• 09.16.10

Philanthropy Is the Gateway to Power

While catching up with old episodes of “Mad Men,” I was brought up short by a show-stopping quote from Roger Sterling. Sterling, the senior partner at the Sterling Cooper Agency, tells Creative Director Don Draper that he’s been invited to join an arts foundation board. Looking puzzled, Don asks “What does that mean?” Without skipping a beat, Roger says “Philanthropy is the gateway to power.”

Roger Sterling

skipping a beat, Roger says “Philanthropy is the gateway to power.”


Then he
elaborated: “There are few people who decide what will happen in our
world. You have been invited to join them–pull back the curtain and take your

And so it
was. For generations, traditional philanthropy was the exclusive domain of the
wealthy and powerful. Many of the great benefactors of the early 20th century
made their fortunes from the railroad, steel, and oil industries. These
industrial giants sat on boards of nonprofit foundations that they themselves
established to oversee how their treasure troves would be dispensed. They
determined which causes were worthy. Much of the philanthropic activity was
focused on large, sweeping gifts to benefit big institutions like the New York
City Public Library, the ballet, universities, and art museums.

How times
have changed. Many of today’s entrepreneurs are building their businesses based
on the idea of fulfilling a new kind of social contract, one in which
organizations voluntarily take responsibility for the “triple bottom
line”: people, planet, and profits. While corporate social responsibility (CSR)
is not a new concept, it has new meaning in a Web 2.0 world. For consumers, the
Internet and social media deliver a kaleidoscope view of a company’s corporate
culture. Given this new insight, consumers are exercising their right to
patronize companies with values that mirror their own.

today have to address questions that are external to their core business. Does
the organization have a moral compass?
Does it support worthy causes? Is it a good corporate citizen? Stepping back and taking a fresh look also
gives brands a great opportunity to redefine themselves and optimize for the
future. It should come as no surprise to corporate America that CSR has become
a talent magnet, a sales magnet, and an investor magnet.

How is CSR
a talent magnet?
Research is revealing the none too startling
news that people want to work for caring and ethical employers. According to
last year’s study by Kelly
Services Inc
., acting in a socially and environmentally responsible manner
is what it takes to gaini top talent. Nearly 90 percent of respondents said
they are more likely to work for an organization perceived as ethically and
socially responsible. A more recent study opened eyes by revealing that one-third
of workers would take a pay cut to work for a socially responsible firm.

How is CSR
a sales magnet?
Globally conscious consumers are
changing the rules about consumerism. A 2010 CSR Branding Survey noted that
consumers are much more likely to purchase a product with an “added social
benefit.” We are experiencing a trend in which consumers want companies to
meet their needs and simultaneously have a positive impact on society. And why
not? Enlightened consumers want
their food to be organic, their coffee free trade, their purchases sustainable,
and everything to be green. They
are even willing to pay a premium for goods from socially responsible

How is CSR
an investment magnet?

A slew of books and
articles have come out recently that articulate the value of socially
responsible investing, including the ubiquitous “Socially
Responsible Investing for Dummies.”
premise is that
companies can do well financially by doing good. SKS Microfinance is an example
of this concept. A recent New
York Times article
noted that SKS is aiming to raise $344
million in an initial public offering. This is being closely watched to
determine if big profits can be made through the small micro-loans that are
changing the lives of thousands of entrepreneurs in the developing world. The
early financial results looks good. Socially responsible investment funds
largely outperformed their benchmarks in 2009, according to Social
Investment Forum


corporate giants of our time are starting to follow in the footsteps of their
industrialist predecessors. While yesterday’s philanthropists were Getty,
Guggenheim, Astor, and Carnegie, today’s benefactors are Gates, Buffet, Turner,
and Moore. These great leaders are working from a platform of social
responsibility, and have started to address some of the most intractable
problems of our time such as poverty, global illiteracy, and disease.

The next
natural evolution of this trend is the new “social enterprise,” a
social mission-driven organization that applies market-based strategies to
achieve a social purpose. In Andrew Carnegie’s 1889 essay “The Gospel of Wealth,”
he stated that business and the wealthy are the caretakers of our future
society. At the time Carnegie’s
ideas were the exception rather than the rule. Today, many small and large companies
are still new to CSR. If the social enterprise enjoys financial success, CSR
can become a fundamental principle for businesses rather than an afterthought.

To use a
quote from Winston Churchill that even Don Draper would appreciate, “We
make a living by what we get. We make a life by what we give.”

Charles is founder and CEO of BRANDfog, offering social media and corporate
social responsibility strategy (CSR) for CEOs. She is also founder and producer
of the Great Leaders Conference, an event honoring great leaders in CSR, social
advocacy, sustainability, and innovation; speakers include
Fast Company columnist Nancy Lublin, Yele Haiti Founder Wyclef Jean, Zappos CEO Tony Hsieh, Timberland CEO Jeff Swartz, among others.Fast CompanyEditor Robert Safian will help moderate Q&A sessions. Register
today at Great Leaders Conference.

About the author

Ann Charles is founder and CEO of BRANDfog (, offering Social Media, Corporate Social Responsibility and Social Capital strategy for CEOs. She is also founder and curator of the Great Leaders Conference (, an event honoring great leaders in CSR, social advocacy, sustainability, and innovation.