Giving Benefits Corporate Bottom Line: Companies have a symbiotic relationship with their communities that extends well beyond the factory floors and board rooms. Unfortunately the trend has been to reduce their corporate philanthropy. I have always believed that if you went to a shareholder's meeting, and polled the audience as to what percentage of pre-tax profits should go to charity (5%, 10% or 15%) the majority would select one of the two higher numbers. But wait...the average company only gives 1.2% of their pre-tax dollars to charity! So if shareholders even selected 5%, we would increase corporate philanthropy fourfold!

This is not to chastise corporate America. Their ultimate responsibility is to provide well-paying jobs and stable employment. But if your typical Fortune 500 company took a small percentage of the compensation paid to their CEOs and senior executives and directed it toward philanthropic endeavors that improve the communities in which they and their employees reside, would result in a more attractive economic and social environment to retain and attract prospective employees.

If you don't believe me, Harvard professor Michael Porter and Mark Kramer, a business consultant and cofounder of the Center for Effective Philanthropy, present compelling evidence in their report, "The Competitive Advantage of Corporate Philanthropy." (this is a pdf file, you need Adobe Acrobat to view). If you want to read a nice summary, read this article from the Minneapolis Star-Tribune.

Want more...visit Professor Porter's Initiative for a Competitive Inner-City, or read another piece featured by Wachovia.