Traditional and strategic philanthropy: The small and medium enterprise perspective

The traditional philanthropy is defined as the result of the altruistic motives of business owners to help individuals or communities, whereas with strategic philanthropy, businesses strategically design their philanthropic activities by integrating such initiatives to their businesses to have a positive impact to their competitive context. There have been studies on large corporations that show that companies that are involved with strategic philanthropy are able to create more business and social value as compared to those that are simply engaged with traditional philanthropy. This study focuses on studying philanthropic initiatives of SME s to see if the same findings would be applicable to small organizations as well. A cross-case analysis on the four different SMEs of this study is shown to answer the propositions of the study. The first proposition is that SMEs that engage in strategic philanthropy provide more social value compared to those that engage in traditional philanthropy. The second proposition is that SMEs that improve their competitive context through their involvement with strategic philanthropy generates more value for the business compare to those that engage in traditional philanthropy. The findings, however, presented that it is not due to SMEs being involved with either traditional or strategic philanthropy that affect its ability to create more business and social value, but that there are different key factors. The first is that for SMEs, having more resources provides them with more ability to provide social value. Another factor is that the network or partners of SMEs also enable them to produce more social value. Lastly, Filipino values, such as pakisama or bayanihan as well as utang na loob also play roles that affect the output created by companies