Is Corporate Sponsorship Philanthropy?

ImageReaders, today there is a debate about funding, the arts, ethics and government support.  The discussion around whether an organisation which has a corporate supporter has the “right” to terminate that relationship is becoming politicised, particularly by the Minister for the Arts, Senator Brandis, who has written to the Australia Council asking them to review their policies relating to organisations which “unreasonably refuse corporate support” but continue to seek Government funding.

I find this extremely disturbing.  In a time when ethical investing, impact investing, and the idea of understanding where our dollars are invested in order to further strategic philanthropic goals is growing in importance, it seems a strange disconnect to me that an organisation is being criticised for its decision to take an ethical stance on a particular issue.  See  this from the Sydney Morning Herald and this radio transcript from an interview this morning.

Corporate sponsorship serves a different purpose from philanthropy.  Sponsorship is a commercial transaction whereby both parties gain some form of benefit – usually for the sponsor it is that intangible goodwill, good corporate citizen kudos, as well as the opportunity to get their name in front of an audience, and benefits for staff (free/discounted tickets, opportunities for volunteering, engagement in matched giving etc).

Philanthropy in its truest sense is the giving of a gift for no visible or material return (unencumbered by the desire for publicity, recognition or brownie points – though no doubt all foundations and philanthropists would love this as a side benefit).

For a corporate sponsorship relationship to succeed there needs to be an alignment of values for both organisations – in the end, the relationship is not about the exchange of cash, though that is of course very important – but it should be about providing a resonance between the two organisations.  Most likely in this instance, this was originally the case but circumstances have changed for the sponsoring organisation, and for the issue at the heart of the matter (the treatment, and offshore detention of refugees/asylum seekers).

I do not want to get into the tintacks of the specific case, as it is highly emotive.  But I would hearken back to the days when tobacco companies were gleeful supporters of the Australian Ballet and sporting events.  (I am taking a sentence here from wikipedia, so forgive my laziness:) “In 1992 the Tobacco Advertising Prohibition Act 1992 expressly prohibited almost all forms of tobacco advertising in Australia, including the sponsorship of sporting or other cultural events by cigarette brands”.  If this Act were not in place, would it now be considered “unreasonable” for cultural organisations to refuse funds from the tobacco industry on grounds of political correctness or health awareness or simply not wanting to be associated with products that are known to have harmful effects? Or under the Minister for the Arts’ proposed code – should they just take the money and shut up?

The topic is complex (or not – depending on where you sit – and depending whether you even care about the arts receiving funding – as so many people who comment on the articles about this appear to be) but I think this is an important debate and I would love to hear your views.


About ozphilanthropy

#Philanthropy. #arts Posts by Sharon Nathani, PhD candidate at the Centre for Social Impact, Swinburne focussing on philanthropic funders of the arts. Sharon's study is supported through an Australian Government Research Training Program Scholarship.
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4 Responses to Is Corporate Sponsorship Philanthropy?

  1. johnofoz says:

    Indeed, a rather vexed question. For sponsorship there is nearly always mutual benefit. For philanthropy, hopefully, no strings are attached. In both cases, however, the most important and potentially problematic issue is influence. I would expect any arts, charitable or research organisation to have policies in place to guide them in handling matters of sponsorship and philanthropy. Policies can only go so far, however. Should one sometimes let the end justify the means? Or perhaps occasionally let the heart overrule the head?

    The question could be asked how long, or what, is required to launder money? Like some insurance, money has a long tail. Should one eschew support from people such as Sir Peter Moores, son of the Littlewoods founder. Although the family has no current ownership of the publicly listed Littlewoods, there is no question the wealth stems from the business of gambling. An Australian example might be Simon Ainsworth, a man who, as I understand it, felt strongly enough about the poker machine industry to distance himself from the family firm and find his way through other endeavours. He is perhaps best known for his Eden Gardens venture. He is a significant supporter of the community and a philanthropist supporting many. Much of his activity flies under the radar. I doubt there are many, if any, who would refuse support from either of these men’s foundations notwithstanding money having originally come from activities which cause far more pain and suffering than, for example, questionable refugee policy. Perhaps, too, one should not look too closely at the histories of the Rockefeller, Carnegie or Frick families lest questionable business practices come to light.

    In a large proportion of cases philanthropic support from companies comes via foundations. These have separate boards, or trustees, from the companies from which the money, in the first instance, stems. Although it does not completely remove the possibility of influence, this separation should, I suggest, be sufficient to overcome most concerns. It is best not to be too precious about it. So, I would be happy to receive support from Nestle, even though I may have concerns about infant formula marketing in Africa, from Macquarie Bank even though I don’t like some of their banking practices and yes, even from the Transfield Foundation. As a student in the 1950s I worked at the Port Kembla steel works where a youngish Transfield provided basic services. They made their money by good honest toil. That the firm’s founding families wish to give something back should be applauded. Would that there were more like them.

    • Thank you for your thoughtful comment John. It is certainly not a black and white question – and every sponsored organisation needs to have clear policy and guidelines on where they draw their own lines. If one takes a purist view then all funds can be seen as tainted in relation to some issue. It can also be difficult to separate the chain of relationships, from the sponsoring organisation, whom it deals with, where it is invested, how our super funds are related, who we bank with and who they deal with and invest in etc.

      But I strongly believe that the organisation being sponsored, and the artists and individuals who are involved in the event can make up their own mind about where they draw this line, and if they feel there is an ethical dilemma, they should be able to voice this. Government interfering in these types of relationships is a dangerous thing.

  2. ROSEMARY says:

    If we receive sponsorship money from a corporation, can we turn that around and use it for philanthropic donations, without using the sponsorship money to cover expenses for events and other organizational expenses?

    • Hi Rosemary, usually sponsorship is for a particular purpose and agreed to by contract. I am curious as to why you would want to use funds raised through sponsorship for another purpose when it is so difficult and time-consuming to achieve it for your own organisation.

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