What effect does corporate philanthropy have on customer trust, customer loyalty and shareholder value?

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This is an excellent question and research shows us that the answers are all over the board, depending on the kind of company, the context, the kind of corporate philanthropic efforts and so forth. But the real question here is, can companies make more money by doing good? The answer is yes, if they carefully judge the interests of their customers as well as their other publics and constituencies. The same kind of an answer might apply not just to corporate giving but also to a company's green efforts and attempts at otherwise being good citizens, because that's really what the question is about -- can we do better as a company in terms of our business and our bottom line if we behave as good citizens? The answer is yes. If we can show that we are a better place for people to work and a better place for people to do business, then it stands to reason that we'll also be good for our community. So being good citizens, and making it clear that we are, is probably a great way to help the bottom line, customer trust, customer loyalty and, by extension, shareholder value.

This was first published in October 2008

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