Join Me in Exploring the BCCCC Conference!

Welcome back to ReimaginingCSR!  It's been far too long since I last posted.  Since then, I've moved into an in-house CSR role, as a Senior Manager in the brand-new CSR department at an education company.  I joined the company as a consultant when it started working on its CSR strategy last February and then came on full-time when it created a CSR department over the summer.  It's been a very exciting process, and it has also exposed me to all sorts of new challenges and ideas that I hope to explore by getting back to blogging.

My impetus for restarting this blog today is that I'm currently sitting in a hotel room in Minneapolis, where I am attending the Boston College Center for Corporate Citizenship conference.  I just got back from the opening reception and dinner, where I very much enjoyed talking about CSR theory and practice with people who really get it!  Tomorrow, I am excited to attend a range of great sessions - you can see the agenda here  (breakout sessions in detail here).  At the moment, I'm leaning toward attending the following panels:

• Make the Connection: Play the Role of Corporate Citizenship Change Agent (with panelists from ARAMARK, Himle Horner Inc., Wells Fargo, and Net Impact) - My colleagues and I are really interested in the role our team can play in helping the company through the major changes happening in our industry, so I hope this session will help me think through that opportunity.
• From Volunteering to Involve-a-teering (with panelists from the Center for Corporate Citizenship, Morgan Stanley, General Mills, and PwC) - I am leading the build-out of our volunteerism program, which will focus on skills-based volunteerism.  I am very interested in how we can think not just about employees volunteering their time, but also about the company volunteering its employees' expertise.  I am also interested in how we can use volunteerism to foster employee learning and professional development.  I hope this session will help me explore these issues.

Throughout the conference, I plan to tweet (@JessSF) and blog.  I want this communication to be as helpful as possible to those of you who aren't able to be here in person.  I'd therefore love to hear your thoughts on the sessions above.  What questions do you have on those topics?  What issues within them do you want to explore?

Thank you so much for joining me as I jump back into blogging and for working through these critical issues in our field together.  I am thrilled to be re-starting our conversation!

6 Questions with CECP Director Margaret Coady

After a long lull, I’m very excited to be getting back to posting on Reimagining CSR.  I’m especially excited to introduce a new feature, entitled “6 Questions with…”  On a periodic basis, I’ll be sitting down with (ok, probably emailing with) intriguing people in the world of CSR.  We’ll have the opportunity to learn about their career paths and their day-to-day experiences as CSR professionals, their insights into trends and challenges in the field, and the interesting activities with which they’re currently involved. 

I hope to capture the diversity of this field by interviewing people in a range of positions – working in-house at companies, at consulting firms, at industry associations, and at nonprofits; in corporate philanthropy, in socially-responsible business, in cause marketing, and in environmental roles; who spend their days thinking about the supply chain, about financials, about key stakeholders, or about compliance; and the many other niches that make up the world of CSR.  If there’s anyone in particular that you would like to see featured, please email me at reimaginingcsr (at) gmail (dot) com.  I know that this blog tends to be a bit skewed towards corporate philanthropy, as that’s where the bulk of my experience and network lie, so I would particularly appreciate requests for or recommendations of professionals in other areas of CSR.

We’ll be starting this feature by talking with Margaret Coady, the Director of the Committee Encouraging Corporate Philanthropy, which bills itself as “A network of global CEOs committed to corporate philanthropy.”  I first met Margaret when I was a corporate philanthropy consultant at Changing Our World, and she was a wealth of information about whatever facet of the sector we happened to be researching on a given day.  Margaret and I kept in touch when we both started business school (she while continuing to work full time!), bonding over our shared experience learning all about cranberries.  (Did you know they bounce?)  Margaret sits in a fascinating place in this world, with visibility into the work of many of the country’s top corporate philanthropists – and increasingly, as the organization expands globally, the world’s.  She was kind enough to share that view with us here at Reimagining CSR.

Jessica: How did your career and life experiences lead you to the field of corporate social responsibility and to your current position?

Margaret: I began my career as an information technology consultant with PricewaterhouseCoopers, immediately followed by two years as a technology product manager at an Internet start-up in San Francisco (the first year epitomized the spirit of dot-com invincibility; in the second year, everything came somewhat unhinged).  Missing the cultural life of NYC, I moved east and became the Assistant Director of a prominent mid-town art gallery.  That was a great experience (my friends have heard plenty of behind-the-scenes stories), but I wanted to get back to a career with more of a corporate twist. 

Although CECP is a nonprofit, our membership consists of over 150 leading corporate CEOs and we also work closely with the senior giving professionals at those companies.  My first role at CECP was as the Research Specialist, charged with growing our proprietary Corporate Giving Standard benchmarking system, which now contains over $60 billion in detailed giving data.  This challenge put my IT, sales, marketing, and product strategy skills to great use (as well as my undergraduate liberal arts degree).  I was promoted to CECP’s Director, under Charlie Moore, within a few years.  In 2009, I graduated as valedictorian of the Executive MBA program at Columbia Business School; the learning from those courses has been worth its weight in gold in my new strategic role.

Jessica: What do you do all day?

Margaret: In addition to day-to-day management, the short answer is that I draft the strategic course for CECP’s research publications, events, and programs.  After all, CECP is only relevant if our work fills the immediate unmet needs of our member companies.  Yet it is important for CECP to keep an eye on the horizon, too, since it is a luxury for companies to look too far into the future given increasing pressures on their time. 

Recent projects of mine include: crafting a definition and dollar valuation for pro bono service (with our partners at the Taproot Foundation); working alongside the U.N. Global Compact to draft Principles of Responsible Social Investment (to be announced this summer by the Secretary General); shaping the content agenda for CECP’s newsletter, The Corporate Philanthropist, and our CEO conference series; writing the latest edition of CECP’s benchmarking report, Giving in Numbers, and managing the selection process for CECP’s Excellence Awards in Corporate Philanthropy.  However, CECP is fundamentally a roll-up-your-sleeves organization, so I spent an hour today stuffing invitations for a special dinner we are hosting at the House of Lords in London before our first CEO conference abroad.

Jessica: What is one of the most exciting trends that you observe in the world of CSR?

Margaret: The most important and inspiring trend that I see across our corporate membership is the commitment to proactively engage in problem-solving on tough issues. The walls that separate funders, grantees, governments, multilaterals, activists and others are falling away as each change agent instead focuses on bringing its skills and resources to bear on today’s most difficult social challenges.  Specifically, I see the work that Nestle, and Mark Kramer and Michael Porter, have done on the concept of “shared value” starting to take root more deeply among companies.  This philosophy advocates for not simply aligning giving strategy with business strategy—but synthesizing the two.  Essentially the idea is that companies must focus on social issues that directly touch the value chain of the business.  By concentrating their efforts on social issues that create opportunities (or obstacles) to corporate growth, businesses simultaneously help society and their bottom line.  In other words, corporate philanthropy is no longer a complementary function—it is essential to the company’s growth and wholly intertwined with the broader objectives of the business.  We’re very excited to discuss this concept in more depth at our upcoming Corporate Philanthropy Summit in June, and have tried to take some of these ideas further for our corporate CEO audience in our latest research.

Jessica:  What big challenge is currently facing CSR professionals and/or companies?

Margaret: Corporate organizational charts do not always position philanthropy and CSR professionals to actualize the full potential of their roles.  These functions can deliver immense value, but not when they are in a silo, understaffed, or improperly staffed.  The strategic nature of these roles has only recently begun to be broadly understood, and many companies have yet to fill them with the right talent to get the job done—or to empower that talent to get results. 

Jessica: What's one interesting thing that your organization is up to?  (Go ahead, brag a little.)

Margaret: One of CECP’s judging criteria for our Excellence Awards is a commitment to measurement (the others are innovation, CEO leadership, and partnership).  We believe measurement is essential to effective giving (the adage ‘what gets measured, gets managed’ applies here), which is why we invest so heavily in research and systems that allow companies to track and benchmark their giving.  This year, with the help of the U.N. Global Compact and partner organizations around the world, we are working to expand our measurement framework to be applicable internationally—essentially, we are striving to build a global measurement framework for corporate philanthropy.  Our vision is to create a common understanding of what is considered corporate philanthropy, and how contributions should be valued.  With this in hand, we can paint a rich portrait of global corporate giving and track its evolution over time.  I encourage anyone with insight in this area to email my colleague Alison Rose.

Jessica: CECP recently celebrated its 10th anniversary.  How has corporate philanthropy changed in past the ten years, and how do you hope it changes in the next ten years?

Margaret: At CECP, we decided to celebrate our 10-year anniversary not by looking backward, but instead by challenging ourselves and our membership to consider what the world—and the environment for corporate philanthropy—could look like in the year 2020 if we proactively adopt a solutions-oriented mindset on local and global social issues.  We needed help to do this, so in addition to interviewing numerous thought leaders ourselves, we enlisted McKinsey & Company to work with us to outline the game-changing trends (demographic, environmental, technological, and geopolitical) that will shape the business landscape in 2020.  This work outlines what companies need to do to prepare for the certain (and somewhat less certain) forces headed our way.  I won’t preview our conclusions here, but instead invite anyone who is interested to download a free copy of the report from our website when it is available in late May 2010: http://www.corporatephilanthropy.org.

Corporate Response to the Haitian Earthquake: Update, 1/13/10

The US Chamber of Commerce's Business Civic Leadership Center is tracking the corporate philanthropy response to the earthquake in Haiti here. Other great sources of such information include CSRWire and PRNewswire. Know something about corporate involvement in relief efforts that isn't included on those sites? Please share it in the comments below.

Earthquake in Haiti - How Companies Can Help

As I’m sure you’ve heard, a big earthquake hit Haiti today. While details are relatively limited at this point, it seems clear that the earthquake has taken a major toll. In the wake of such disasters, companies often step up with offers of support, but in the confusing hours and days after such an event, it can be hard to know how to help.

Just after the 2004 tsunami, I wrote this article for onPhilanthropy about how companies can best contribute to disaster relief efforts. While it’s several years old, I think the advice is still relevant, so I’m posting it for those of you who may spend Wednesday working on your own company’s response.

Here are a few other resources that might be useful:

The U.S. Chamber of Commerce Business Civic Leadership Center has a website focused on supporting companies around issues of disaster relief. The page has a ton of great information, including a phone number specifically for companies that “Need help responding to … a disaster”. Tomorrow, as information (hopefully) starts coming out quickly, the best way to stay up to date might be Twitter – follow the Center @chamberbclc or its Executive Director, Stephen Jordan, @scjordan.

The Council on Foundations published a guide called “Disaster Grantmaking: A Practical Guide for Foundations and Corporations”, which you can find here. (Note that this link is to a PDF.)

The Committee Encouraging Corporate Philanthropy also has a website dedicated to resources for companies engaged in disaster response efforts.

I find information sharing to be critically important in times like these, so if anyone comes across specific information about how companies can be helpful in responding to this particular earthquake, I’d really appreciate it if you’d share it in the comments below. Similarly, please share any resources you find that may be helpful for companies considering whether and how to help. Finally, if your company makes a donation, or if you hear about a company that does, please share that, as well, so that we can begin to track the corporate response to this earthquake.

Thank you, and good luck to everyone involved in this effort.

Goldman Sachs Update - Employee Giving

Happy New Year! Yesterday's New York Times had a bit of an update on the Goldman corporate philanthropy story we've been following here on Reimagining CSR (see past articles here, here and here). WSJ.com has a round-up of related stories here.

According to the paper, "As it prepares to pay out big bonuses to employees, Goldman Sachs is considering expanding a program that would require executives and top managers to give a certain percentage of their earnings to charity." The article goes on to say, "While the details of the latest charity initiative are still under discussion, the firm's executives have been looking at expanding their current charitable requirements for months and trying to understand whether such gestures would damp public anger over pay…"

The most recent article doesn't provide much new information, other than what the paper reported on the same subject this past fall, beyond demonstrating that the concept is apparently still alive. However, it does compare the concept to an employee-giving program at Bear Stearns: "The charity idea would be similar to a decades-long program at the failed investment bank Bear Stearns, which required more than 1,000 of its top workers to give 4 percent of their pay to charity each year and then checked their tax returns to ensure compliance." It then goes on to estimate the impact of such a program, "Assuming a similar percentage and level of participation."

Granted, that's a big assumption - the article doesn't give any definite information about the number of workers or percent of pay that would be involved in a Goldman program - but the Bear Stearns program is still useful as a benchmark. If the company were indeed to implement an employee giving program along the lines of what's being discussed, and if the numbers looked something like Bear Stearns', my question is this - would this program actually have any impact on the overall giving by affected employees? That is, do the company's top earners (elsewhere in the NYTimes article, we learn, "For their work in 2008, 953 Goldman employees were paid more than $1 million each") currently donate less than 4% of their income?

Of course, the answer to this question doesn't necessarily change whether the program would achieve Goldman's aims. Theoretically, if this initiative could indeed influence public perception about the bonuses, it matters less whether employees' donations are increasing and more whether the company has a strong story to tell about how generous its employees are with their large paychecks. In that case, the company could get as much value simply by gathering information about its employees' existing donations and their impact and sharing that information. I'm not sure it's relevant for the company to set a mandatory giving hurdle when the hurdle is relatively easy to reach.

On the other hand, perhaps the Goldman Sachs program, if it indeed becomes reality, will be nothing like the Bear Stearns program. Perhaps it will require that employees (or at least the highest-earning employees) donate a significantly higher figure, a percentage that would seem far above what the average person would expect even from a million-dollar earner - for the sake of argument, let's say something like 25%. Would that change perceptions of the program? Would that make the general public - if that's in fact the stakeholder Goldman would be trying to influence - change its attitudes toward the company, such that this solution (employee giving program) actually impacts the problem (public anger at big bonuses) it seems designed to solve? I'm not sure - but it would definitely break through the clutter of expected actions.

Of course, maybe the lackluster reactions to the idea - as evidenced, for instance, by the comments to the NYTimes story (admittedly not a representative sample, but the comments are really negative) - will convince Goldman Sachs decision-makers that this proposed solution won't, in fact, address the problem in question. Regardless, I look forward to the next installment of this story, which continues to help us think more deeply about causal relationships in the world of corporate philanthropy.

Update - Goldman's $500 Million Controversy

There were quite a few articles over the weekend that addressed Goldman Sachs' 10,000 Small Businesses program and the backlash that it has induced. Below, I've summarized a few that I found particularly interesting.

Before we turn to the articles, though, I want to point out one thing. I noticed an important line in a Financial Times article, which said, "Goldman stressed that the small business drive had been planned for a year." I'm not sure if or how that changes the discussion of whether this is a good strategic CSR initiative, but it's a useful piece of information to add into the conversation.

$500 Million is just "Crumbs from its (Goldman's) table."
The New York Times published an editorial entitled "Goldman's Non-Apology". The editorial criticizes what it argues are Goldman's contributions to causing the current recession, as well as what it sees as Goldman's unwillingness to acknowledge that it needed the government's bail-out money and that it thus isn't true that "taxpayer dollars have not helped to generate its post-crash profits." The piece goes on to address the 10,000 Small Businesses program, calling the $500 million pledge "crumbs from its table". It says, "It is hard to take seriously Goldman's claim that the program was not motivated by its public relations problems. The money will be welcomed by the recipients, but if Goldman wants to make a meaningful contribution, it would have to be in the billions and aimed more directly at taxpayers." Instead, the editorial suggests, Goldman should make "A multibillion-dollar gift to the federal Bureau of the Public Debt, which accepts tax-deductible donations to reduce the national debt."

Goldman's recent "exercise is so sequenced and packaged that it's bound to come across as disingenuous", but ultimately, the company "exists solely to make profits for its employees and shareholders."
The Wall Street Journal blog Mean Street, written by Evan Newmark, takes a very different stance, in a post entitled "Mean Street: Don't Apologize for Anything, Goldman Sachs". According to Newmark, the reason the general public is angry at Goldman is simple: "In an economy full of losers, everyone is fixated on hating the winner." He goes on to argue that the 10,000 Small Businesses initiative, along with Lloyd Blankfien's apology (quoted in the NYTimes editorial, if you want to see the exact language), "...is so sequenced and packaged that it's bound to come across as disingenuous, even deeply cynical." However, ultimately, Newman thinks that the public is coming down too hard on Goldman: "And here's the really unfortunate aspect of your current predicament: it's undeserved. Sure, there was some clumsy PR out of Goldman over the past year. But I still can't figure out why and to whom you're apologizing." Furthermore, he says, "...you're apologizing because nobody can handle the real truth: Goldman Sachs exists solely to make profits for its employees and shareholders. The rest is just PR."

"The bankers may have to give up more yet - and not only by writing a check."
A separate article New York Times article - "Wall Street's Spin Game," by Graham Bowley - gives Goldman Sachs advice on how to confront its current public relations challenges (which go beyond the Small Businesses initiative). Among the tactics he recommends is, "Give Back Some Money." However, he warns, "...there is the risk that such a strategy will be seen as a transparent ploy to buy off public opinion. Goldman's donation was only about 3 percent of the $16.7 billion the bank has so far set aside this year for its bonus pool. The bankers may have to give up more yet — and not only by writing a check." Instead, he advises (quoting Howard J. Rubenstein, president of communications firm Rubenstein Associates), the company should make it "mandatory" for its "brilliant staff" to volunteer in ways that have "real impact". (It's not particularly relevant here, but I really liked the advice to "Show you create real products that benefit people." Actually, that is relevant - ultimately, isn't CSR broadly about creating real value for the general public, that is, creating products (or services, or donations, or business processes) that benefit people?)

"As hedging strategies go, this remains far from sure to work."
The Financial Times suggests looking past the immediate controversy and into the future, with an article by Gillian Tett entitled, "Can today's philanthropy fend off future bank-bashing?" The article asks, "What exactly was going through the brain of Lloyd Blankfein, head of Goldman Sachs, this week when the bank announced a $500m initiative to help small American businesses?" Tett argues that, while making "an effort to quell the current bank-bashing" might be part of the company's reasoning, "Goldman, is (in)famous for trying to be ahead of the curve. And the really interesting political economy issue that haunts finance now, is not the attacks that Goldman (and other banks) have suffered in 2009 - but the question of what could await them in 2010, 2011, 2012 or beyond." The article suggests that, if the economic situation gets worse instead of better, we could see far greater public outrage. In this context, "Can Goldman's $500m programme protect the bank against that political risk? On paper, the target of its largesse certainly looks politically savvy: small business funding is a huge political headache in the US right now, due to its link with unemployment." However, Tett goes on to say, "...the grim fact remains that $500m is still just 3 per cent of the bank's bonus pool - and even a non-banker can see that is a small sum. As hedging strategies go, this remains far from sure to work."

"Goldman's wholesale focus…does not suit retail diplomacy."
A second Financial Times article, while focusing on the various problems threatening Goldman's reputation (its "most precious asset"), raises a very interesting question about its philanthropic efforts: "One difficulty is that Goldman's wholesale focus means little business contact with an angry public – it does not suit retail diplomacy. Even well-designed charitable initiatives, then, risk being misinterpreted." The article doesn't elaborate much on this idea, so I'm not completely sure where the authors are going with it, but I think this is a really interesting comment. It's true that the vast majority of people don't really know what Goldman Sachs does, not in the way that we know what, say, Wal-Mart, or Disney, or Bank of America do. (This relates to the advice in the NYTimes article referenced above, "Wall Street's Spin Game".) We interact with the latter companies' products and services every day, but hardly any of us interact with Goldman. As such, is it possible for the general public to have a relationship with the company, and is such a relationship critical to our ability to trust them? This is important because, as I discussed in my last post about Goldman Sachs, while CSR initiatives may build trust, they need to be built on a baseline of pre-existing trust, or people might not trust the activities or might see them as disingenuous. So, what does this mean for business-to-business companies? Are there other ways they can create that baseline of trust, or, as this FT article suggests, are they simply not suited for "retail diplomacy"?

I'm interested in looking at other instances in which a corporate philanthropy commitment has been met at least in part with negative feedback - I think isolating what doesn't work would help us to better understand what does. If you know of any good examples, I'd really appreciate hearing them.


Thanks!

Goldman’s $500 Million Controversy

Goldman just made a big charitable commitment - and stirred up quite a bit of controversy. Did the company design or execute the program poorly? Are its critics being unreasonable? In this post, I examine the program and some of the reactions to it, consider what could be going wrong, and summarize the analysis of several experts in a recent discussion of the issue in the New York Times. What's your take?

Last week, I wrote about the Goldman Sachs Foundation and the company's employee giving activities. In that post, I postulated that the company was using philanthropy in part to mitigate widespread discomfort (too weak a word?) with its large employee bonuses. I also complained about comments like the following statement from a 2007 New York Times article about one of the firms' giving vehicles: "Cynics who have watched the wealth creation at Goldman might think that the program is little more than a public relations effort to mask the gigantic bonuses it is expected to pay out starting in early December…" Instead, I argued, "I don't think that's cynical at all, though, nor do I think it takes anything away from the firms' - or its partners' - philanthropy. If the company is recognizing a risk, and utilizing philanthropy as one of the tools it uses to minimize that risk, that's good strategic corporate philanthropy."

Based on general reactions to one news story this week, though, it looks like a lot of people disagree with me! This week, Goldman announced a $500 million commitment to a new "10,000 Small Businesses" program. According to an article that appeared on the New York Times website on November 17, the company will "provide $200 million to pay for small-business owners to get business and management education at local community colleges and other places," offer $300 million of grants and small loans to small businesses, and also provide mentoring (by employee volunteers) and networking opportunities to these same small-small business owners. Yesterday, an article in the Wall Street Journal gave slightly more detail, stating that $250 million of the total would be distributed as loans, with an equal quantity in grants. Warren Buffet and Michael Porter (HBS professor, major contributor to the field of strategy, founder of a nonprofit that fosters entrepreneurship and economic development in inner cities) are among the effort's advisers. The company's own discussion of the initiative is here.

 Theoretically, this program makes a lot of sense as a strategic philanthropy effort. Currently, one of Goldman's major problems is that, as the New York Times put it, "it has become a punching bag for an industry that is seen by many to have benefited unfairly from billions in taxpayer dollars." People are angry that the government bailed out the financial sector, and now Goldman's employees, according to the same article, has earmarked $16.7 billion "so far" this year for employee pay. Meanwhile, unemployment remains high and the general public hasn't seen the end of this recession.

As a result, it makes sense that Goldman is investing in an effort that, if successful, is presumably designed to stimulate economic growth, from the bottom up. It is investing in small businesses, providing two resources that it has in abundance - cash and employee talent - to a population that could utilize those two resources to grow, creating social benefit. There is a direct connection between the problem Goldman faces (anger over its unequal share of the wealth) and the solution it is offering (creating a program to generate more wealth for the people who currently have a smaller piece of the pie), and it is utilizing resources that it has unique access to in order to provide that solution.

Simple, right? Um, apparently not, if the 97 comments (as of the time of this post) reacting to the Wall Street Journal article are any indication. While Goldman certainly has its defenders among WSJ commenters, responses like these were common (the commenter's name follows the quote):

• "The 500 million would be pro rata 2.5% of their annual bonus this year, which is cheap buy-out for the public opinions…" (JAMES DREITO)
• "The amazing part is these Goldman "masters of the universe" think we are all that stupid that we will fall for this not so subtle act of contrition...it sure must be nice to own both political parties and get away with anything and everything." (John McIlvenna)
• "Goldman's actions are sickening. After STEALING tens of billions of dollars from the US taxpayer, Goldman is now insulting America with this cheap trick. Goldman Sachs must be destroyed before it destroys the US." (Peter Marlow)
• "What a crock. A despicable move by Goldman to appease the masses. My bet is less than 10% of the "500 million" is ever distributed. Certainly less than $50 miliion (SIC) will ever be actually given away. Who are these creeps kidding? Endless pox on them." (Michael Smith)
• "Wow, how generous of the crooks who helped create a financial meltdown, then took $64 Billion in tax payer money to make themselves whole only to pay the people who caused this billions in bonuses. It now makes sense that they should get some good Public Relations from our money and ....another tax break for handing out charity to us poor folk west of the Hudson." (TOM OKEEFE)
• "Blood money." (Dirk Dreux)

So what did Goldman do wrong? I can think of a few possible issues (but I feel like these ideas could use some sharpening or refinement, and I'd love your thoughts on how to do so):

• Corporate philanthropy, and CSR more broadly, can definitely help mitigate reputational and other types of risk, but it doesn't cause other acts that people judge negatively to go away. In fact, if the CSR activity seems hypocritical, people tend to react really negatively. Is that what's going on here? The fact that many commenters (and journalists) brought up a recent quote by the Goldman CEO, where he claimed that the firm is "doing God's work", suggests that this is a factor.
• CSR can certainly promote trust, but maybe companies need a baseline of trust that is built through their general business activities. Otherwise, you get reactions like the ones revealed in some of the comments quoted above, with people questioning whether the company can be trusted to carry out the program as promised.
• While I still believe that PR (and other business) benefits are a legitimate motivation for CSR, really good business benefits most often (though not always) come from a program's outputs and results, not just the inputs. That is, Goldman is likely to get real credit if and when it can show that it's donation has promoted economic growth. A good illustration of this viewpoint comes when the New York Times article quotes Andrew Stern, president of the Service Employees International Union, regarding his thoughts on the Goldman commitment: "It's a down payment, a step forward and hopefully a precursor of a different discussion — in the long run, how do we build an economy where everyone can share in the success?" he said. "But if this is an isolated public relations activity, it's insufficient."
• Or maybe I'm just in the minority, and the majority of people believe that corporate philanthropy should not benefit the business, and the companies should carry out philanthropic activities because "it's the right thing to do".

Today, the New York Times, in its Room for Debate section, tried to hash out some of these questions. It asked, "Does the firm have an obligation to make philanthropic efforts, given that it benefited from the federal support? How can the most be made of this opportunity? Should Goldman be committing more than $500 million, based on its bottom line?" It pulled together a great panel to weigh in on the matter, including:

• Matthew Bishop and Michael Green, "Philanthrocapitalism"
• Robert Johnson, economist
• Nicole Gelinas, Manhattan Institute
• Nomi Prins, senior fellow, Demos
• Peter Firestein, author
• Charles Best, DonorsChoose.org

Bishop and Green reacted similarly to Andrew Stern. They argue, "If this announcement is the first of many acknowledgments by the leading lights of the finance world that the winners in our economic system have a responsibility to ensure that the benefits are spread throughout society, then Goldman C.E.O. Lloyd Blankfein's recent claim that the firm is "doing God's work" may not be so ridiculous."

Johnson focuses not on the donation, but on what he sees as the structural problems that made it possible: "...Goldman Sachs would not have that $500 million of spiritual bounty to distribute if it weren't for the U.S. taxpayers. Charitable giving is nice, but we can't take our eye off the ball when it comes to the need to repair our structure of government and address the undue influence of Goldman Sachs and the other powerful financial sector firms." In other words, in his view, the philanthropic program does not address the root problem.

Gelinas is concerned that Goldman's efforts will be too successful as a PR initiative, particularly among politicians. She argues, "That is, Goldman makes tons of money thanks to an implicit taxpayer "too-big-to-fail" subsidy, and it will give a little bit of that money back in ways that please important political constituencies like the National Federation of Independent Business on the right and the National Urban League on the left, each of which will help the firm with its small-business undertaking. Because it sweetens too-big-to-fail politically, the charitable initiative is bad for the economy and society."

Along somewhat similar lines, Prins suggests that the target audience for this initiative - not in terms of beneficiaries, but in terms of whom Goldman is looking to influence - is not in fact the general public, but the government: "Mr. Blankfein missed the opportunity to be genuinely concerned about the little people about a year and a bailout ago. So he's sacrificing a $500 million pawn and by doing so, he may placate the government — a more necessary a task to him than being universally loved."

Firestein's argument draws on two of the theories I laid out above, including both the idea that the public will reject perceived hypocrisy and that a baseline of trust is required before companies can use social engagement to augment that attribute. He says, "It's a lot of money (to anyone but Goldman) but it does nothing to convey a change in the bank's attitude toward the society around it." Furthermore, he argues, "That Goldman has allowed its reputation to sink so low as to make half a billion seem like a token causes damage far beyond the bank itself. It may undermine public sentiment toward truly needed financial entities for a long time to come."

Finally, Best shares his ideas for how Goldman could improve the execution of this project. He also shares his own experience as the recipient of Goldman funding: "I know from personal experience what Goldman Sachs funding can do for a small enterprise." In this way, though not explicitly, he draws on the idea that results are important, holding up Goldman's success in helping him as evidence that perhaps they can do this well, too.

What do you think? Are Goldman's critics being unreasonable? Is the company's corporate philanthropy strategy a poor solution for the problem the company is trying to address, or has it done a poor job executing this strategy? Do motives matter, and if not, where does hypocrisy come in? Or does this situation reveal that there are simply limits to the strategic benefits of corporate philanthropy?