower.  These motors are generally used in the sunroof, adjusting the seats or the window shield and in many other purposes. In this way the management of this organization has been able to monopolize the business of manufacturing small motors in the market of United States.

If the business organizations get inclined towards using natural resources as first class marketing and at home. In this regard, it can be said that a renowned Brazilian organization Sadia and Perdigao have erected numerous sales offices across the world in order to sell necessary raw materials to run pork and poultry industry.

This strategy is all about applying a model of business that can work in various markets. As an example, it can be said that Cemex is a successful Mexican business organization who is currently the largest producer of concrete cement world-wide. The industry of cement and other building materials is often looked at as territorial producers.  This means that the manufactured goods are difficult to transport at the areas that are remote. According to Blowfield and Murray (2014), the management of the organization understood the fact that investment and know-how can go without an issue in the direction of any market when the transportation of the products would not permit that. In recent years the organization CEMEX has bought various organizations and has built necessary facilities in the market of Thailand, Colombia, USA and in many other countries.  The secret underneath the success of this business organization is their unique style of managing the acquisition that is widely known as ‘Cemex Way’ (Robertson & Upton, 2017).

In the developed nations, the global business organizations enjoy a benefit compared to the companies that are operating in the markets of the developing nations.  Institutional infrastructure is the primary benefit that these organizations receive in the developed nations, and apart from that, these organizations have a better approach towards the finance market while acquiring funding sources that are cheaper.  According to Bereskin, Campbell and Hsu (2016), these organizations use superior technologies.  The conglomerates in the developing nations do not have these opportunities and because of numerous reasons these organizations neutralize specific shortcomings and understand the advantages in accordance with the global organization (El Ghoul, Guedhami& Kim, 2017).  The conglomerates have a benefit in their domestic markets as in that way the managements can manage to continue the operations while dealing with the lack of necessary infrastructure, legislative gaps and many other issues.

Emerging markets can be associated with high growth potential and represent both prospective risks and opportunities for the western countries. The market potentiality of the emerging markets is changing gradually. In such situation, the conglomerate business organizations can gain high level of profitable business opportunities with the growing economic conditions of the developing nations. According to Marquis and Tilcsik (2016), the conglomerate business organizations can also avail high talented, educated and skilled at lower cost in the emerging countries as compared with the developed countries. In this way, the conglomerate business organizations can reduce the overall business cost of the business operation in emerging countries that leads to competitive nature for the organizations. On the other hand, Sz?cs et al. (2016) opined that with the development in the economic conditions of the emerging nations, the earnings of the consumers of those countries are also increasing gradually. In this way, the conglomerate business organizations can avail wide access to the consumers, who have enough affordability of purchasing the products and services. Furthermore, the lifestyles of the consumers in the developing nations are also changing with the development in their earnings. Hence, they are now highly attracted towards purchasing the products and services of the conglomerates leading to greater business scope of these companies. In this way, the emerging or developing nations are gradually becoming the profitable markets of the conglomerate business organizations.

Over the past 30 years, corporate contributions to charities in USA have fallen drastically. There is year on year variability in the measures of corporate giving of the U.S corporate organizations. However, drastic evidence can be found between the years 2016 to 2017, where the corporate philanthropic activities of the USA corporate organizations have been fallen by 14.5%. Moreover, Liket and Simaens (2015) opined that most corporate organization of USA are realizing that contribution percentages in corporate philanthropy are actually leading to rise in periods of poor corporate earnings. The long term curves for the organization are consistently down.

Over the past 10 years, the corporate organizations have faced violent economic cycles through various ups and downs, where the corporate contribution led to drop of pretax earnings by half. On the other hand, Iatridis (2015) opined that not every corporate organization think that they should contribute high volume of money in corporate giving. Such organizations are giving unwilling to investment huge amount of money to the charities because of their potential decrease in profit volume. In this extent, Apple Inc. has been seen as being notoriously abstinence from the corporate philanthropy. Moreover, this organization has started to restrict its corporate philanthropic activities contributing to overall declination of USA charities.

The decline in corporate donations is roughly coincident with the extraordinary rise in the executive pay. Moreover, Liket and Simaens (2015) stated that the corporate organizations must have to pay extra money to the executives to making them involved in the corporate philanthropic activities. In this way, the overall compensation structures of the corporate organization get increased leading to overall increase in the business cost. Hence, most of the corporate organizations are being unwilling to being involved in corporate philanthropy.

While considering the evidence from Starbucks, the organization has lost $6 million in sales for its community development through the program of racial training in the society. In this way, the organization has realized that corporate philanthropic activities actually hamper the overall sales and profit volume (Hadani & Coombes, 2015). Hence, the organization has become less willing recently to spend much time and money in philanthropic activities. Furthermore, Masulis and Reza (2014) pointed out that the tone that the largest companies of America have set, is not generous enough in regards to corporate philanthropic activities. As per the research conducted on the charities of the USA, it has been found that largest companies of USA have given donations less than average and not even by small amounts.

The Fortune 100 companies have given charity some 40% less than the average expected charity. Exxon Mobil was one of the top companies in USA in 2017 with worldwide profit level of almost $45 billion. However, in this year, the organization contributed only $213 million in charitable donations. In this way, the overall contribution in USA charities from the corporate organizations has declined drastically. However, there are also some organizations, which have given significant amount in the charitable donations. Moreover, Wal-Mart has given away more than $1 billion donating $311 million in cash and $755 million in product, which is consisted of 4.5% of their total profit.

In the earlier discussion it has been found that most of the non-profit organizations are not getting adequate funds from the business organizations and the notion of corporate philanthropy is being ignored by most of the companies. The impact of such declining corporate philanthropy has resulted in sustainable challenges for the non-profit organizations. Since such organizations are completely dependent on the donations and charitable actions from profit organizations, hence once the flow of fund has started to get ceased, the non-profit organizations are facing challenges in managing their daily operation, starting from staff management to debt management.

According to the viewpoint of Li et al. (2015), due to the reduced corporate philanthropy, non-profit organizations are trying to cut their day to day cost of operation. They have also started to expand their fundraising efforts through some innovative campaigns. Moreover, such organizations are also utilizing their reserved funds in order to cover up shortfalls. On the other hand, Cuypers et al. (2015) highlighted that the non-profit organizations have started to announce staff cutbacks so that resource can be consumed at less rate. However, majority of such organizations are trying to reduce cost of operation through alternative ways other than staff cutoffs.

Iatridis (2015) pointed out that non-profit organizations are nowadays failing to achieve competitive edge because their sole purpose of serving the society is getting hampered. The companies are not getting enough fund and donations due to which at the time of serving society they are not able to justify their position. On the other hand, Li et al. (2015) pointed out that through the fund-raising campaigns the non-profit organizations are trying to collect capital, however the potential attendees from top corporate sectors are missing. This has resulted in setting back the corporate image on the society. Publicity has reduced a lot from the last decade and this has resulted extremely poor interest from the society as well in terms of fund accumulation.

While considering the viewpoint of Hadani and Coombes (2015), it can be said that non-profit organizations in the human service sector in USA at present comprises of 35.5%, however only top 7 companies are able to hold their success, which are United Way Worldwide, Task Force for Global Health, Feeding America, Salvation Army, YMCA of the USA, St. Jude Children’s Research Hospital, Food for the Poor and Boys & Girls Club of America. Only these non-profit organizations are financially strong enough as they receive donations from only top organizations such as IBM, Exxon Mobil and Chevron. Furthermore, Liket and Simaens (2015) pointed out that the non-profit organizations are failing to provide adequate support to the society at the time of natural calamities. They are not able to fight a social cause due to reduced amount of resource availability from business organizations. Finally, as a result such organizations are losing their scope of existence. Neither are they neither getting support from business sectors nor getting support from the entrepreneurs. These organizations are tremendously facing the challenges to cost cutting, staff management, resource management and infrastructure development.

There are few approaches and theories that tend to focus on the connections and interactions between the society and business along with the position and power of the business and their inherent responsibility.  These theories also involve both the political analysis and political considerations in the related corporation duty debate.  There may be a bunch of theories in this arena, but the two most significant theories are: Corporate Citizenship and Corporate Constitutionalism.

Many scholars have explored the role and responsibility of power which the business organizations have in the society and the major social impact of that power.  In this connection, a new element has been introduced that stated that the business organizations are social institutions and they should utilize their power in a responsible way.  In addition to that, it has also been noted that the reasons which generate the social power of these business organizations are not entirely internal of the organization; rather there are some external ones too.  According to Blowfield and Murray (2014), the focus is mostly unstable and it is observed to shift constantly from the economic forum to the political one and also vice versa.  This theory also attacks the hypothesis of the classic economic theory which prevents the involvement of the business organization within the society along with their wealth creation.  This theory also formulates two fundamental principles which states the management of the social power, those are: the iron law of responsibility and social power equation.  The former one refers to the harmful consequences of the absence of the power usage, whereas the latter one refers to the social role and responsibilities of the business organizations which comes from the entire amount of power they have within the society. 

According to Bereskin, Campbell and Hsu (2016), the social equation of power and responsibility needs to be understood through the fundamental practical role of the business organization and it rejects the essential free market ideologies which state that the businesses have no responsibility within the society (Robertson & Upton, 2017). Later, scholars have extended this theoretical approach and proposed the ‘Integrative Social Contract Theory’ for taking the social and cultural contexts into account along with integrating the normative and empirical aspects of the business management.

Corporate constitutionalism is the concept of development of the organizations as business as well as social entities, which keep balances between both public as well as private interests. The application of corporate philanthropy should be able to accommodate the interest of public, while there is a balance between public as private interest associated with the businesses. On the other hand, Raub (2017) opined that companies are usually controlled by the shareholders and not by every stakeholder. Hence, it is the prime responsibility of the corporate organizations towards making profits for leading adequate return of investments for the shareholders. In this way, the corporate business organizations are always liable to make balance between the public interest and private interests for their long term survival. On the other hand, Chen and Huang (2016) opined that corporate constitutionalism makes more emphasize on the principles towards achieving the legitimacy of the organizational decision making. In this way, the corporate business organizations should be highly concerned about the corporate giving for social development, but simultaneously they should be able to make enough profit for meeting the return on investments of the shareholders for long term survival. In this way, corporate constitutionalism builds the base of effective CSR initiatives in the corporate organizations.

This is comparatively a new idea among the scholars even though the concept of the business organization as a part of the society is not new.  The scholars have stated that there are few factors which have a certain impact of the relationship between society and business (Cheng, Lin & Wong, 2016).  Amongst those factors, the globalization and crisis of state welfare are significant.  Both these factors along with the reducing cost due to the technological advancements and deregulation procedure have stated that the larger conglomerates have greater social and economic power than the government organizations.  According to Blowfield and Murray (2014), this theory has been introduced into the society and business relationship based on the social contract theory.  It has also extended the concern for the closer community to the global one.  To sum up, it can be said that this theory is mostly focused on the responsibilities, rights and the potential partnership of the society and business.

Corporate Citizenship is always associated with the social responsibility of the businesses. It also demonstrates the extent to which the corporate organizations are capable of meeting the legal, ethical and economic responsibilities. Moreover, the prime purpose of the corporate citizenship is to produce high standard of living and quality of life of the communities surrounding the corporate organization. At the same time, the corporate organizations must also be to maintain the profitability of the stakeholders. Furthermore, Jia and Zhang (2014) opined that corporate citizenship also ensures that they treat their stakeholders ethically and with adequate respects, where the organizations demonstrate great commitment to the ethical behaviors through balancing the needs of the stakeholders and environment. Apart from that, Bereskin et al. (2016) opined that corporate citizenship leads to improved customer relations through treating the customers ethically and listening properly to the needs, wants and other feedbacks. Corporate citizenship leads to enhanced marketing, as the customers are highly receptive to the ethical companies and their associated products and services. Furthermore, the demand of socially responsible organization is generally continued to grow with encouraging the shareholders, consumers and employees. Hence, successful corporate business organizations have strong belief on the power of corporate citizenship towards leading long term profitable business condition.

Several factors contribute to incorporate the social values and social demands in the business activities.  One major question that stays at the heart of this issue is whether the unambiguous social missions are necessary for creating the social value and whether the businesses can equally and simultaneously pursue economic and social goals through this policy.  As argued by Foss and Klein (2018), the value created by for-profit companies was essential to pro-social behavior (Foss & Klein, 2018).

According to Benn, Dunphy and Griffiths (2014), there are several large conglomerates all over the world that put stress on the private businesses playing important role in progressing with the social agendas.  On the other hand, according to Calabrese et al. (2013), there are other literatures that indicate that even though the commercial organizations can have the transformative influence on the society, incorporating the social values along with the social demands is more commonly seen in the social organizations than the commercial ones.  This implies that the businesses that are emphasizing on the social values in place of their material gains are facing some degree of conflict of interest between the social and commercial dimensions of their business activities. 

According to Benn, Dunphy and Griffiths (2014), however, it is necessary for the large business organizations to craft their business model in a way that it reflects their values, morals along with addressing the environmental and social challenges.  There may be several factors and motivations within the organization that contribute to incorporate the social values and demands in the business strategy but bringing a definite structure and discipline to these fragments is necessary.  Funding the community service enterprises or the non-profit organizations directly may indicate the environmental or social priorities of the businesses.  There may be different priorities of every company on the basis of its core values.  As stated by Calabrese et al. (2013), it may be challenging for the businesses to make these funding activities a part of its business strategy, but these can provide a degree of insulation from any kind of unanticipated risks along with enhancing the reputation of the organization.  However, it should be noted that, in terms of larger conglomerates incorporating the social values and demands can be an extension of their business interest as well. 

According to Calabrese et al. (2013), the businesses can also increase their profitability and opportunities while creating environmental and social benefits and improving the functioning efficiency throughout the existing value chain.  Most US corporations tend to identify the business value of innovation of the new technology solutions which may also reduce the existing operational costs and mitigate the social impacts (Robertson & Upton, 2017).  However, the businesses should prioritize finding a definite solution of any kind of social issue as it may lead them to lesser financial return on the long run (Charity Navigator 2016).  The organizations need to make attempts for creating social values by addressing the significant social needs within its reach.  However, it may not give them immediate profits, but it can change the business model of any organization fundamentally and help developing new strategies and skills.

Besides being a profitable business entity, the corporate organizations are also the social entity. Hence, it becomes the responsibility for the corporate organizations towards looking into the matters of social issues surrounding them. Moreover, identification of proper social values can help the organizations towards assessing the actual social perspective associated with their businesses. Apart from that, the organizations can also gain the support of the community and social people through mitigating the social issues and improving the social values for community people. Such social support can help the organizations towards mitigating the complexities around the businesses. On the other hand, Jia and Zhang (2014) opined that the corporate entrepreneurs can operate their businesses with the intension of benefiting the society through being a social entrepreneur. Moreover, the corporate organizations can also build emotional bonding with the consumers and other community people through dealing with several humanitarian issues. In this way, the consumers become highly willing towards purchasing the products and services of these organizations repeatedly. Apart from that, mitigation of social issues towards leading high social values gives an impression of sound business profitability for the corporate organizations. Hence, the shareholders become highly willing to invest in such socially responsible corporate business organizations.

The ethical theories can be defined as the well thought, self-consistent and rational theoretical background for a wide range of problems (Bereskin, Campbell & Hsu, 2016).  There are mostly two fundamental theories that focus on the normative questions of the relationship between the society and business; those are: the ethics of rights and Utilitarianism.

This is an umbrella term for a set of theories.  In general, this theory proposes that the sense of morality tends to consist of much more than promoting the good.  There may be several wrong actions that can promote the all over goodness, at the same time; there are several righteous acts that do not really promote the good.  This theory indicates that the companies with the specific policies for the betterment of the society can flaunt the rights openly.  According to Benn, Dunphy and Griffiths (2014), however, a policy incorporated with social demands and values and well-informed by the ethics of rights will focus on the moral dignity and the rights of all the stakeholders who are somehow affected by the operational activities of the business.  This theory also emphasizes the respect for all the stakeholders in virtue of their stand as the right-bearers.

This theory indicates to the concept that the idea of morality is concerned with doing more good and stopping the bad as much as possible.  If said specifically, this theory says that the moral agents should make the most of the well-beings of the society.  There are few characteristics of this theory.  Firstly, as it is concerned with the entire well-beings of all the moral agents or the stakeholders and maximizing it, the wellbeing of the entire society should be taken into account.  According to Calabrese et al. (2013), secondly, this theory is also recognized to a demanding moral theory as it does not approve the idea that sometimes the stakeholders may have the options of acting in different ways which may not increase the entire wellbeing.  Thirdly, this theory also rejects the idea of including the constraints against the harmful activities such as discrimination or any forced labors.  This states that the harmful activities are only wrong morally when they are not maximizing the entire wellbeing.  Fourthly, the main focus on the consequences of the theory does not really distinguish between the harmful omissions and the harmful actions (Bereskin, Campbell & Hsu, 2016). 

Fifthly, this theory only focuses on the wellbeing and rarely focuses on the pragmatic implications such as bribery, child labor or discrimination.  This theory is applicable on the CSR practices of the organization as this would not recommend that the organizations should stop concerning the negative human rights. The utilitarian approach would primarily imply that the companies should take all the interest of the society into account not only the closely related communities.  According to Benn, Dunphy and Griffiths (2014), this will emphasize that everyone’s interest should be treated in an equal way which will eventually maximize the overall well-being.  However, it should also be noted that while promoting the wellbeing, this theory mostly involves reforming the existing practices.  The utilitarian approach may also demand that the organizations should focus more on the distant interests that they are doing currently.  

Virtue ethical theory is emphasized on the virtue of mind and character for assessing the rightness and wrongness of the business operation. The virtue defines the positive traits associated with the businesses person for doing good activities for the wellbeing of others. The corporate business people having the virtue like honesty and generosity are more likely to perform honest and good things for the well being of the community people. According to Cha and Abebe (2016), socially responsible business organization always associated with positive and honest mind for performing in favor of social development. In this way, the corporate organizations can establish positive perception in the mind of the community people. It ultimately helps the organizations in getting adequate community support for the business operations. On the other hand, Chen and Huang (2016) opined that the moral and intellectual virtue associated with the corporate organization direct them adhere with the moral and ethical principles for the betterment of the community good. Moreover, all these moral and ethical principle are actually intended towards improving the quality of the lives of the community people. It also facilitates the corporate business organizations towards avoiding the unethical and immoral business practices, which helps them to avoid any kind of legal risks.

While considering the viewpoint of Tan and Tang (2016), it can be said that strategic philanthropy can be strengthened by focusing on the CSR choices. The philanthropic notions must not be scattered but must be channelized in such a way through which brand image can be directly enhanced. Such initiative can be achieved through three ways, which are concentrating on CSR efforts, building deep understanding of the philanthropy benefits and finding the right partners. Therefore, by focusing on the most important social causes, an organization can start funding to the right non-profit business partner. In this way, the business will be able to limit its philanthropy activity and channelize the donations for most vital social cause.

Valor and Zasuwa (2017) pointed out that the rationale for strategic philanthropy is best actualized through building right business case. One organization needs to identify the long-term objectives and quantify those in terms of measurable factors. Based on the potential outcome and benefits, it needs to choose the right non-profit business partner through which it will be able to share its corporate value in the society. The organization needs to create a balance between revenue and charitable purposes so that both the society and business objectives are met.

According to the viewpoint of Raub (2017), strategic philanthropy might be thought as worthless initiative unless the exact partner and awareness procedure is selected. Supporting such social causes which are extremely important to the society will definitely attract media attention within short time period. For example, Audi is absorbing enough classiness by sponsoring art events through which local artists are able to establish their career. Moreover, Tonin and Vlassopoulos (2014) pointed out that through strategic philanthropy, an organization will be able to strengthen customer trustworthiness if it is able to create the public pledge to support a charity over a short time period.

Jia and Zhang (2014) highlighted a similar viewpoint to that of the earlier authors that by supporting the community through funding some campaigns raised by non-profit organizations will create an emotional touch with the target market, which will further help in customer loyalty. Such initiative acts as the short-term activity, which supports both community and funds non-profit organizations. On the other hand, Chen and Huang (2016) argued that the rationale for strategic philanthropy must be for long term. Consistency and determination are the two main factors that will definitely help in earning better corporate image in the society.

After considering all the above ways of strategic philanthropy, a final procedure must be followed by any business organization. The procedure will be composed of five steps Masulis and Reza (2014), which are:

• Communication: A robust CSR strategy has to be created by consulting with the lowest level employees and explaining them the importance of charity.
• Volunteers: Volunteering opportunities must be given to any skilled or general staff so that charitable purposes are achieved with the progress of time.
• Fundraise: Fund raising initiatives must be taken through campaigns so that the collected amount in support of social cause can be donated to non-profit organizations.
• Sustainable Purchasing: One of the most common and best ways to support corporate philanthropy is by having suppliers who support sustainable packaging.
• Accountability: The business leader must stand accountable for strengthening the philanthropic functions by holding periodic meetings and keeping the balance between revenue and community development.

Conclusion

To conclude, it can be said that the donations in charitable accounts by the conglomerates of United States have reduced by more than 13% in the last financial year (Robertson & Upton, 2017).  The latest tax laws are considered to be responsible for this.  The reduction in charitable donations can be influenced by the tax proposals to the taxes imposed on estates.  Nearly over 20 million US dollars under the Senate plan and not many individuals would have thought to give away parts of their estates to tackle a big bill of tax.  Under the new tax laws, the economists are predicting that if the conglomerates are unable to donate in each year, they will be able to donate in charitable funds once in a few years at least.  It has also been predicted that the fiscal quarter from the month of July to the end of October various new accounts were increased by 50% and various grants and contributions can increase up to 30% (Bereskin, Campbell & Hsu, 2016).  The CEO of national Philanthropic Trust that is one of the reputed donors advised funds have stated that there is a chance that in the coming financial year the situation will get improved and there will be a significant growth in the donations for charity by the conglomerates operating in United States.

References

Benn, S., Dunphy, D., & Griffiths, A. (2014). Organizational change for corporate sustainability. New York, NY:Routledge.

Bereskin, F. L., Campbell, T. L., & Hsu, P. H. (2016). Corporate philanthropy, research networks, and collaborative innovation. Financial Management, 45(1), 175-206. Retrieved fromhttps://hub.hku.hk/bitstream/10722/216346/1/Content.pdf

Berrone, P., Gelabert, L., Massa-Saluzzo, F., & Rousseau, H. E. (2016). Understanding community dynamics in the study of grand challenges: How nonprofits, institutional actors, and the community fabric interact to influence income inequality. Academy of Management Journal, 59, 1940-1964. Retrieved from https://journals.aom.org/doi/abs/10.5465/amj.2015.0746

Blowfield, M., & Murray, A. (2014). Corporate responsibility. Oxford, UK:Oxford University Press.  Retrieved from https://oxforduniversitypress.app.box.com/v/he-9780199678327

Brower, J., & Mahajan, V. (2013). Driven to be good: A stakeholder theory perspective on the drivers of corporate social performance. Journal of business ethics, 117, 313-331. doi:10.1007/s10551-012-1523-z

Calabrese, A., Costa, R., Menichini, T., Rosati, F., &Sanfelice, G. (2013). Turning corporate social responsibility?driven opportunities in competitive advantages: A two?dimensional model. Knowledge and Process Management, 20(1), 50-58.doi:10.1002/kpm.1401

Centers for Disease Control and Prevention. (2015). USA. Classification of diseases, functioning, and disability. Retrieved from https://www.cdc.gov/nchs/icd/icd10cm.htm

Cha, W., & Abebe, M. A. (2016). Board of directors and industry determinants of corporate philanthropy. Leadership & Organization Development Journal, 37(5), 672-688.

Charity Navigator (2016). Giving Statistics. Retrieved November 15, 2017 from https://www.charitynavigator.org/index.cfm?bay=content.view&cpid=42

Chen, Z., & Huang, Y. (2016). Cause-related marketing is not always less favorable than corporate philanthropy: The moderating role of self-construal. International Journal of Research in Marketing, 33(4), 868-880.

Cheng, S., Lin, K. Z., & Wong, W. (2016). Corporate social responsibility reporting and firm performance: evidence from China. Journal of Management & Governance, 20, 503-523. Retrieved from https://link.springer.com/article/10.1007/s10997-015-9309-1

Crane, A., & Matten, D. (2016). Business ethics: Managing corporate citizenship and sustainability in the age of globalization. Oxford UK  Oxford University Press.

Cuypers, I. R., Koh, P. S., & Wang, H. (2015). Sincerity in corporate philanthropy, stakeholder perceptions and firm value. Organization Science, 27(1), 173-188. doi:10.1287/orsc.2015.1030

Cuypers, I. R., Koh, P. S., & Wang, H. (2015). Sincerity in corporate philanthropy, stakeholder perceptions and firm value. Organization Science, 27(1), 173-188.

Du, X., Chang, Y., Zeng, Q., Du, Y., & Pei, H. (2016). Corporate environmental responsibility (CER) weakness, media coverage, and corporate philanthropy: Evidence from China. Asia Pacific Journal of Management, 33(2), 551-581.

El Ghoul, S., Guedhami, O., & Kim, Y. (2017). Country-level institutions, firm value, and the role of corporate social responsibility initiatives. Journal of International Business Studies, 48, 360-385. Retrieved fromhttps://www.fmaconferences.org/Venice/Papers/CSRpaper.pdf

Friedman, H. L., &Heinle, M. S. (2016). Taste, information, and asset prices: Implications for the valuation of CSR. Review of Accounting Studies, 21, 740-767. Retrieved from https://repository.upenn.edu/cgi/viewcontent.cgi?article=1119&context=accounting_papers

Gautier, A., & Pache, A. C. (2015). Research on corporate philanthropy: A review and assessment. Journal of Business Ethics, 126(3), 343-369.  Retrieved from https://econpapers.repec.org/article/kapjbuset/v_3a126_3ay_3a2015_3ai_3a3_3ap_3a343-369.htm

Gautier, A., & Pache, A. C. (2015). Research on corporate philanthropy: A review and assessment. Journal of Business Ethics, 126(3), 343-369.

Giving USA. (2017). Giving USA 2017: Total charitable donations rise to new high of $390.05 billion. Retrieved 15 November 2017, from https://givingusa.org/giving-usa-2017-total-charitable-donations-rise-to-new-high-of-390-05-billion/

Grant, R. M. (2016). Contemporary strategy analysis text only. Chennai, India:John Wiley & Sons.

Hadani, M., & Coombes, S. (2015). Complementary relationships between corporate philanthropy and corporate political activity: An exploratory study of political marketplace contingencies. Business & Society, 54, 859-881.  Retrieved fromhttps://journals.sagepub.com/doi/abs/10.1177/0007650312463691

Hadani, M., & Coombes, S. (2015). Complementary relationships between corporate philanthropy and corporate political activity: An exploratory study of political marketplace contingencies. Business & Society, 54(6), 859-881.

Hart, R. A. (2013). Children’s participation: The theory and practice of involving young citizens in community development and environmental care. New York, NY: Routledge.  Retrieved from https://books.google.com/books?hl=en&lr=&id=ncRSAQAAQBAJ&oi=fnd&pg=PP1&dq=Hart,+R.+A.+(2013).+Children%27s+participation:&ots=u5mykJ0kDx&sig=C3bohnF6XeAy6QBwrkX0f9gL3x4#v=onepage&q=Hart%2C%20R.%20A.%20(2013).%20Children’s%20participation%3A&f=false

Agency Problems of Corporate Philanthropy

Hungerford, T. L. (2016). We’re not broke: America’s real spending problem and how to fix it. Challenge, 59(4), 279-297. doi.org:10.1080/05775132.2016.1201391

Iatridis, G. E. (2015). Corporate philanthropy in the US stock market: Evidence on corporate governance, value relevance and earnings manipulation. International Review of Financial Analysis, 39, 113-126.

Jia, M., & Zhang, Z. (2014). Donating money to get money: The role of corporate philanthropy in stakeholder reactions to IPOs. Journal of Management Studies, 51(7), 1118-1152.

Jones, D. A., Willness, C. R., &Madey, S. (2014). Why are job seekers attracted by corporate social performance? Experimental and field tests of three signal-based mechanisms. Academy of Management Journal, 57(2), 383-404. doi:10.5465/amj.2011.0848

Lee, Y. K., Choi, J., Moon, B. Y., & Babin, B. J. (2014). Codes of ethics, corporate philanthropy, and employee responses. International Journal of Hospitality Management, 39, 97-106.

Lee, Y. K., Choi, J., Moon, B. Y., &Babin, B. J. (2014). Codes of ethics, corporate philanthropy, and employee responses. International Journal of Hospitality Management, 39, 97-106. doi:10.1016/j.ijhm.2014.02.005

Li, S., Song, X., & Wu, H. (2015). Political connection, ownership structure, and corporate philanthropy in China: A strategic-political perspective. Journal of Business Ethics, 129(2), 399-411.

Liket, K., & Simaens, A. (2015). Battling the devolution in the research on corporate philanthropy. Journal of Business Ethics, 126(2), 285-308.

Liket, K., &Simaens, A. (2015). Battling the devolution in the research on corporate philanthropy. Journal of Business Ethics, 126(2), 285-308. Retrieved fromhttps://econpapers.repec.org/article/kapjbuset/v_3a126_3ay_3a2015_3ai_3a2_3ap_3a285-308.htm

Liket, K., &Simaens, A. (2015). Battling the devolution in the research on corporate philanthropy. Journal of Business Ethics, 126(2), 285-308. doi:10.1007/s10551-013-1921-x

Marquis, C., & Tilcsik, A. (2016). Institutional Equivalence: How Industry and Community Peers Influence Corporate Philanthropy. Organization Science, 27(5), 1325-1341.

Masulis, R. W., & Reza, S. W. (2014). Agency problems of corporate philanthropy. The Review of Financial Studies, 28(2), 592-636. Retrieved fromhttps://corpgov.law.harvard.edu/2014/07/01/agency-problems-of-corporate-philanthropy/

Masulis, R. W., & Reza, S. W. (2014). Agency problems of corporate philanthropy. The Review of Financial Studies, 28(2), 592-636. Retrieved from

Masulis, R. W., & Reza, S. W. (2014). Agency problems of corporate philanthropy. The Review of Financial Studies, 28(2), 592-636.

Muller, A. R., Pfarrer, M. D., & Little, L. M. (2014). A theory of collective empathy in corporate philanthropy decisions. Academy of Management Review, 39(1), 1-21. doi:10.5465/amr.2012.0031

Muller, A. R., Pfarrer, M. D., & Little, L. M. (2014). A theory of collective empathy in corporate philanthropy decisions. Academy of Management Review, 39(1), 1-21.

Paarlberg, L.E. & Yoshioka, T., (2016). The impact of local economic structure on community philanthropy. Public Administration Review, 76(2),340-350. Retrieved from https://journals.sagepub.com/doi/abs/10.1177/0269094217707281

Paarlberg, L.E. & Yoshioka, T., (2016). The impact of local economic structure on community philanthropy. Public Administration Review, 76(2), 340-350.doi:10.1111/puar.12442

Phaholyothin, N. (2017). Moving Beyond Charity to Philanthropy? The Case of Charitable Giving in Thailand. Austrian Journal of South-East Asian Studies, 10(2), 185-203. Retrieved from https://aseas.univie.ac.at/index.php/aseas/article/viewFile/1811/1783

Phillips, R., & Pittman, R. (Eds.). (2014). An introduction to community development. Routledge.  Retrieved from  https://books.google.com/books?id=9QwhBQAAQBAJ&pg=PT80&dq=Phillips,+R.,+%26+Pittman,+R.+(Eds.).+(2014).+An+introduction+to+community+development.+Routledge.&hl=en&sa=X&ved=0ahUKEwiBk8CM__bYAhVvkeAKHVE3CccQ6AEIKTAA#v=onepage&q=Phillips%2C%20R.%2C%20%26%20Pittman%2C%20R.%20(Eds.).%20(2014).%20An%20introduction%20to%20community%20development.%20Routledge.&f=false

Porter, M. E., &Kramer, M. R. (2002). The competitive advantage of corporate philanthropy. Harvard Business Review, 2002(December). Retrieved 12 November 2017 from https://hbr.org/2002/12/the-competitive-advantage-of-corporate-philanthropy

Qian, C., Gao, X., & Tsang, A. (2015). Corporate philanthropy, ownership type, and financial transparency. Journal of Business Ethics, 130, 851-867. doi:10.1007/s10551-014-2109-8

Qian, C., Gao, X., & Tsang, A. (2015). Corporate philanthropy, ownership type, and financial transparency. Journal of Business Ethics, 130(4), 851-867.

Raub, S. (2017). When employees walk the company talk: The importance of employee involvement in corporate philanthropy. Human Resource Management, 56(5), 837-850.

Robertson, R. M., & Upton, S. (2017). The Role of Nonprofit, Nongovernmental Funding in Support of Biomedical Research. In Clinical and Translational Science (Second Edition) (pp. 707-717).doi:10.1016/B978-0-12-802101-9.00040-5

Salamon, L. M. (2015). The resilient sector revisited: the new challenge to nonprofit America. Washington DC.Brookings Institution Press.

Smith, J. A. (Ed.). (2015). Qualitative psychology: A practical guide to research methods. Sage.  Retrieved from https://books.google.com/books?hl=en&lr=&id=lv0aCAAAQBAJ&oi=fnd&pg=PP1&dq=Smith,+J.+A.+(Ed.).+(2015).+Qualitative+psychology:+A+practical+guide+to+research+methods.+Sage.&ots=eNGMdrgjUC&sig=nUPlSHF1P6q_WoFzJFaHmw38reQ#v=onepage&q&f=false

Sz?cs, I., Schlegelmilch, B. B., Rusch, T., & Shamma, H. M. (2016). Linking cause assessment, corporate philanthropy, and corporate reputation. Journal of the Academy of Marketing Science, 44(3), 376-396.

Sz?cs, I., Schlegelmilch, B. B., Rusch, T., &Shamma, H. M. (2016). Linking cause assessment, corporate philanthropy, and corporate reputation. Journal of the Academy of Marketing Science, 44(3), 376-396. doi:10.1007/s11747-014-0417-2

Tan, J., & Tang, Y. (2016). Donate money, but whose? An empirical study of ultimate control rights, agency problems, and corporate philanthropy in China. Journal of business ethics, 134(4), 593-610.

Tilcsik, A., & Marquis, C. (2013). Punctuated generosity: How mega-events and natural disasters affect corporate philanthropy in US communities. Administrative Science Quarterly, 58(1), 111-148. doi:10.1177/0001839213475800

Tonin, M., & Vlassopoulos, M. (2014). Corporate philanthropy and productivity: Evidence from an online real effort experiment. Management Science, 61(8), 1795-1811.

Valentinov, V., Hielscher, S., & Pies, I. (2015). Nonprofit organizations, institutional economics, and systems thinking. Economic Systems, 39(3), 491-501. Retrieved from https://www.researchgate.net/publication/277338333_Nonprofit_Organizations_Institutional_Economics_and_Systems_Thinking

Valor, C., & Zasuwa, G. (2017). Quality reporting of corporate philanthropy. Corporate Communications: An International Journal, 22(4), 486-506.

Wang, H., Tong, L., Takeuchi, R., & George, G. (2016). Corporate social responsibility: An overview and new research directions thematic issue on corporate social responsibility. Academy of Management Journal, 59(2), 534-544. doi.org/10.5465/amj.2016.5001

Zunz, O. (2014). Philanthropy in America: A history. Princeton NJ Princeton University Press.