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How Strategic Philanthropy
Builds Brands
Letter to Harvard Business Review responding to Michael
Porter and Mark Kramer's article "The Strategic Advantage
of Corporate Philanthopy," available through HBS
Publishing.
Three cheers for “The Competitive Advantage of Corporate
Philanthropy.” Corporate managers have underestimated
philanthropy’s benefits for too long. Porter and Kramer
avoid the usual arguments about moral obligation and focus
instead on competitive advantage. They dismiss marketing that
tries to create a kinder, gentler image by promoting the link
between corporate and nonprofit brands but adds nothing to
the business itself.
However, in their desire to move corporate charity away
from promotion, the authors neglect to mention the very real
value of philanthropy to brand building. They use Cisco Systems’
Networking Academy as an example of business building: By
providing a free networking curriculum to schools, Cisco is
not only contributing to education, it is also ensuring an
ongoing supply of skilled maintenance people who can service
Cisco equipment.
What Porter and Kramer neglected to say is that Cisco also
features Networking Academy advantageously in its branding
efforts. A powerful 1997 television commercial featuring Networking
Academy first ran in Washington, DC, positioning Cisco as
a good guy to regulatory audiences. The same commercial was
later used in other cities to recruit students to Networking
Academy training courses, reinforcing Cisco’s brand
vision of making communication available anywhere to anyone.
The tradition of using Networking Academy as a brand-building
tool continues today: Cisco’s 2002 annual report contains
four photographs identified as Networking Academy graduates,
visual reinforcement of its contribution to the global community.
Brand building is yet another competitive advantage of the
“enlightened self-interest” that the authors define.
The cause-related marketing efforts of the past may have been
dismissed as transparent efforts to improve a company’s
image, but that doesn’t mean that corporate philanthropy
should have no place in branding. A brand-building effort
based on a philanthropic effort must simply follow the same
rule that Porter and Kramer lay out for the philanthropy itself:
The branding effort behind the philanthropy must be “closely
linked to the competitive context.”
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