Socially Responsible: The Increasing Relevance of Philanthropy in Business

Business.com / Starting a Business / Last Modified: February 22, 2017

People buy brands, not products. Companies have a philanthropic obligation to their customers and their competition alike. Tips inside.

Consumer relations have come a long way over the past few decades. As tech and entrepreneurship become increasingly mainstream, expectations of companies have changed. People want more.

They’re generally justified in their mindset, too. After all, we live in a world in which the average consumer has virtually unlimited access to information, reviews, and alternatives.

It’s up to companies to offer a good product, but not just for the sake of market competition. They have a philanthropic obligation to their customers and their competition alike. 

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People Buy Brands, Not Products

With the rise of startup and small business culture, companies are selling more than a product; they’re selling a mindset.

They’re selling a brand, and that’s ultimately what people want to engage with. For example, everyone has a phone. There are variations, sure, but most smartphones ultimately perform the same functions.

They can call, text, order an Uber, check Facebook, post embarrassing #TBTs on Instagram and more.

Why do people pledge allegiance to specific phones, then? People line up in droves for the new iPhone every year. Others vehemently defend and embrace their Galaxy devices.

They perform the same general functions, but that doesn’t matter. They’re supporting a brand, not a product. 

It boils down to values and how relevant a product is to the consumer.“People want to align themselves with similar values that we have or strive to reach and maintain,” says Philip Tadros of Doejo.

“Transparency is key because for so long, we have been lied to. The collective conscious facilitated by the Internet helps us decide where we want to invest our time, resources, and energy. Life is short and filled with unknowns. The best we can do is good, but we need full transparency to decide.”

Make Philanthropy Part of Your Brand 

What exactly does this mean for philanthropy? The big takeaway from brand relevance is that people care about the image projected by a company.

They care about the values associated with that band. It’s ultimately why they’re supporting that company. The underlying importance of a brand lies in the passion of the company, and one massive component of that is the causes with which they align.

That’s right, taking a stand on different topics affects how people interact with your brand, and as such, whether or not they want to buy your product.

Supporting better recycling practices? That matters. Donating a percentage of profits to homeless shelters? That counts.

Every entrepreneur has a passion, and their work should be a means by which they can embrace that passion. That’s what people buy.

Of course, companies have to meet bottom lines. They have to appease shareholders. They have to make money. To do so, they have to edge out their competition, which obviously involves winning over the public at large.

A new product alone won’t be enough to win a large number of people over. 

As such, philanthropy does more than strengthen consumer relations. It places a company ahead of the curve. It’s an investment, sure, but it doesn’t necessarily have to break the bank, nor does it have to even involve money.

As an added bonus, it’s outstanding PR. Disingenuous attempts of good will are easy to spot, and people are more than happy to point them out. Honest attempts to change the community around you, though? It goes farther than you might realize.

Related Article: Growth Hacking for Good: The Parallel Between Startups and Charities

Be a Better Entrepreneur by Giving Back

So what does this mean for your business? Some takeaways are obvious. Philanthropy is great PR, it engages people, and so on, but the strongest takeaways aren’t quite so clear on the surface. For one, a twist on the adage “fake it ‘til you make it” comes into play here.

Regardless of your charitable intent, repeated efforts will gradually change the way you conduct business. You’ll begin to find opportunities to give back, and that attitude will naturally become an integral part of how you conduct business.

Furthermore, it forces a bit of creativity. As mentioned, philanthropy isn’t limited to signing a large check. Giving back in various ways encourages you to think outside of the box, something entrepreneurs should always do.

Philanthropy doesn’t just make you feel good. It makes you a better entrepreneur. 

Try finding a particular charity with which you can align your business, or perhaps a cause that that’s related to your product or service. If there’s a charity out there that directly benefits your industry or business, you’ve hit the philanthropic jackpot.

Last Word

Philanthropy matters in business. It’s changing the startup and small business landscape, and established companies are embracing it now more than ever.

In fact, it’s the new standard. Consumers expect it, and it’s now on different industries to find creative ways to lend a hand. The funny thing is, there’s no difficult trick to doing this. Entrepreneurs who love what they do tend to naturally help out.

They don’t struggle to find that extra time because they’re embracing their passion through their business.

Falling into irrelevance is a death kiss for virtually any given company, and today, relevance lies in offering a good product that people can believe in.

Quality and passion are the two components necessary to find success today, and it all starts with the desire to do something grand.

Related Article: The Influence of Leadership Styles: How Givers and Takers Match-Up

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