On Monday, actor Paul Newman defended Goldman Sachs from charges that it acted improperly when it donated 680,000 acres of land in Chile to the Wildlife Conservation Society (WCS).

Former New York Times editor Judith Dobrzynski had argued on April 4th that the gift was inappropriate because Sachs had used shareholders’ money to fund a cause that its CEO strongly supported.  She also made the broader assertion that  "Much corporate philanthropy is far more aligned with [the CEO's] social ambitions than with shareholder interests."

Newman–who is the founder of his own successful cause-venture, Newman’s Own (love your light balsamic vinaigrette dressing), and founding co-chair of the Committee to Encourage Corporate Philanthropy–said that corporate giving "must deliver meaningful societal and business impact" and companies shouldn’t cower when their philanthropy accomplishes both.

All significant stakeholders in a company’s success –shareholders, employees and customers–are positively impacted by structured and focused corporate philanthropy initiatives. An engaged workforce that takes pride in its company creates a corporate culture that improves recruiting and retention, extends brand reputation, strengthens inter-employee relationships, and reinforces leadership and teamwork skills. Additional benefits accrue through enhanced consumer, government and media perceptions, which can encourage customer loyalty, grow business development efforts and provide a buffer against potentially negative news, respectively. Furthermore, helping to build a strong and stable social and economic infrastructure considerably strengthens a company’s business in the communities in which it operates.

Dobrzynski’s charge that Sachs’ giving is misaligned with shareholder interests is especially ludicrous.  Numerous studies, including those conducted by Boston-based Cone, Inc., have shown that consumers want and expect companies to give back. 

Nor did Sachs ride rough-shod over shareholders to fund a pet project.  According to a Sachs board member familiar with the situation,

Virtually all of the comments Goldman Sachs has received on its environmental initiatives and the donation of the 680,000 acres have been positive. These included many very positive comments from shareholders, clients, members of the firm and prospective members. At the meeting, our shareholders overwhelmingly agreed, with less than .01% of them supporting the resolution that questioned these procedures.

One of the big challenges for a cause marketer is convincing business owners that it’s all right to benefit from philanthropy.  Many have only given discreetly, and are uncomfortable with anything that seems self-serving.  But a nonprofit benefits most when their for profit partner is energized by what can be gained from the relationship and strives to maximize the opportunity.

The alternative is to have a business partner that may be like my first girlfriend: not really into you.  And they’re not because–surprise, surprise–they’re focused on running and growing their business!  That’s why everything a cause marketer does should be focused on achieving the business owner’s goals first.  I guarantee if you do this, you will be duly rewarded.

That’s why I love working with small and medium-sized businesses.  Everything they do is–has to be–about growing their business.  They have no time for charity.  But they do understand how strategic philanthropy can make a bigger pie for everyone, including themselves.

Technorati tags: cause marketing, Committee to Encourage Corporate Philanthropy, cone inc., corporate giving, corporate philanthropy, corporate social responsibility, goldman sachs, Judith Dobrzynski , newman’s own, paul newman, wall street journal, Wildlife Conservation Society