The Evolution of Corporate Sponsorship in France: From Philanthropy to Standard Practice

The practice of donating without expectation of financial benefits in return began to develop in France in the 18th century. Supported, criticized, called into question many times, it evolves over time, whether to complement the action of the Church and the State or to free itself from it. It was at the end of the 1970s that companies began philanthropy and sponsorship. Although there are no legal or tax differences between these two terms, the first tends to be used more to evoke the generosity of large individual donors while the second most often corresponds to corporate charities. , which are not always disinterested. In both cases, successive governments have contributed to the development of these practices by putting in place advantageous taxation which, although it is regularly attacked today, remains the most favorable in the world.

Paternalism

The literature surrounding the history of corporate philanthropy is not legion. Arthur Gautier, associate professor at Essec Business School and executive director of the school’s philanthropy chair, distinguished in a 2015 publication three major periods, the first of which begins at the end of the 1970s.Previously, there were mainly a few individual initiatives which were part of a paternalistic logic at a time when the working and living conditions of workers, in a context of growing power of the unions, pushed certain industrial bosses to commit to financing nurseries or hospitals, for example“, he explains. Among these leaders, we find names still known today like Michelin, Cognacq-Jay or Wendel.

At the beginning of the 20th century, some companies also had collections of works of art in order to keep heritage alive, but this type of practice was only in its infancy. “At the time, it was felt that it was up to the welfare state, or even associations, to carry out missions of general interest.explains Arthur Gautier. It was not up to the private sector to do anything, because it was not legitimate and why would it spend money in areas covered by public authorities?“

New role

At the end of the 1970s, mentalities changed. Companies are questioning their role: should they only limit themselves to creating jobs, selling goods and services and paying their taxes, or can their impact on society be extended? It was also during this period that the historian and sociologist Pierre Rosanvallon published a work in 1981 entitled The Crisis of the Welfare State. The idea that it can delegate part of social action to private actors is growing, leading to the rise of sponsorship by companies, which are assuming more of their social responsibility.

At the end of the 1970s, companies were questioning their role: should they limit themselves to creating jobs, selling goods and services and paying their taxes, or could their impact on society be extended? ?

Solicited by press and radio men convinced by corporate support for art in the United States, Jacques Rigaud – who was notably CEO of RTL – became president of an association created in 1979, Admical (Association for the Development industrial and commercial sponsorship). “Jacques Rigaud believed that
companies had to commit to culture but this support had to be disinterested, otherwise there was a risk of turning into disguised advertisingreports Arthur Gautier. On the other hand, other business leaders, such as Alain-Dominique Perrin at Cartier, considered that actions should benefit the company in terms of image so as not to give the impression that the boss does what he wants. and does not act in the interest of the company.“The professor continues:”Even if times have changed, we still find this tension between those who do not want to exploit sponsorship for the benefit of the brand and those who want to be able to justify themselves to shareholders and employees.“Supported by the leaders themselves, patronage, during this period, was primarily concerned with cultural projects.

Legislative turning points

To promote corporate philanthropy, Admical lobbied public authorities and ended up obtaining major legislative advances which marked the advent of the second period distinguished by Arthur Gauthier: 1986-2003. In 1987, the Minister of Culture François Léotard passed the law on the development of patronage which introduced the first tax incentives in its favor by modifying the general tax code. A way of recognizing its general interest. The text will be supplemented by the 1990 law which allows companies to give their name to foundations.

From then on, patronage – which was mainly the prerogative of American subsidiaries in France and French banks – gradually extended to large companies as a whole. In order to carry out their projects, companies create positions of full-time foundation directors or general delegates. “The subjects on which they work are also diversifying, with a breakthrough in solidarity (humanitarian, poverty, disability, loneliness)“, specifies Arthur Gautier who recalls that the history of patronage is inseparable from the social question.

However, at this time, the problems of extreme poverty and social exclusion are worrying. In 1986, Claude Bébéar, boss of Axa, created the Institute of Solidarity Patronage to share good practices. Companies are gradually getting closer to NGOs, calls for projects are launched, reporting requirements are expanding. Skills sponsorship, through which companies provide employees free of charge to associations, is spreading.

2003 marks a new turning point. That year, a new law doubled the tax advantage granted to corporate sponsors. In 2008, the law to modernize the economy set up the endowment fund, a new tool for financing patronage. In 2010, 28,174 companies declared donations in France. In 2020, this figure reached 104,756, for respective amounts of 984 million euros and 2.3 billion euros, according to Admical.

Place for CSR

“Today, sponsorship is in increased competition with other forms of corporate commitment in societynote Arthur Gautier. If patronage was a pioneering and very relevant tool at one time, some are turning away from it today. Furthermore, the question of the coherence of corporate actions is becoming crucial for a growing number of citizens: companies can no longer give the impression that they are inexpensively offsetting their negative externalities on nature or society through charity. .“

Society expects more from businesses, and sometimes differently. Those located in the territories are called to become more involved, the emergence of more and more entrepreneurs in search of impact shows that there are other ways of working for the common good. “Patronage is an interesting tool for companies because it allows them to finance causes and projects that have no intrinsic profitability, but it is no longer their only way of getting involved.“Companies seek consistency between their activity and their sponsorship actions. Philanthropy has its role to play in responding to the increasingly pressing CSR challenges.

Olivia Vignaud