The traditional relationship between philanthropy and for-profit entrepreneurship has been one that is tangential at best and nonexistent at worse. Philanthropy has always been about a wealthy corporation, individual or foundation writing a check to a charity and then walking away. The largest effect it had on the business aspect of the transaction was a tax write off.
However, a closer look shows there has been a certain amount of philanthropy-entrepreneurship symbiosis for some time. A big company, for example, could use the fact that it gives generously to a charity to burnish their image with its customer base. Some for-profit models took things a step further by telling consumers that for every Product X they buy, 10% if the proceeds will be donated to a favorite charity.
The relationship between philanthropy and entrepreneurship has been evolving rapidly, however. This is clearly demonstrated by some of the biggest companies and premier brands. Nike, for example, entered into a meaningful relationship with the Livestrong Foundation, a group that helps people with cancer. Livestrong was founded by cycling champion Lance Armstrong who survived testicular cancer.
While it’s true that the relationship folded in the wake of Armstrong’s sports doping scandal, the way Nike choose to engineer its philanthropy is instructive. It did so by tying its giving to a high-profile sports figure — and thus bolstered the sale of athletic shoes and other apparel. It is a case study in how philanthropy and selling products can come together to form a seamless relationship in which one benefits the others.
Perhaps a better example is Janssen Pharmaceuticals and its funding of the American Diabetes Foundation. Here, again, we see a philanthropic effort merged with the profit motives of a corporate entity with a charity.
The Janssen example and many others, such as VISA and the Olympics, offers a glimpse into the future of philanthropy and how it is likely to evolve toward models that pair giving with operating a business for profit.
Huge corporations also see philanthropy as a way to forge connections — and thus brand recognition — within local communities. A good example is when Facebook donated an extraordinary $100 million to the Newark Public School System in 2010.