Implications for Practice

The results of this research study have important implications for business practitioners, charity organizations, charity beneficiaries, and governments. Business practitioners, SMEs’ owner-managers in particular, have the opportunity to read an empirical study that investigates the role of philanthropy in SMEs. The results of this study are expected to provide novel information ranging from motives and intent behind philanthropy, to philanthropic practices, to barriers to philanthropy, to ways of boosting philanthropy. Based on the results of this study, SMEs can identify areas or philanthropic activities that need to be sustained, if not scaled up, and those that need to be improved. Put differently, the results of this study are expected to enhance SMEs’ self-awareness with regard to philanthropy. This self-awareness might result into two potential scenarios: (a) SMEs that are intrinsically motivated in supporting the local community through philanthropy and are not concerned with its impact (positive or negative) on their business, are likely to continue pursuing altruistic philanthropy; (b) SME that have dual motives

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in undertaking philanthropy—that is, partly intrinsically motivated to help the local community and partly extrinsically motivated to create business value—might either migrate to scenario #1 or (c) retain and intensify their dual motives’ strategy.

Regardless of the motivation behind their philanthropy, SMEs may need to undertake certain steps to enhance their philanthropic activities. First, SMEs need to put in place policies and strategies to guide their philanthropic process. By having policies and strategies, SMEs will have the opportunity to identify causes and initiatives that they are supporting; in turn, this can be useful in directing their philanthropic activities to those groups and organizations that need most. Second, SMEs should keep record of key, if not all, philanthropic activities that they undertake. This can serve as a great treasure when making decisions pertaining to philanthropy. At the same time, SMEs that keep receipts of their charitable donations have the opportunity to claim tax credits; in turn, proceeds from tax credits can be reinvested in the business or they can be used to support more needy people. Third, SMEs should diversify their philanthropic

activities by focusing on things such as volunteerism and pro-bono services, which can have a larger impact and require less resources in comparison to monetary and product donations. Some of the pro-bono services to consider include establishing an apprenticeship program to train unemployed and disadvantaged people. Indeed, a potentially effective strategy for diversifying philanthropy is by sharing information and knowledge with other businesses (both SMEs and large enterprises), nonprofit organizations, and academicians. Fourth, SMEs ought to improve communication regarding their philanthropic activities within their organizations. In other words, SMEs’ owner-managers should involve employees in their philanthropic practices. The

involvement of employees can create multiple benefits for multiple entities including SMEs (e.g., increased productivity and reduced turnover), charity recipients (e.g., more donations), and

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employees themselves (e.g., increased job satisfaction). Finally, SMEs should reach out to nonprofit organizations, governments, and, if necessary and possible, the beneficiaries. By coordinating with other important stakeholders, SMEs can address some of the challenges that they encounter in the process of philanthropic giving such as overwhelming requests and low trust. The former challenge, volume of requests, can be addressed by bringing on board more businesses on the bandwagon of philanthropy as well as avoiding duplication of support to the same recipient; and the latter challenge can be tackled by verifying the authenticity of donation recipients through government agencies and nonprofit organizations.

Apart from business practitioners, the results of this research have important implications for charity organizations. One, charity organizations should know that most SMEs rarely

communicate their philanthropy externally. This means that charity organizations can extend their donor base by recruiting new SMEs’ donors, which in turn can reduce pressure on existing donors. Two, it appears that SMEs are mainly intrinsically motivated to undertake philanthropy and hence personal interests and characteristics (e.g., altruism, personal experience, personal satisfaction, need to empower others, and religious beliefs and values) of the owner-manager or employee play a significant role in the decision to donate. As a result, charity organizations should attempt to get insights regarding the main motives driving philanthropy among the different SMEs; charity organizations can use the insights gained to target their appeals for donations to different SMEs. Three, charity organizations should strive to build strong and cordial relationships with (SMEs) donors. This relationship should be cemented by values such as trust, accountability, and transparency. This can be actualized if charity organizations report back to donors how they have utilized or distributed their donations or they can even go a step further and involve donors directly in some of their activities. It should be noted that the price of

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failing to establish and maintain good relationship with donors can be high since it may lead to decrease in donations and even donor fatigue (Polonsky et al., 2002; Bekkers & Wiepking, 2011). Finally, charity organizations should partner with SMEs in addressing societal needs and challenges. Business-nonprofit partnerships can lead to sharing of information and knowledge, which can enhance the efficiency of each sector in addressing societal needs and challenges.

Alongside business practitioners and charity organizations, beneficiaries have a role to play as well. Despite the magnitude of the challenges they face, beneficiaries’ interests can be better served if they are trustworthy. Thus, beneficiaries should strive to develop a relationship that is based on trust with charity conveyors (donation intermediaries) and donors. At the same time, beneficiaries should consider aid as an emergency stop-gap measure. In other words, they should explore ways in which they can earn a source of living on their own.

Finally, policy-makers should appreciate the contribution of SMEs in community development and particularly in addressing poverty either by providing philanthropic donations or by offering employment opportunities to disadvantaged people. As a consequence, policy- makers should take steps to encourage SMEs to sustain their support for local communities. More importantly, policy-makers should coordinate their efforts geared toward addressing societal needs and challenges with businesses, and SMEs in particular, as well as the non-profit sector.

On the whole, it is important for all sectors to focus on the goal of nurturing the

capabilities of disadvantaged groups through educational programs that provide them with skills that can be useful in the job market. That is, the ultimate goal should be to make the less

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