“I am a firm believer in the power of business. Business is the strongest, fastest change agent that we have. Businesses need to become more sustainable and create donations to support their local communities—not just their economies. Everybody’s got to start working together across the lines to really spike this up as opposed to everybody just doing their own thing.”
—Matt Bauer, President and Co-Founder, BetterWorld Telecom
Corporate social responsibility (CSR) and the triple bottom line are increasingly mainstream business topics. The groundswell of companies committed to operating by company-wide CSR policies, transparent reporting, using high standards for supply chain performance, etc. grows annually. The problem is while most of these companies make charitable donations, strategic community involvement remains an area that frequently either gets lost or put on a back burner among other CSR concerns viewed as more “pressing.” However, the expectation of business to give back to local communities coming from both outside and inside company walls has never been greater, especially given our current economic environment. Community involvement is no longer a “nice to do” but an essential “need to do.” Companies of all sizes are fundamentally rethinking their business giving to be more strategic and fully integrating community involvement into their overall CSR practices.
Pet projects reflecting the personal interests of individual senior executives or activities undertaken as propaganda for the company with little real benefit to society are no longer in the majority. Neither of these ways to engage “realize the opportunities for significant shared value creation that have been achieved through smart partnering,” according to Keys et al. in the December 2009 McKinsey Quarterly. “In such ventures, the focus of business moves beyond avoiding risks or enhancing reputation and towards improving its core value creation ability by addressing major strategic issues or challenges. For society, the focus shifts from maintaining minimum standards or seeking funding to improving employment, the overall quality of life, and living standards. The key is to tap into the resources and expertise of the other, finding creative solutions to critical social and businesses challenges.”
The old days of “checkbook philanthropy” based on an “alms for the poor” mentality are coming to a close. A new giving paradigm is emerging, one based on partnership between business and the social sector, not paternalism. Companies’ philanthropy increasingly merges the desire to give back with the goals and directions of the business itself. Drawing on the expertise of both the business and nonprofit partner opens doors to new innovative ways to address current social issues while building morale internally.
Benefits of Strategic Giving
Strategic business involvement with community organizations can offer you powerful “all-win” opportunities that benefit your community, your company, your employees, and your bottom line. Most businesses already engage in some form of philanthropy, feeling it is their responsibility to be involved. They want to make a difference. For some, community investment offers a sense of belonging and a purpose contributing to the greater good. Overall, those involved in their communities say they experience a higher quality of life as a result.
However, along with the intrinsic, heartfelt rewards we naturally feel from giving back and making a difference, there are powerful business benefits available to any philanthropic company that engages with communities in authentic, meaningful, and strategic ways. Especially during these difficult economic times, the need for doing “double duty” with your scarce resources has never been greater. You need to be able to “do good” and “do well.” Heartfelt giving and receiving business benefits are not mutually exclusive, but rather they complement one another.
Has your company shifted from charity to strategic giving? Is your community investment an add-on or woven into the fabric of your company and corporate culture? According to a McKinsey global survey on the state of corporate philanthropy, nearly 90 percent of companies now seek business benefits from their philanthropy programs. Desired business benefits include enhancing corporate reputation or brand, building employee and/or leadership capabilities and skills, differentiating themselves from competitors, managing risk, and building knowledge about potential new markets and informing innovation.
How To Avoid Three Key Mistakes in Business Giving
1. Have a Strategy for Good
Companies of all sizes receive requests for support from many worthy nonprofits and community organizations, such as schools, every week— sometimes daily. It is easy to feel bombarded and chagrined that you can’t provide assistance to the many deserving organizations that approach you. As a result, some companies use a “shotgun” or “first come first served” approach which, in the end, keeps the relationship superficial and dilutes its impact. The challenge is how to choose which causes and organizations to support based on criteria that make sense for your company – your core values and business competencies and resources you can leverage for good.
Every company should have a strategy for good. Just as a good business plan helps you grow your business and avoid mistakes, a written community investment plan will help your company stay focused, make strategic decisions, and leverage the greatest difference. Having a written strategy helps you stay clear about company priorities and aids in decision-making. It is also easier for interested, potential nonprofit partners to understand your priorities and to help them determine whether to contact you for a partnership or not.
2. Think Mutual Benefit
Many times businesses forget to think about what assets nonprofits bring to the table and ways to leverage those to help meet their social and business goals. Instead of thinking solely about what you offer to your partner, consider also how engaging in a meaningful way with that nonprofit could reinforce your business objectives. Not acknowledging that both partners have assets to share can color interaction and set up the relationship to be distorted and unequal from the start.
You likely know what your nonprofit partner’s basic needs are. But what are yours? How healthy is your company and bottom line, especially in this challenging economy? Honestly, what key issues have you been dealing with? Is there anything you are concerned about in the workplace, marketplace, or elsewhere? How has the bottom line fared? What do you really need right now to help move things forward and increase profitability? Given your “health status,” what specific business goals do you have now? Are you open to supplementing your standard solutions to achieve business goals/growth with heartfelt yet strategic win-win community investment?
Be very clear about this, while remembering to always take care of business first. Realize that your giving should be strategic so it does real good and can help grow your business and boost your bottom line. However, win-win community investment is by no means a panacea to address all company challenges or a way to save a failing business.
3. Be Transparent
Some business leaders worry that sharing information about their community investment is distasteful self-promotion—they don’t want to appear crass or self-serving. Others fear being accused of “goodwashing” or overinflating their efforts. Remember, there is a huge difference between boasting for self-gain and raising awareness of mutually beneficial partnerships between your company and the nonprofit sector. In these times of increasing employee and consumer expectations concerning give-back and accountability, sharing the story of your community involvement is an essential step. Don’t skip it!
We live in challenging times. Businesses of all sizes can be a potent force for positive change as we are critical anchors in each of our communities — providing employment, needed goods and services, economic vitality, stability, and growth. We can harness our power for even more good through strategic partnership with the nonprofit sector, blending our mutual expertise and resources to benefit the entire community. As Gary Hirshberg, Stonyfield Farm CE-Yo, puts it: “Whether you are active as a for-profit or a nonprofit, we all have to be active. No one has more or better credibility than anyone else. Everybody has got to grab an oar. The world is in too much trouble.”
Remember: We are ALL part of the solution. What is YOUR strategy for good?
About Strategy for Good:
Giving back to local communities is a growing expectation for businesses coming from both outside and inside company walls. Strategy for Good shows you how to create all-win solutions that demonstrate your values, benefit the causes you care most about, and boost your profitability. Chock full of real world examples from companies you can relate to, this timely book offers dozens of creative ways to give beyond “checkbook philanthropy” and guides you through the essential steps to developing your own “Strategy for Good.”
About Susan Hyatt:
Susan Hyatt is the founder and CEO of Business Nonprofit CONNECTIONS, Inc., a consulting firm that helps companies transform good intentions into real impact on their communities and their bottom line. BNC providesthe cutting edge training, tools, expertise, and best practice examples needed to effectively design and manage community investment programs that are in alignment with corporate vision, values, and goals. Susan’sclients include the Corporation for National and Community Service, CARE, Habitat for Humanity, Heifer International, and USAID. The author travels widely as a trainer, keynote speaker, and avid volunteer in global service projects.
