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Caring big business or a wolf in sheep’s clothing?

By Dayna Simpson - posted Monday, 10 January 2005

An initial reaction to the news that multinational corporations have been donating substantial funds to the Tsunami relief effort could be “big businesses are capable of experiencing compassion after all”. Upon further exploration of these benevolent acts however we may need to suspend our judgement for a short while yet. Considering the traditional inactivity of corporations in regard to their social responsibilities we should be wary of such immediate and direct acts of philanthropy from entities that exist purely to generate profits for private interests.

As the waters gradually begin to recede on the Tsunami disaster, we are all struggling to find ways to assist those in need that are meaningful, helpful, sensitive to cultural needs and sustainable. Governments have taken up to two weeks to make their most significant contributions to the affected regions, and just as long to send their senior watchdogs in to fully assess the extent. This is not so much evidence of foot-dragging or inaction but rather a measure of care and thought on the part of the complex engines that drive bureaucracies.

In stark contrast to the slow moving beast of international bureaucracy, is the incredible speed with which the global corporate engine has sprung to life and waded into the relief zone with financial lifeboats. Million dollar donations were pledged within days of the disaster. This is an incredibly swift reaction considering the normally turtle-like speed corporations typically respond to their daily and longer-term social responsibilities. It begs the question of motive behind such acts of corporate philanthropy, which appears to be missing from the current debate. Was such a rapid response an attempt to race one another to be the first to be seen to assist? Allowing their particular brands to be permanently imprinted on the relief effort? Branding is big business these days, particularly in the race to win long-term loyalty of consumers in an emerging and lucrative Asian market. 


Consider the marketing potential for a corporate giant that acts in a benevolent fashion during a time of intense media attention and limited public scrutiny. It is at a time when the affected communities are psychologically open to forming long-term loyalties to those that assist. Are they rushing to assist because they are able to act in a socially responsible manner after all? Or are they scrambling to capitalise on a golden opportunity to reap the rewards of corporate citizenship, advertise on the cheap and firmly establish brand loyalty all at once? Pepsi Co. pledged $1 million to the relief effort but also made a substantially larger donation of bottled soft drinks and water. Important goods to contribute, but also heavily branded and provided at a time when new loyalties can be more easily established.

Many of the corporate donations to the Tsunami relief effort have been delivered in a responsible fashion, through organisations that have well established guidelines for philanthropy. The Bill and Melinda Gates Foundation donated $3 million of its funds directly to NGOs. and several other Internet service providers make available free links on their pages to the Red Cross, Oxfam and other select NGOs. Dick Smith made a personal rather than a corporate contribution. Australian and international airlines have weighed in with free flights for victims, affected families, and important supply transport. Just as many of the corporate donations however have arrived with a profit kickback for the provider. Starbucks donated an initial $100,000 to CARE and Oxfam UK - small compared to the value of their production interests in the affected region - but also an extra $2 for every pound of Sumatran coffee purchased at its stores during January. Pfizer provided $25 million of its own healthcare products. The line between giving and capitalising for Pepsi, Starbucks and Pfizer is thin.

Eyebrow raising should however extend beyond just the possibility of opportunistic product endorsement in the case of Pepsi, Starbucks and Pfizer but also to those donations that bypass aid agencies and go directly to affected governments or communities. As Andrew Burrell wrote in the Financial Review (January 7-8, 2005), generosity may not stem from humanitarian concern alone but rather the “golden opportunity to seek to expand their influence in a region full of fast growing economies”. Albeit the comments were directed mostly at foreign government aid but the argument in regard to corporate gift-giving bonanzas is the same.

The reaction to Stephen Matthews’ comments made on January 7, 2004 on behalf of the Australian Shareholder’s Association (ASA) was swift. Unfortunately for the ASA the message of Mr Matthew’s statement was lost somewhere between “… corporate donations of any kind should not be made without the prior approval of shareholders” and “… donations should only be made in situations that are likely to benefit the company through greater market exposure”. His comments were immediately attacked by the gift-giving corporates. Were they shocked and offended that their actions might be considered as anything other than compassionate altruism? Or because they don’t want questions to be asked? The ASA messenger got shot and the corporations quickly covered up their tracks.

But do we dare to look a gift-horse in the mouth? After all the donations are arriving from the very corporations that we’ve lobbied for years to recognise and respect their social responsibilities in these communities. Perhaps if the gift comes too heavily packaged in corporate branding and product endorsement we should maintain the right to refuse it. Many acts of benevolence throughout history have been well-disguised acts of malevolence.

Perhaps an answer to the gift-horse dilemma lies in how we allow corporates to donate in a humanitarian crisis. Their funds are perhaps best distributed through the aid agencies experienced with international relief efforts. Corporate branding should not be allowed on aid packaging or equipment. Donations of medicine should again arrive unbranded or at least allow the choice of medicinal support to be made by governments and those groups with the requisite experience, such as Medecins Sans Frontieres. If this presents a disincentive to the loose purse strings of corporations during such disasters then we have no option but to seriously question their motives.


Corporate philanthropy is a significant and growing trend in our society that at a personal level, I hope will continue. But it is new and unchartered territory and any provision of funds from interests that are not predisposed to acts of kindness requires scrutiny. We retain the right to question the funding choices made by governments for foreign aid. As shareholders, consumers and compassionate observers, we should also exercise our right to question the decisions made by corporates to provide foreign aid, regardless of whether the situation is a disaster, or a slow to develop and more intractable humanitarian crisis. Retaining the right to communicate or advertise acts of corporate philanthropy is an important part of the motivations underlying it. However the direct contributions of corporate-based foreign aid needs to remain generic and properly managed. As a society we cannot allow such a universal tragedy  to become vulnerable to opportunistic branding or manipulation.

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About the Author

Dayna Simpson is in the final stages of PhD research in the Department of Management at the University of Melbourne. Her research covers environmental management in supply chains and corporate social responsibility.

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