The act of philanthropy by the business sector is the heartfelt passion for charitable initiatives undertaken through donating financial resources, goods, services, or employee time to support a range of social, environmental, and community causes.
By doing so, companies demonstrate their commitment to social responsibility and the well-being of the communities they serve for addressing crucial socio-economic challenges, typically centring around areas such as education, healthcare, environmental conservation, poverty alleviation, and other basic needs.
As corporations have increasingly recognised their influential role within communities, they are taking a proactive stance in becoming agents of positive change and contributing to the betterment of society beyond their core business activities.
In Pakistan, business giving has shown significant growth, with companies of all sizes adopting the practice of corporate philanthropy and corporate social responsibility (CSR).
In 2021, of the total 583 publicly listed companies, about 35pc reported giving donations for various social causes, collectively amounting to Rs16.76 billion
However, the adverse impacts of recent disasters have spurred a growing realisation among businesses that they must adopt a more responsible and diverse role as corporate citizens.
Moreover, as Pakistani firms engage in international business, there is a growing understanding that CSR efforts enhance brand image, drive sales revenues, and boost profitability. Consequently, there has been a notable increase in corporate philanthropy in recent years, with some large conglomerates establishing their non-profit arms dedicated to regular CSR initiatives.
Despite these positive developments in the business sector, Pakistan’s level of corporate philanthropy remains modest compared to developed nations, which demand greater investment in social and community programs to bring a larger impact on people’s well-being.
The available evidence on the contributions of the business companies towards various social causes has been manifested and documented by the Pakistan Centre for Philanthropy (PCP) since the year 2004. Its recent corporate philanthropy survey report 2022 sheds light on the philanthropic giving of different types of companies in Pakistan, including public listed, public unlisted, and private limited companies in the form of volume of donations and sectoral contributions as a percentage of pretax profit.
Incentivising philanthropy through tax credits and highlighting areas where donations are needed the most can enhance the returns to corporate giving
In 2021, of the total 583 publicly listed companies, about 35 per cent reported giving donations for various social causes, collectively amounting to Rs. 16.76 billion.
Further evidence on the pattern of corporate giving indicates that if all profit-earning companies were to donate, the volume of corporate philanthropy would increase significantly. This means that the untapped potential of corporate philanthropy needs to be harnessed to raise the level of social investments in the country.
In this regard, a three-pronged strategy may be feasible to achieve positive results. Firstly, publicising the contributions of top-ranked giving companies can inspire and motivate others to follow suit. Secondly, creating awareness about the need and benefits of corporate giving can encourage businesses to engage in charitable activities. Lastly, incentivising philanthropy through tax credits and highlighting areas where donations are needed the most can enhance the returns to corporate giving.
The Pakistan Centre for Philanthropy has already taken steps towards implementing parts of the proposed strategy, such as giving awards to top donors to acknowledge their contributions and publishing information on credible non-profit organisations through its certification programme that is helpful to building connectivity and synergy between corporate and the non-profit sector in the country.
Given the above-stated fact, it can be envisaged that responsible corporate citizenship and purposeful philanthropic ventures of the business sector can not only contribute to the betterment of society but also reap the benefits of increased employment and revenue growth. With collective and harmonious efforts, business giving can play an active role in shaping a brighter tomorrow for all.
The writer is a senior programme officer at the Pakistan Centre for Philanthrop
Published in Dawn, The Business and Finance Weekly, August 7th, 2023
