More firms are seeking ways to contribute to the community, but the Republic has a long way to go to emulate philanthropic practices in the UK and US, writes John Downes

Overcharging. Financial mismanagement. Insider dealing. Sweatshop labour. It is a fair enough bet that if you were to ask your classmates what the above words suggested to them, the names of several of the world's most high-profile organisations would come to mind.

Indeed, recent scandals mean that many companies, both here and abroad, are fully aware of the negative effect that bad publicity can have on their businesses.

One way in which they have sought to counteract such publicity is through the development of strong corporate social responsibility (CSR) policies.

Aimed at ensuring their businesses comply with industry "best practice", they usually involve a statement of the company's core ethical beliefs.

Frequently, they also involve a root-and-branch examination of all aspects of their business and seek to highlight the positive work that companies do.

But just how effective are such policies? Are they anything more than just a smokescreen to ensure companies are seen as socially responsible - whether this is the case or not - and what other ways can companies give something back to their communities?

One way for Irish companies to ensure that they are promoting corporate responsibility is through participating in Business in the Community (BITC), a not-for-profit organisation set up in 2000.

Offering a variety of services to members, including advice on how to draw up comprehensive CSR reports as well as how to increase their engagement with their local community, its 30 members include some of the Republic's largest companies.

According to Linda O'Sullivan of BITC, the organisation encourages companies to adopt a "strategic approach" to maximising their interaction with the communities in which they operate.

For example, where companies may have, in the past, just written a cheque to a charity or charities of their choosing, BITC advises them, where possible, to look not just at their financial resources, but at a "mix of ways" in which they can add to the community.

These can include the provision of technical/IT expertise, interview training, mentoring and employee involvement in local sport clubs.

There are a number of benefits for companies who adopt such an approach.

Firstly, it allows them to enhance their reputation and benefit the communities in which they operate.

Companies are also aware that creating a positive "brand image" can increase the likelihood that employees will stay with that company.

"It can increase loyalty to a company and helps create a sense of pride in the company," O'Sullivan explains. "It boosts morale and loyalty if you know that you work for a company that gives something back."

Unsurprisingly, O'Sullivan rejects the idea that many companies get involved in CSR simply to improve their bottom line.

While they are aware of the commercial benefits of retaining staff and improving their public image, they are also anxious to help the communities in which they operate, she believes.

"In my experience with companies, there is a genuine interest in giving something back to the community and also developing links with the community," she says. "They can see the benefits to their employees and the company, so I would argue that it makes good business sense."

Clearly, businesses, and the community in which they operate, have a lot to gain from being socially responsible.

But another way in which organisations - and individuals - can contribute is through philanthropic donations.

Philanthropy usually involves the donation of money or resources to charitable causes which aim to improve society. Such donations are frequently done through the establishment of a trust structure.

However, when it comes to philanthropy, the Republic has a long way to go if it wants to catch up with the UK and US, both of which have a history of the practice, says David Strahan of Philanthropy Ireland.

A not-for-profit company that offers referrals to legal experts and tax advisers, as well as an advice service, Philanthropy Ireland aims to help people think strategically about what they want to achieve with their money.

But, while the Republic does not have a long history of inherited wealth, the recent economic boom has meant there are significant numbers of individuals who have amassed meaningful wealth. Strahan's organisation aims to help them focus their charitable activities in the most efficient way.

"We also encourage very successful Irish plcs who have benefited from the surging economy to do what has happened in the UK and the US," he says. "For example, to set up 'arms length' charitable foundations to tackle strategically some of the problems facing Ireland in the 21st century."

There are a number of motivations for individuals and organisations to get involved in philanthropy, Strahan believes.

Firstly, many have a desire to "give something back" to the society that helped them to create their wealth.

Frequently, individuals also realise that, while their success may have been built on a lot of hard work, they have also had a significant amount of luck in getting to where they are today.

From a company's point of view, involvement in philanthropy can increase its "brand image", Strahan acknowledges.

But he points out that, if the only real motivation is to increase its profit margins, "most people wouldn't see that as giving something back".

Philanthropy has to some extent become "best practice" in the UK and the US, he says. But the Republic still has some way to go to catch up.

"[ In the UK and US] They have recognised that business needs to be a central player in the development of civil society and society at large," he says.

"We need to endorse that and take it on board... corporate Ireland really needs to step up to the plate."