Both are likely to be undertaken with the deliberate aim of improving the company's public profile and thus improving profitability : the green initiatives could possibly reduce costs or produce exciting new products with the potential for improved profits.
In some cases, charitable donations are effectively marketing spend: for example, the Oldies Club is currently running a 'photos of your pets' fundraising competition, and a number of companies have donated some of their products as prizes in return for a credit. Companies have also funded our presence at shows: thee decision is a strict commercial one: is this the right audience, and will it heighten our awareness with that audience?
Companies come in all sizes. A small company could easily decide to make a donation as a result of a decision by all the shareholders.
On the other hand, there are those people who ring up asking for a donation towards some totally unrelated charitable event where there is no obvious link between the company and the charity or object. I'm always surprised that these charitable events do as well as they do.
.. another reason would be staff motivation. People prefer to work for 'nice' companies, and one way to get them to think of their employer as one of the good guys is to have a charitable fund where they can help decide where the money goes.
Yeah, I'd also be a maybe to both. The directors should run the company for the benefit of the shareholders. If the charitable donations are good for the shareholders (and they would have to be better, after tax, than simply paying the shareholders greater dividends and letting them do what they want with the extra cash), then fair enough. This is likely to be the case only if all the shareholders hold the same views about which charities, if any, to donate to and there are positive PR benefits.
Good PR is almost certainly the only benefit of green initiatives, except where the initiative is also a cost saving measure (e.g. turn off the lights when you leave the office) or a way of saving money at the expense of employees. Devon County Council's offices in Exeter recently cut the wages of most central office staff by £500 a year, but rather than simply knock it off their base salary, they introduced a £2 a day charge for parking and called it a 'green initiative'. And you can't argue with that, cos it's for the future of the planet, innit?
I would add I suspect that many large charitable donations from large companies are a way for the directors to get someone else to pay for their charitable donations and get them that knighthood they've always wanted.
Good PR is almost certainly the only benefit of green initiatives, except where the initiative is also a cost saving measure
That's a bit harsh, surely? What about, for example, the current wave farm developments? I'm sure that the companies funding those are hoping to get a decent ROI, same as if they were funding some other new technology initiative that wasn't explicitly green. Likewise the various alternative car fuel projects.
Ah, but is that what he is talking about? I mean fair enough proper research and development, but I interpreted 'green initiatives' as the sort of bollocks that I mentioned.
Yes to both, for various reasons. All of which boil down to 'it's not shareholder's money (yet)'. A single donation can have multiple functions.
Some of it is simply part of the product. You are buying a cup of coffee with a donation attached. You could also buy a cup of coffee with ginger syrup. Or just buy a donation. Some of it is simply part of the marketing budget. This includes involving users/consumers and shareholders in choosing the 'charity of the year': it is part of building the bond between company/brand and the consumer. There is, of course, some overlap with the 'product' reason: the distinction I would make is that 'marketing' is not product-dependent: a company could stop sponsoring art, and start sponsoring healthy eating (for example). You can't buy an insurance policy 'with Art', or a policy 'with helping people learn to read'. Some of it is simply part of the Human Resources budget (e.g. paying for staff's volunteering time may be paying for them to get training/experience/an opportunity to experiment where if they foul up, bad things will not happen within the company; paying for staff time while everyone has an afternoon wearing silly clothes and matching the funds they generate is paying for a team-building exercise). And it helps people to think big and long term. Some of it close-to-home social and environmental engineering: pay for a youth club, reduce your grafitti-removal bill. Some of it is wider social engineering: pay towards a better world, and the world will be a better place to do business (what you pay for therefore depends on your business model as to what would constitute 'a better world to do business'.
In accounting terms, shareholders' funds equals the net assets of the company (that's the 'balance' between the top and bottom halves of the balance sheet), so actually it is...
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wellinghall) wrote2007-12-04 08:35 am
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Both are likely to be undertaken with the deliberate aim of improving the company's public profile and thus improving profitability : the green initiatives could possibly reduce costs or produce exciting new products with the potential for improved profits.
In some cases, charitable donations are effectively marketing spend: for example, the Oldies Club is currently running a 'photos of your pets' fundraising competition, and a number of companies have donated some of their products as prizes in return for a credit. Companies have also funded our presence at shows: thee decision is a strict commercial one: is this the right audience, and will it heighten our awareness with that audience?
Companies come in all sizes. A small company could easily decide to make a donation as a result of a decision by all the shareholders.
On the other hand, there are those people who ring up asking for a donation towards some totally unrelated charitable event where there is no obvious link between the company and the charity or object. I'm always surprised that these charitable events do as well as they do.
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Green initiatives can be profitable, so there wouldn't necessarily be the same conflict of interest.
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Good PR is almost certainly the only benefit of green initiatives, except where the initiative is also a cost saving measure (e.g. turn off the lights when you leave the office) or a way of saving money at the expense of employees. Devon County Council's offices in Exeter recently cut the wages of most central office staff by £500 a year, but rather than simply knock it off their base salary, they introduced a £2 a day charge for parking and called it a 'green initiative'. And you can't argue with that, cos it's for the future of the planet, innit?
I would add I suspect that many large charitable donations from large companies are a way for the directors to get someone else to pay for their charitable donations and get them that knighthood they've always wanted.
no subject
That's a bit harsh, surely? What about, for example, the current wave farm developments? I'm sure that the companies funding those are hoping to get a decent ROI, same as if they were funding some other new technology initiative that wasn't explicitly green. Likewise the various alternative car fuel projects.
no subject
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Some of it is simply part of the product. You are buying a cup of coffee with a donation attached. You could also buy a cup of coffee with ginger syrup. Or just buy a donation.
Some of it is simply part of the marketing budget. This includes involving users/consumers and shareholders in choosing the 'charity of the year': it is part of building the bond between company/brand and the consumer. There is, of course, some overlap with the 'product' reason: the distinction I would make is that 'marketing' is not product-dependent: a company could stop sponsoring art, and start sponsoring healthy eating (for example). You can't buy an insurance policy 'with Art', or a policy 'with helping people learn to read'.
Some of it is simply part of the Human Resources budget (e.g. paying for staff's volunteering time may be paying for them to get training/experience/an opportunity to experiment where if they foul up, bad things will not happen within the company; paying for staff time while everyone has an afternoon wearing silly clothes and matching the funds they generate is paying for a team-building exercise). And it helps people to think big and long term.
Some of it close-to-home social and environmental engineering: pay for a youth club, reduce your grafitti-removal bill. Some of it is wider social engineering: pay towards a better world, and the world will be a better place to do business (what you pay for therefore depends on your business model as to what would constitute 'a better world to do business'.
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In accounting terms, shareholders' funds equals the net assets of the company (that's the 'balance' between the top and bottom halves of the balance sheet), so actually it is...
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What I should have said 'dividend', not 'money'.
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