Philanthropy can be of different types, names, shapes and sizes, but its purpose essentially remains the same. The purpose is to do good for someone other than ourselves. However, the catch is: what we do for the greater good – we inevitably do for ourselves, since we are all a part of the same community. This applies to companies as well. In light of the 14th VIRTUS Award competition, presented by the Trag Foundation and open until February 25th, let’s take a quick look at the state of corporate philanthropy in Serbia.
What is corporate philanthropy?
Corporate philanthropy implies the company’s concern for the well-being of others, by investing time, funds, goods, services, knowledge and other values to a greater, common good. Unlike individual philanthropy, which is often driven by emotions and the desire to help someone in need, corporate philanthropy often takes a more strategic, long-term approach, that includes a greater number of beneficiaries and aims to develop the entire community.
There lies the strength of corporate philanthropy: increased capacities enable us to achieve more. Through socially responsible initiatives, companies can go beyond urgent issues and make progress in the fields that require a continuous effort, such as environmental protection, (re)construction of public spaces, infrastructure, education or culture, among others.
From global models to local visions
Looking back at the past 14 years since the VIRTUS Award was launched, we can observe tiny steps and giant leaps, depending on where we look.
First of all, the number of companies involved in philanthropic actions in Serbia grew over the last decade. The arrival of a large number of foreign companies strongly impacted the development of corporate philanthropy in this country. These companies introduced good practices and a clearer picture of what socially responsible business looks like. They also served as role models for domestic companies and enterprises. For a long time, philanthropic initiatives were almost exclusive to big corporations but, slowly and steadily, small and medium enterprises began to understand the benefits of such engagement. They saw that it contributed, not only to their positive image but also to the community in which they operate and we all know that if the community thrives, the business will benefit as well.
Likewise, the nature of philanthropic actions changed over time: from mainly financial donations to more and more cases of employee volunteering, knowledge sharing and partnerships between companies and the nonprofit sector. Corporate philanthropy has moved beyond “one-size-fits-all” solutions towards assessing community needs and co-creating tailor-made responses along with its citizens.
Although corporate philanthropy is on the continuous rise in the past decade, their efforts could always be improved. The preconditions for greater effectiveness of philanthropic actions are that they are, primarily, strategically planned and that they represent a coordinated effort of citizens, media, state and businesses, and their joint push towards a common goal.
Major barrier: legislative framework
Unfortunately, the legislative framework often represented an obstacle to the increase of philanthropic activities among the business sector. However, since 2019 we were able to contribute to two improvements in the legal and fiscal procedure. First, the non-taxable amount in scholarships and grants for pupils and students was significantly increased, encouraging more companies to invest in the future by supporting youth. The second improvement came with the publication of Instructions for obtaining tax incentives for donors, which further clarified the use of Article 15 of the Legal Entity Income Tax Law. These instructions were published to clarify the procedure of tax deductions, thus enhancing corporate philanthropy and corporate support to initiatives for the common good further. Fast forward two years and the key obstacles for corporate philanthropy in Serbia still remain similar.
Although the general incentives exist, their implementation is still insufficient. Many companies and enterprises claim that tax incentives are not their primary motivation to give however, they would surely instigate the level of donations to philanthropic initiatives. While we are waiting for the legislative system to be improved, we should do what we can to spark the philanthropic spirit in the business sector with what we have on offer. Paying attention to what was and can be done is playing a vital role in inspiring more action.
Highlighting good: the VIRTUS Philanthropy Award
For the 14th year in a row, Trag Foundation launched the VIRTUS Philanthropy Award competition in five categories, four of which are directly related to the business sector. The Call for Nominations is open until February 25th for all domestic and foreign companies, small and medium enterprises, media companies, corporate foundations and individuals to be nominated. So, shine a light on good examples and nominate the businesses and individuals that have contributed to the community’s well-being the most in 2020.