Tuesday, January 04, 2005

On charity, criticism, and the tsunami disaster

Babble on.

Any time I receive criticism from someone whose opinions I generally respect, it's cause for reflection. My recent post comparing the corporate responses of the Royal Bank of Canada and Pfizer to the tsunami disaster garnered attention from both Matt Fenwick of Jerry Aldini (in my comments) and Kevin Jaeger at Trudeaupia (in his own post).

Matt's criticism seems best summed up by this question:

...do we really want to foster an environment where corporate giving is a no-win situation (at least in terms of the optics)? I prefer the approach of the Sally Ann bell ringers: no matter what the donation, it's "Thank you", and "Merry Christmas".

Kevin is a little more pointed when he says:

And I think posts like this one [Babbler's as referenced above] dissing the Royal Bank particularly grate. I have no doubt the employees and shareholders of the Royal Bank are every bit as moved by the scale of the tragedy as I am. They are accepting donations from all of their branches where their customers will no doubt donate millions and they've kicked in $100,000 themselves so far. And who is to say that is all they will do or all they will give? As a bank they may reschedule or forgive loans in the affected countries, provide emergency loans and issue favourable terms for reconstruction. And who know what their thousands of employees and shareholders are doing individually? Their initial donation will save lives now and this is hardly something to criticize.

As usual, these two pundits have put some thought into the matter, and they certainly raise some valid concerns. I certainly don't want my post to contribute to a culture that discourages any kind of corporate giving because companies are 'damned if they do, damned if they don't.' And I don't want to minimize the fact that RBC made a contribution, however small in relative terms, because Kevin's right: it will save lives, and that's a good thing.

So here's a hearty cheer for all who contribute, to whatever degree, and in whatever capacity, whether as individuals, corporations, or groups of any kind. All help in a time of need must be appreciated.

There are a couple of points where I might disagree with Matt and Kevin, however.

First, relief for this disaster is not equivalent to sponsoring the 17th Annual Charity Golf Tournament for Literacy or some such 'ordinary' charitable effort. I thought I'd said as much when I stated that "for a cataclysm of unprecedented size, unprecedented measures are required." So in this particular case, I don't believe it's germane to look at the entire panoply of a company's charitable giving. In my opinion, this disaster falls outside of that scope. I think that should be true of individuals as well: just because you give to United Way, or sponsor someone in the Run For The Cure, doesn't mean you shouldn't dig into your wallet for this extraordinary event.

Second, I won't apologize for encouraging, cajoling, or shaming people or corporations into giving as much as they possibly can. I believe a capitalist society with a limited government, which I very much support, is balanced only by the compassion and charitable instincts of its citizenry. I also believe sometimes those charitable instincts need to be tweaked. Each of us as individuals has to battle our own selfish desires and everyday concerns to find it in ourselves to give. For corporations it's doubly difficult, for they have no conscience - although those who run them should - and they are beholden to shareholders to be somewhat selfish and return as handsome a profit as possible each year. The question of how exactly one should go about tweaking these instincts is open to debate, but I've chosen my method and gone about it here.

As a shareholder in RBC, as a lifelong customer of RBC, as a friend and relative of quite a number of RBC employees, and as a member of the society that has fostered the growth and profitability of RBC, I encourage those who make this sort of decision at RBC to rethink the size of the donation. I cajole them to look at their own bottom line and see if they can find some more cash under the mattress to contribue. And I shame them by pointing to a company like Pfizer and asking if they really want to get beat out by a company best known for putting some backbone into a man's frontbone.

I do all this not to be critical for the sake of being critical, but in the hopes that one of the few world-class companies in all of Canada will make us all even more proud by not only being a contributor, but being a world-class contributor to the relief efforts.

Babble off.


At 8:23 p.m., Blogger treehugger said...

Sorry, Damian but you are being much to hard on yourself. Both of the opinions you site are being petty. In this age of corporate transparency, governance and citizenship, companies have a responisibility to their customers and yes their shareholders to be leaders in tragic events like the tsunami.

You know what else, by not being a tight-wad, as RBC most certainly was, it actually creates good PR and Investor Relations for any company, not to mention one of our major banks who could use a dose of good corporate citizenship. What shareholders, both institutional and retail don't like is ridiculous renumeration to company CEO's by way of stock options or other less scrupulous incentives. They certainly will not complain if a resonable and responsible amount of money is donated to an epic disaster. It builds the corporate image and actually fosters shareholder value. Being a cheapskate produces the opposite result. You were right.

At 10:19 a.m., Blogger Sacamano said...

The real stinginess is not with major catastrophes like the Asian Tsunami or the Ethiopian Famine. When disasters are splashed on TV, people give in droves. And I'm glad they do.

But consider that every single month more people die of malaria (165,000+), AIDS (240,000), and Diarrhea (140,000+) than recent estimates for the Tsunami. Every single month.

One problem of cajoling people to give more to a single splashy cause is that other causes (often more worthy but which receive less media coverage) get neglected. It happens every time.

Some nice observations from the article linked above:

"Jeffrey Sachs, the Columbia University economist, estimates that spending $2 billion to $3 billion on malaria might save more than one million lives a year. "This is probably the best bargain on the planet," he said.

The outpouring of U.S. aid, private and public, for tsunami victims is wonderful. But, frankly, the affected nations will get all the money they can absorb for the moment, and Thailand, Indonesia and Sri Lanka are far from the worst off in the world.

"The really big money can be better and more usefully absorbed by developing good health and education programs in the poorest countries," noted Nancy Birdsall, president of the Center for Global Development. "But that's not as visible or heroic."

"The best response to accusations of stinginess is not to be defensive, but to be generous. And the measure of generosity is not what you offer when the spotlight is upon you, but what you do when the spotlight moves on."

At 10:50 a.m., Blogger Shamrocks! said...

First off, I'd say that I've blogging non stop about the contributions of all the nations and charities giving money, and I'm happy that the contributions are increasing.


Corporations aren't charities. They are businesses. They are purely for making money, and all other benefits (there are many) are bonsuses. What about the many shareholders who don't want their cash being used in this manner? Maybe they want their money to be donated in their own way. Maybe they don't feel that giving it to xyz charity is the best way to contribute. Shareholders shouldn't be compelled to give.

PS: The Royal Bank is probably the worst bank on earth. If I had a nickel for every RBC horror story I've heard it might cover all the service charges they've nicked from my accounts.

At 11:04 p.m., Blogger Jaeger said...

Oh, you can disagree more vigorously than that.

I certainly don't object to encouraging, cajoling and prodding. But they coughed up a pretty decent amount pretty quickly considering most of the people authorized to approve any larger amounts were probably away on vacation. You do appreciate just how much bureaucracy a company that size has to wade through to cut a cheque, right?


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