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Harvard Business Review | December 2002

Too many companies practice ineffective philanthropy through programs that are more focused on public relations than impact. Written in 2002, this article advocates for a shift to truly strategic corporate philanthropy, which improves the company’s competitive context and the community where it operates. 

Top Takeaways

  1. Corporations can and should use their charitable efforts to improve their competitive context—the quality of the business environment in the location or locations where they operate.
  2. For truly strategic philanthropy, corporations need to rethink both where they focus their philanthropy and how they go about their giving.
  3. Corporations can shift toward strategic philanthropy through 5 steps: Examine the competitive context in each of the company’s important geographic locations; review the existing philanthropic portfolio to see how it fits this new paradigm; assess existing and potential corporate giving initiatives against the 4 forms of value creation; seek opportunities for collective action within a cluster and with other partners; and rigorously track and evaluate results.
What passes for ‘strategic philanthropy’ today is almost never truly strategic, and often it isn’t even particularly effective as philanthropy.