April 7, 2015

CSR vs. Charity – Why is it still a misconception for many?

Many times while sitting with clients and brainstorming on impactful ideas, we find ourselves having to separate the charity related ideas from corporate social responsibility (CSR). For many, the two are the same. But in actuality they are worlds apart. Maybe it is due to the fact that the outcome of both is to help people. Perhaps the confusion comes from the identical act of businesses injecting funds into a community related project. No matter what it is, CSR and Charity are completely different things and we’d like to shed some light on it.

To explain the difference, let’s go back to the basics and define each term.

According to Quora.com, Charity is described as: generous actions or donations to aid beneficiaries, or a benevolent act without the expectation of anything in return

Don't Just Stand There

Whereas CSR is defined as: the ability of doing business responsibly and participating in initiatives that benefit the society in which they operate in

Here are some basic differences as well:

Charity CSR
Can be done by an individual or a company Can only be done by a company/organization
The funds/goods are given to an end user and the giving stops at that level The funds/goods given to the end user are usually the beginning of the project which empowers them to make a significant change in their life
The funds/goods are given for the individual needs of an organization or person The funds/goods need to be given to the community  instead of an individual
Charitable giving requires no follow up or accountability CSR is giving with the responsibility of monitoring the progress of where the funds/goods were invested and the results

Chalk

Here is an example:

Charity CSR
Giving food to a school for special needs students 

Result:

  1. Feeding the students for a specified period of time
Giving bread making machinery to a school for special needs students and teaching them how to use it.Result:

  1. They learn a new vocation and become contributors to society (rather than be dependent on the welfare of others)
  2. They add a food source to the school/market
  3. They sell the bread, make profits for themselves and the school and become self-sustainable

So next time you’re contemplating whether the form of giving is charitable vs. CSR, ask yourself the following questions:

  1. Will the giving stop with the end user or will it empower them to bring on an ongoing positive change into their lives and the lives of others?
  2. Will the giving help one individual/organization or a larger community base?
  3. Is the benefactor going to follow up on what happens with the money invested or are they just spending money for some PR coverage?

The answers to these questions will clearly define the difference.

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