Downsizing has transformed the management of corporate philanthropy in the United States. Forced to explain why businesses should give away money while laying off workers, contributions managers at hundreds of companies, including AT&T, IBM, and Levi Strauss, have come up with an approach that ties corporate giving directly to strategy. In those and other companies, philanthropic and business units have joined forces to develop giving strategies that increase their name recognition among consumers, boost employee productivity, reduce R&D costs, overcome regulatory obstacles, and foster synergy among business units. In short, the strategic use of philanthropy has begun to give companies a powerful competitive edge.
A version of this article appeared in the May–June 1994 issue of Harvard Business Review.
