Thursday, September 26, 2013

Should Your Firm Donate to Charities?

Unless there is a miraculous change in the human condition, there will always be people in need. "The economic problem" suggests that demand for goods and services will always exceed the capacity for most individuals and countries to fulfill that demand.

In other words, our human wants and needs exceed the ability for an economy to provide for them. It becomes a matter of balancing priorities or what is known as the "guns or butter" argument ... do we spend money on guns or butter?

Obviously we have needs that must be fulfilled eg, the need for food, shelter, warmth when it's cold or cooling when it's hot. In some African and other countries, people do not have sufficient food or medical facilities despite decades of donations. Even in prosperous, so-called first world countries like the USA, UK and Australia, there are still homeless people and kids who go to bed every night without having had a decent, nutritious feed.

The question becomes, what obligation is there on those of us who have more to give to those who have less? What obligation is there on firms to donate?

My view is that there is no obligation to help anyone. However, it is part of our altruistic nature to help each other, given that there is nobody or nothing else that can help us. None of the thousands of gods who have been revered throughout human history has been inclined to help, including the current one. If we don't help each other, then our humanity is lessened and after all, if we help people in need today, they may reciprocate if we need help tomorrow.

Firms who donate do so because they think it is the right thing to do. Their owners and managers believe in altruism. Some donate to meet religious obligations. Whatever the reason, donating to those in genuine need helps take pressure off society and improve the lives of others.

Does your firm donate? If not, do you think it should? Why?

Robin

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