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Tuesday, March 19, 2024

Corporate social responsibility and charity are not the same thing

Charity is an incredible thing. It’s a way for us to show we care for one another, and it provides resources and aid to those in need both domestically and internationally. It has changed the lives of thousands every year, from building homes for Hurricane Katrina victims in 2005 to providing medical care to Ebola virus patients in West Africa in 2014.

Corporations can be large sources of funding for charities. According to Forbes magazine, Wal-Mart Stores Inc. gave more than $300 million in charitable donations in 2012. 

What I find troubling about this isn’t the notion of giving to charity. I think that’s great. 

Rather, it’s the surprisingly common misconception that philanthropy is somehow synonymous with corporate social responsibility.

Corporate social responsibility is defined by Investopedia as “corporate initiative to assess and take responsibility for the company’s effects on the environment and social welfare.” 

Corporate social responsibility is the concept that it is a company’s duty to mitigate negative social and environmental effects caused by the company. Sure, philanthropy can be a component of corporate social responsibility. A company can be a good corporate citizen by donating to charities that foster positive change in its surrounding community. 

However, if that same company largely exploits people, environmental resources or both in its operations, it cannot be considered socially responsible.

An example of such a company is the department store chain J.C. Penney Co. The company gives to a number of excellent charities, including the Boys and Girls Clubs of America and America’s Military Youth programs. 

But it was also one of the retailers whose products were manufactured in Rana Plaza, an office building in Bangladesh that collapsed in 2013 after its unsafe conversion into an industrial facility. The collapse killed more than a thousand people and injured thousands more. 

Many of the clothing companies involved in the collapse pledged to help raise $40 million toward restitution funds for its victims. But after a year only one-third of the money had been raised, and J.C. Penney Co. had not contributed to the fund, according to Forbes magazine.

I would like to clarify that I am not trying to demonize J.C. Penney Co. I am merely using it as an example of a problem that can be found in many corporations. 

Chevron Corp. makes philanthropic donations to the communities it operates in, yet it refused to accept blame for an oil spill in Ecuador in 2011, despite the fact that it polluted a large rainforest and caused illness within surrounding populations of people.

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Corporate social responsibility is not the act of balancing an ethical checkbook. 

Donating corporate profit to a charity means very little if that profit was attained by causing significant harm to the lives of people and the environment. 

Perhaps instead of funneling money into highly publicized philanthropic causes, companies should focus these efforts inward.

Namwan Leavell is a UF economics junior. Her column appears on Fridays.

[A version of this story ran on page 7 on 1/16/2015 under the headline “Corporate social responsibility and charity are not the same thing"]

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