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January 03, 2005

Should corporations give?

A few years ago I happened upon the concept of Tzedakah.  It has to do with the way we as people give to others in need.  I hope you will read it, and then help me work out how it relates to if and how corporations should give to others.

The Eight Degrees of Tzedakah

There are eight degrees of giving tzedakah (doing justice), each one higher than the last.

The lowest degree is when one gives grudgingly, reluctantly, or with regret.

A higher degree is when the donor gives less than is required by the poor person, but does so willingly.

A still higher degree is when the donor gives what is required by the poor person, but only after being solicited.

A yet higher degree is when the donor gives before being asked.

The fifth and higher degree is when the recipient knows the donor, but the donor does not know the recipient.

The next degree is when the identity of the donor is not revealed.

A higher degree of tzedakah is when both the donor and the recipient are anonymous.

The highest degree is when the donor helps the recipient become self supporting by means of a gift, a loan, or by finding employment for the one in need.

-Moses Maimonides, twelfth century Jewish philosopher

My mom taught me early in life that it is wrong to make a big deal out of helping others, and it is especially wrong to do it just to get the recognition.  I doubt if she had heard about Tzedakah, but she got the idea of it. 

So then, does this apply to corporations?  I believe corporations are a strong force in making the world a better place - they provide jobs, they bring people together into communities and ultimately they are simply groups of people working together.  But should they as an entity make charitable donations or should they leave that to their shareholders and owners?  I can see it both ways.  What do you think?  Don't be shy, please comment.

Whether you choose to help others as an individual or through your company, I'd like to suggest one way that is as close to level eight as I can figure.  Heifer International is a non-profit organization that will take your donation and will turn it into a cow, or a pig or a goat that will go to a person in need.  That person can use the animal to support their family, and part of the deal is that they then are supposed to share the offspring of the animals with others.  It is self-sustaining and Heifer seem to do a good job of making sure most of the money they collect actually gets to the people they are trying to help.  It's as easy to give to Heifer as it is to buy a book on amazon.com. But if you do it, don't tell me or anyone else about it.  Do find a way to pass on the idea though.

In the United States in just a few generations we have prospered to the point where most of us have too much to eat.  There are still too many starving children around the world.  (One is too many)

January 3, 2005 in Entrepreneurship | Permalink


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Absolutely Terry. Corporations are community leaders too, both in the sense of the community of employees that work for them and within the cities and communities they do business.

Good companies have corporate values and that means displaying and holding to those values both internally and externally. This may mean doing the right thing within a business transaction, but in my mind, it also means doing the right thing within the community by being involved and promoting activism, volunteerism, and charity. Often this means leading by example.

I worked for CarreerTrack years ago when Jimmy Calano was still in charge and they had a written volunteerism policy where you could 'donate' a few work hours every month to a volunteer program of your choice. In addition, they organized several volunteer programs every year.

This isn't a direct money donation, but often the time commitment is harder and even more important.

Just like personal budgets, corporations have to balance charitable efforts with profitability and other employee and shareholder concerns. It wouldn't make sense to donate $100k to the tsunami relief and at the same time layoff 4 people. But corporations have more to donate than just money.

Having a volunteer program, for example, doesn't have a direct cost aside from the lost opportunity. But sometimes utilization is down and there is just no opportunity to loose.

This also makes people feel good about themselves and the company they work for. It promotes a fun work environment. And the leadership that corporations show builds giving of the general community.

So, in a nutshell, I think it is good for corporations to give.

Posted by: Jason Groshart | Jan 4, 2005 4:03:50 PM

Corporations are not people, so really it's the stock holders who should do the giving. Furthermore, corporate giving is open to abuse by its representatives and officers, as frequently witnessed in the business press.

Berkshire's program is one of the few reasonable approaches I can think of.

Posted by: T Lindgren | Jan 7, 2005 3:22:37 AM