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Imagining A New Philanthropy for the 21st Century

January 26, 2011

This past weekend, the Telegraph ran a piece by Sir Victor Blank entitled, “We Need a New Philanthropy for the 21st Century.” The article highlights the fundamental importance of  corporate engagement around today’s greatest social and environmental challenges – from both a business and moral perspective. It also articulates why a more innovative approach to philanthropy is needed moving forward – one that integrates social benefit and private value creation more directly, one that aligns public and private interests for true sustainability. It’s an approach embodied by IIC.

As Blank points out, fallout from the global financial crisis ensures that governments will be financially constrained  for years to come, and ill-equipped to fight global poverty, disease, and climate change while still tending to domestic challenges at home. Corporations, he argues, not only have a responsibility to come to the table and address these issues – they also have a vested financial interest in doing so.

Customers increasingly demand substantive  social leadership from the corporate sector. In addition, companies’ long-term strategic interests often align with those of their customers. Sir Blank writes, “The idea that there is a sharp divide between charity and commerce is false – the interests of a company and its customers are often synonymous.” Harvard Business Review recently sat down with Michael Porter to  further explore this concept that Sir Blank alludes to – that of “shared value.”

The conclusions drawn by Blake and Porter read as a glowing endorsement for the model and mission of IIC. Blake argues that corporations must expand their corporate giving beyond the current average rate of less than 1% of one fifth of annual profits ( that’s less than 1/5ooth of profits for those of you counting), in order to strategically support causes relevant to the firms’ commercial self-interest.  Porter concludes that in addition to strategic philanthropy, firms must find ways to integrate social responsibility directly into their business operations and thereby create shared value (see my discussion of IIC and hybrid value chains).

Investing In Communities allows firms to achieve both goals simultaneously. IIC enables firms to increase their corporate giving as a direct result of satisfying a standard operating need – real estate. Even better, firms don’t have to pay an additional penny out of pocket to generate that philanthropy. They simply make a savvy, socially responsible operating decision  and in return get to direct all the philanthropy generated by their IIC transactions, and receive recognition for it. For firms needing thousands of sq. ft. of office or commercial space, that figure could easily be tens of thousands of dollars per transaction. Not a bad deal, eh?

IIC proves that market power and public interest truly can align to generate incredible shared value. So we couldn’t agree with Sir Blake more. We do need a new philanthropy for the 21st Century, and here at IIC we’re not just imagining it. We’re creating it.

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