Monday, March 21, 2011

Corporate disaster relief in Japan: going beyond charity?

With global attention focusing on the rapid escalation of conflict in Libya and desperate efforts to contain the nuclear threat in Japan, it is easy for the ongoing humanitarian crisis in the wake of the Japanese earthquake and tsunami to recede from view. But with reports of the death toll now edging past 18,000, and nearly 500,000 people still living in shelters, the country is still certainly in dire need of support and assistance - and will be for some time to come. A report from the World Bank has estimated that the damage inflicted by the disaster will cost somewhere between $123bn and $235bn, the equivalent of some 2.5% to 4% of the country's GDP. Recovery could take up to 5 years, the report suggests.

Business in Japan has been significantly damaged by the quake and its aftermath. The automotive and electronics supply chain, in particular, appear to have been severely disrupted, leading to delays and shutdowns in production. But as previous disasters have shown, business can also play a major role in rescue and relief operations, as well as in subsequent rebuilding efforts. Wal-Mart famously upstaged the US government in responding effectively to the floods in New Orleans after Hurricane Katrina in 2005. In contrast, after the devastating 2008 cyclone in Burma, international companies were slow to offer assistance. Last year's Haitian earthquake generated a lot of corporate donations, as well as a fair deal of controversy around the role of companies in economic redevelopment and rebuilding projects.

Corporate involvement in disaster relief in Japan has yet to hit the headlines in any major way, primarily, as far as we can tell, because companies have been rather conservative in their responses. That's not to say that companies haven't helped raise a lot of money for the cause, because they have. According to the US Chamber of Commerce's, Global Aid Tracker, which does a pretty impressive job of keeping tabs on such things, global corporate assistance for the Japan crisis has now exceeded $158 million.  This includes 100m Yen (about US $1.2m) each from companies such as Bayer, BP, Hyundai, LG, Nikon, and others. Even higher sums - up to 5 times as much in fact - have been committed by the likes of Canon, Citigroup, Dow, GE, Mitsubishi, Nintendo, Sony, and Wal-Mart. As you can see, it's not just Japanese companies either, but global companies, especially those operating in Japan doing the giving. The Japanese Red Cross, however, appears to be the most favoured recipient.

Some companies have linked up their corporate donations with employee giving, often by matching employee donations, as a way of engaging workers in CSR initiatives. An interesting development here has been the tie-up between the CSR services company AngelPoints and Network for Good to provide a free on-line giving platform to the firm's clients. As the firm's press release puts it:
From now until the end of April, two million employees from companies such as Newell-Rubbermaid and Sterling Savings Bank will have access to a centralized online donation platform that will facilitate the immediate transfer of funds to organizations in Japan that need it most.
In fact, the on-line world has probably seen some of the more innovative responses to the disaster from the corporate community. Whilst some, such as iTunes and LivingSocial have simply enabled users to readily make donations through their sites, various Japanese gaming companies have developed cause-related game tie-ins to engage their users in contributing to relief efforts. The gaming demographic is notoriously difficult to enlist in social programmes, so it is certainly a positive sign that gaming companies are using their core products to reach out in this way. Zinga, the US company behind the hugely popular Facebook games, Farmville and Mafia Wars has followed up its Haiti giving initiative with a Farmville in-app donation vehicle which enables users to donate by buying virtual goods within the game - in this case, a daikon crop. Launched within 24 hrs of the disaster, online gamers reportedly went on to help Zinga contribute more than US $1m in just a few days. For a company with a tagline of 'connecting the world through games' (and already drawing fire for its addictive effect on young players), Zinga's ability to use social media to connect gamers around the world with major social problems is a surefire winner.

Elsewhere, there has been a disappointing lack of innovation among the corporate community in the Japan disaster relief. Providing money and in-kind goods is one thing, but what really can make humanitarian aid efforts stand out are when they leverage core corporate capabilities. Japanese manufacturing companies, with their decades of experience in just-in-time management and lean manufacturing practices, could be deploying their logistics and supply chain prowess to relief efforts. Law firms and financial services companies could be putting their skills towards helping displaced families, many of which lack earthquake insurance, sort out the legal and financial mess they have found themselves in rather than simply donating cash.  The list goes on. Short-term charity is fine as far as it goes, but companies should know that a more strategic approach to corporate responsibility has the potential to add considerably more value both to the stricken Japanese people and to themselves.


  1. "Providing money and in-kind goods is one thing, but what really can make humanitarian aid efforts stand out are when they leverage core corporate capabilities... companies should know that a more strategic approach to corporate responsibility has the potential to add considerably more value both to the stricken Japanese people and to themselves. "

    I think this is a fantastic point. When faced with a situation that demands immediate response, the gut reaction is often to take the fastest and simplest means of contribution - financial donations. It's easy, fast, measurable and makes a great sound byte. Matching employee donations is a great way to engage employees in a CSR initiatives, and a trend I'm happy to see develop.

    However, financial donations are not always the most efficient or impactful ways that specialized corporations can contribute to relief efforts. Corporations have an incredible opportunity to utilize their areas of expertise in contributing to relief efforts in ways that they are uniquely positioned to do.

    For example, instead of simply making a donation to Haiti relief efforts, UPS donated barcode scanners to help keep track and organise the complex logistics behind the distribution of mass quantities of aid ( or

    This is a great way for UPS to efficiently contribute and have a significant and unique impact, and showcase some of their innovative technologies. A definite win-win.

    At their core, humanitarian crises are not entirely different from business/management challenges corporations face in their day-to-day operations. The humanitarian sector needs management skills, perhaps more than just money, and in that way today's businesses are uniquely positioned to contribute - as they should.

  2. Great comment Julius (and always good to see when people read right to the end of a post :-) We're wondering if maybe we're just not hearing much about the more specialized corporate contributions in Japan (maybe because of language issues if its mainly reported in Japan), or whether they really are simply not happening. We think its the latter, but we'd love to be proved wrong.

  3. For many, charity is a hard concept when it comes into their mind. Spirit of giving is a must to work for charities or to raise fund for them. It takes a lot of efforts and patience to raise money for various social causes. Also, 2011 is presenting many challenges for nonprofits. Today, nonprofits face a reduction in grants; an economy that is stretching their nonprofit dollars to the max; an increase in demand for their services; all while trying to reach new donors in a very competitive industry. Nonprofits are trying very hard to "get the word out about what they do for others", while growing their organization for long-term success.


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