The case for Corporate Community Investment

There is a danger in viewing corporate responsibility as an obligation rather than an opportunity

In every part of the world, there is pressure on companies to be socially responsible. In addition to making a profit, you’re expected to demonstrate how you’re protecting the environment, safeguarding the health and safety of people, and helping to sustain the communities in which you operate. According to a 2007 survey by the Economist Intelligence Unit, global business executives are responding to this pressure in increasing numbers, describing the issue as “a growing priority.”

Still, you may be among those who remain unconvinced. After all, don’t social efforts distract from the task at hand: generating profits and maximizing shareholder value? Businesses employ vast numbers of people and pay a considerable share of taxes – Isn’t that enough? In a 2010 Compas poll, a mere 35 per cent of corporate executives said that companies should support charities – but only if their giving was consistent with corporate objectives and employees’ desires. And, according to Giving USA, 2011 donations by corporations and their foundations represented just five per cent of total giving.

Perhaps the gap between public expectation and corporate execution is due to the lack of clarity about the business value behind community investment. Viewing corporate responsibility as an obligation rather than an opportunity, most companies still default to the tried and true: unfocused programs intended to increase visibility, attract talent, and manage reputations rather than those that improve society and generate a return.

If you haven’t got a Corporate Social Responsibility (CSR) strategy, or want to
re-evaluate the one you have, here are a few questions to keep in mind:

Where are there opportunities for shared value?Corporate community investment plays a role in stakeholder relations and employee engagement, but it can also be a business development tool. The most strategic companies invest in projects that create both positive social outcomes and an economic return. For instance, Walmart supports farmers in developing countries, teaching them new growing methods and supporting their farm infrastructure. In turn, these farmers become suppliers to Walmart locally. Are there similar opportunities within your operating communities? What if you were to work with these communities to identify needs and ways to best generate mutual wealth?

According to Johns Hopkins professor Lester Salomon, fostering a process of
participatory community investment (rather than paternalistic or philanthropic giving) is sometimes the only way a company can gain the social license to operate, particularly in areas where mistrust of companies is common. Rather than being self-serving, this type of bottom line focus has the potential to increase your level of engagement and impact.

Where are there opportunities to focus? Many companies take a grassroots,
employee-driven approach to giving. Others identify specific categories of giving related to operations – such as safety or education. It may be necessary to maintain a portion of giving through a portfolio approach, but a best practice among leading companies is to focus giving behind a single cause.

PNC Financial Services group invested $100 million over 10 years toward a signature program called Grow Up Great, focused on early education. They then deployed their regional executives toward advocacy for early education funding and policy changes at the state level.

According to the authors of Do More Than Give, this initiative, along with other development strategies, appears to have helped PNC maintain a strong position through the recession of 2008. A narrower focus allows you to measure and communicate impact, strengthen your corporate brand, and enhance the confidence, trust, and commitment of stakeholders.

Where are there opportunities to amplify giving? Many companies engage employees in volunteer opportunities in the community, helping with painting projects or special events. But rather than devoting a single day toward volunteering, you could find ways to connect employee skills with the needs of various non-profits throughout the year. By deploying skilled workers into non-profit organizations, you can help these agencies improve their capacity and achieve greater outcomes, as well as provide employees with hands-on experiences that build their own skills and sense of significance. Likewise, if you’re a company with a large network of suppliers, find ways to engage those networks to participate in your community investment strategies. By doing so, you will amplify your impact and create even greater benefits for your communities.

For the skeptics that remain, creating a stronger approach to CSR may seem more nice than necessary. But if your company is interested in demonstrating leadership, building valuable, mutually beneficial relationships, and finding new opportunities to grow, establishing a strategic CSR program is very good business.

Troy Media columnist Joni Avram, founder of Cause & Effect Marketing, has helped generate millions for philanthropic initiatives. She will be writing regularly on philanthropic issues.

Article provided by Troy Media,

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