By Melissa J. Anderson

Last Month, Matt Tonello, Director of Corporate Governance for The Conference Board, posted a detailed account of the strategic importance of Corporate Philanthropy on the Harvard Law School Forum on Corporate Governance and Financial Regulation.

The in-depth article discusses the importance of corporate philanthropy in helping a company grow its reputation and its bottom line. Tonello explains that while critics of corporate philanthropy bill it as a drain on company coffers or simply a means for management to boost social cache.

Nevertheless, he says, “Corporate giving programs can provide a competitive advantage when they are well designed and carefully executed.”

The company’s reputation, the communities in which it operates, its local effectiveness, and its ability to retain staff are all improved through corporate philanthropy. He explains:

“…charitable contributions can increase the name recognition and reputation of a brand or company among consumers. In addition, corporate support of local causes improves the quality of life in communities where the company does business. These contributions help managers build relationships with government officials and community leaders and can reduce regulatory and special interest group obstacles. … A commitment to philanthropy also facilitates efforts to recruit and retain talented employees.”

Tonello adds, “Finally, contributions can stimulate innovation as grants to universities and other organizations provide companies with new ideas, access to technical expertise, and opportunities for research and development collaboration.”

Similarly, corporate philanthropy can be a key part of employee engagement strategy, helping to attract high potential talent. Additionally, he writes, “As a result of corporate-sponsored volunteer experiences, current employees report higher job satisfaction and a greater commitment to their company.”

But these benefits can only be achieved under optimal circumstances – companies have to put in significant work up front to ensure its philanthropy work is truly effective. Here are Tonello’s three key insights into running a successful corporate philanthropy program.

By Melissa J. Anderson

In July, GE released its 2010 Corporate Citizenship Report. A follow-up to last year’s report, which included a lengthy discussion of the purpose of business in today’s new complex, global context, this one features perspectives from business leaders across the corporation (and various outside experts as well), discussing GE’s strategy, successes, and challenges moving forward in the corporate citizenship space.

One of the most important developments in this year’s reports is the growing recognition that sustainability is more than a “nice to have.” The issue has become a costly concern.

According to the report, the urgency of environmental, social, and regulatory challenges have forced the company’s corporate responsibility response to “shift up a gear.” Here are a few ways that GE is responding to the material challenges represented in the new global marketplace.

By Melissa J. Anderson

According to a new paper out of Harvard Business School, it’s time to usher in a new phase of capitalism.

The paper, Creating Shared Value, says that CSR has, so far, only served as a band-aid on a broken system. It’s time, write the authors, to re-envision how how businesses make a profit as well as create broader value within their communities.

Written by Michael E. Porter, Bishop William Lawrence University Professor, Harvard University and Mark R. Kramer, senior fellow at Harvard’s Kennedy School of Government, and co-founder of consultancy FSG with Porter, the paper was published earlier this year in the Harvard Business Review.

They believe that in recent decades, companies, driven by shareholder focus on short-term gain, have grown to ignore their impact on their surrounding communities, focusing solely on creating profit – often to the detriment of their workers, the environment, and society. Not only that, they say, but we are approaching an era of resource scarcity and, given the lack of trust most people now have in big business, companies must change the way they operate.

Corporate social responsibility isn’t the answer, they say. In order for the new model to stick, the work companies engage in going forward must be profitable – not philanthropy. Otherwise, it will always come across as a soft side project. They write:

“Businesses acting as businesses, not as charitable donors, are the most powerful force for addressing the pressing issues we face. The moment for a new conception of capitalism is now; society’s needs are large and growing, while customers, employees, and a new generation of young people are asking business to step up.”

The key, Porter and Kramer write, is to create “shared value” – to engage in projects that are profitable and benefit society as a whole. They say, “The concept of shared values resets the boundaries of capitalism. By better connecting companies’ success with societal improvement, it opens up many ways to serve new needs, gain efficiency, create differentiation, and expand markets.”

According to the authors, by examining its products (from a benefits and harms standpoint), its supply chain, changing technology and environmental situations, and the unique needs of its customers, a company can identify potential opportunities for creating shared value. Additionally, they write, it may seem difficult at first, but it is an exercise that gets easier with a change in mindset.

Here are three areas in which that companies can create shared value.

By Elizabeth Bales Frank

Recently, Deloitte issued a report revealing that “millennials who frequently participate in workplace volunteer activities are far more likely to be proud, loyal and satisfied employees compared to those who rarely or never volunteer.” The Deloitte report confirms that the best way for an employer to keep this group engaged is by, quite simply, engaging — in the community and in charitable organizations.

More than half of the millennials responding to the survey said they were “likely to factor a company’s commitment to the community into their decision if choosing between two jobs with the same location, responsibilities and pay and benefits.”

Among the benefits to employers are higher employee satisfaction, greater retention and loyalty, and the opportunity to train employees in the development of a variety of skills — leadership, board membership, public speaking, fundraising, teaching, and mentoring — through hands-on experience, which at the same time provides a direct benefit to a charity or community endeavor. Savvy employers are already in: a recent survey indicates that roughly 90% of Fortune 500 companies conduct corporate volunteer programs.

By Melissa J. Anderson

A recent Harvard Business School working paper examines the impact of senior management and board directors on the distribution of corporate philanthropy. The results show that the rich interplay between individuals and organizational structure influences the amount and type of corporate giving the company undertakes.

As more companies take corporate philanthropy in a strategic direction, the paper answers some critical questions regarding how the interpersonal dynamic between management and boards, as well as gender, effects corporate giving.

Authors Christopher Marquis and Matthew Lee write:

“While some corporate leaders may treat philanthropy as discretionary, or simply part of the ‘overhead’ of doing business in certain locales, our results suggest that by making conscious organizational choices, corporations may be able to more effectively harness the elusive strategic benefits of their social responsibility programs.”

Here are three ways, according to the study, that giving is influenced by players at the top.

By Melissa J. Anderson

It wasn’t too long ago that Kimberly-Clark, a global tissue products manufacturer, and the conservation world were at odds. In fact, as Raz Godelnik of TriplePundit pointed out, in 2009, Greenpeace was targeting K-C for clearing forests that were home to endangered species.

But in 2009, the Greenpeace and its partner organizations declared victory over the company, in a campaign called “Klearcut.” According to the Klearcut website:

“At a joint news conference in Washington DC, Greenpeace and the Kimberly-Clark Corporation, the world’s largest tissue-product manufacturer, announced an historic agreement that will ensure greater protection and sustainable management of Canada’s Boreal Forest and other ancient forests around the world.”

The company promised to source 100 percent of its fiber from “environmentally responsible sources.” Additionally:

“During the evolution of this policy, Kimberly-Clark stopped buying more than 325,000 tonnes of pulp a year from logging operations in the Kenogami and Ogoki Forests. The company managing these forests was unwilling to protect endangered forest areas in them and supply Kimberly-Clark with Forest Stewardship Council certified pulp.”

The agreement between the groups was considered a big win for conservation groups and ushered in a new, collaborative style of relationship between corporations and advocacy organizations.

And now, with the announcement of a new relationship with the World Wildlife Federation, K-C has changed the corporate conservation conversation again.

By Melissa J. Anderson

Most corporate responsibility reports include information on sustainability initiatives, corporate volunteering, community investment, and other efforts that are deemed “good for society,” but are not necessarily business-critical.

Last week Bank of America released its first ever CSR report, which includes a lot more than that. CEO Brian T. Moynihan wrote:

“In 2010, the global economy continued its recovery from the worst recession since the 1930s. While there are a number of positive signs that the economy is improving, we recognize the role the financial industry played in this crisis and are committed to working with policymakers, financial institutions and others in the private sector to restore growth and foster greater stability going forward.”

The report delves into the work Bank of America is doing to boost the economy, recognizing the role its industry played in the recession. What’s interesting is that the bank considers this work corporate social responsibility – not merely an economic or market-based concern, but a social one as well.

Moynihan continued, “There continue to be challenges ahead as the U.S. and global economies slowly grow their way out of the crisis. We see opportunities, too. In this report, you will find a summary of the many specific steps we are taking to address both.”

By Melissa J. Anderson

According to a recent report by the Center Encouraging Corporate Philanthropy, the majority of corporations gave more in 2010 than in 2009. In the organization’s Giving in Numbers 2010 report, the organization revealed that total giving was up by almost 18%, with 65% of companies reporting higher donations.

Alison Rose, Manager of Standards and Measurement at CECP, said [PDF]:

“In looking at our four year matched set, we were struck by the divergent paths of companies from pre-downturn giving levels: in 2010, a quarter of companies increased giving by 25% or more than 2007 levels, while 21% of companies reduced contributions by 25% or more. This shows that while some companies have been able to surpass pre-crisis levels, others are still in a period of rebuilding.”

There are several reasons that companies are digging deeper this year. Here are few of the big ones.

By Melissa J. Anderson (New York City)

On Wednesday, Morgan Stanley held its third annual Strategy Challenge event, the culmination of an eight-week program in which 60 of the firm’s up-and-coming talent put their skills to use for fifteen charities in need of strategic advice on organizational growth.

Audrey Choi, Managing Director of Global Sustainable Finance at Morgan Stanley, remarked, “At Morgan Stanley, we have a long standing, deep commitment to giving back to the community.”

The non-profits are not the only beneficiaries of the program, though. Choi added that the participants in the Strategy Challenge are nominated by their business leaders as future leaders of the firm. They are able to make connections with other rising stars, and gain access to senior level individuals they wouldn’t otherwise have the opportunity to meet, in addition to gaining valuable skills and experience.

As a result, Choi said, Morgan Stanley has donated 6,500 hours of community service this year, worth approximately $1 million – and that figure does not include the value of the advice provided by the firm.

Joan Steinberg, Managing Director and Global Head of Philanthropy at the firm, added, “When we say we want to deliver the best to our communities, this is what we mean.”

By Melissa J. Anderson

Last month, Harvard Business School’s Working Knowledge published a working paper explaining how mandatory reporting of non-financial information can influence not only a company’s performance on environmental or social targets, but also how it impacts talent management within that company as well. And according to the papers authors, Ioannis Ioannou of London Business School and George Serafeim of Harvard Business School, the influence is significant.

The paper, Consequences of Mandatory Corporate Sustainability Reporting, explains that while many of the globe’s largest corporations voluntarily report non-financial information, several countries have moved toward requiring them to do so, for example in Denmark, Sweden, France, and South Africa.

Here are five ways, based on the results of the authors’ study of companies in 58 countries, that corporate responsibility reporting (called “sustainability” reporting in the paper, but referring to environmental, social, and governance reporting) improves management within companies.