Letter to Harvard Business Review responding to Michael Porter and Mark Kramer’s article “The Strategic Advantage of Corporate Philanthropy,” available through HBS Publishing.
Three cheers for “The Competitive Advantage of Corporate Philanthropy.” Corporate managers have underestimated philanthropy’s benefits for too long. Porter and Kramer avoid the usual arguments about moral obligation and focus instead on competitive advantage. They dismiss marketing that tries to create a kinder, gentler image by promoting the link between corporate and nonprofit brands but adds nothing to the business itself.
However, in their desire to move corporate charity away from promotion, the authors neglect to mention the very real value of philanthropy to brand building. They use Cisco Systems’ Networking Academy as an example of business building: By providing a free networking curriculum to schools, Cisco is not only contributing to education, it is also ensuring an ongoing supply of skilled maintenance people who can service Cisco equipment.
What Porter and Kramer neglected to say is that Cisco also features Networking Academy advantageously in its branding efforts. A powerful 1997 television commercial featuring Networking Academy first ran in Washington, DC, positioning Cisco as a good guy to regulatory audiences. The same commercial was later used in other cities to recruit students to Networking Academy training courses, reinforcing Cisco’s brand vision of making communication available anywhere to anyone. The tradition of using Networking Academy as a brand-building tool continues today: Cisco’s 2002 annual report contains four photographs identified as Networking Academy graduates, visual reinforcement of its contribution to the global community.
Brand building is yet another competitive advantage of the “enlightened self-interest” that the authors define. The cause-related marketing efforts of the past may have been dismissed as transparent efforts to improve a company’s image, but that doesn’t mean that corporate philanthropy should have no place in branding. A brand-building effort based on a philanthropic effort must simply follow the same rule that Porter and Kramer lay out for the philanthropy itself: The branding effort behind the philanthropy must be “closely linked to the competitive context.”