Over the past decade, the number of Fortune 500 companies engaging in corporate social responsibility (CSR) has grown significantly, with more than 90% of these companies now participating in CSR initiatives. Corporate giving, a key aspect of CSR, has been a major contributor to the growth of philanthropic funding, with over $20 billion in corporate donations being made globally in the past year. While some may question why companies would choose to give money away, there are several reasons why companies are increasing their investments in CSR:
- Image: it’s hard to leave a lasting positive impression in today’s attention-fuelled economy. CSR allows for you to tell great stories in public through the media and other channels to reach your audiences with good news that improves your reputation.
- Loyalty: CSR initiatives are among the number one reason that employees express why they stick with an employer. From volunteer activities to gift matching to learning and collaboration, CSR allows teams express their passions and give back as part of their job. As it turns out, customers also love the stories that come from this deep work.
- Market access: partnerships allow companies into events and spaces that they might not otherwise be able to access. By leveraging the audiences of partners, companies can unlock doors to key markets by aligning their CSR and business goals.
- Influence: showing up and making a commitment means something, especially when it’s done at the community level. It shows leadership and expertise when companies work to solve deep problems, allowing them to build relationships with those impacted by an issue. Those relationships are built on a solid foundation of impact, giving companies allies and stakeholders that they can turn to in the future.
- Bottom line: The biggest benefit of the above points is that more money will be returned to companies through higher retention, new customers, and increased demand, because the return on investment will exceed the investment itself along with the positive side effects. There is also the impact of tax savings that companies consider as part of these initiatives.
Community investment programs can also help companies to achieve their sustainability goals by supporting initiatives that promote environmental conservation and stewardship. This is critical as more companies measure and report on their carbon emissions and environmental impacts. A company might invest in a nonprofit that is working to protect local waterways or promote the use of renewable energy sources. By supporting these types of initiatives, companies can help to preserve the natural resources that are critical to their operations, while also demonstrating their commitment to sustainability.
These motivating factors are catalyzing the growth of CSR, but now that most companies are in the arena, doing the work, the biggest lesson is the importance of authentic partnerships and impact. Companies that get this right yield untold returns through widespread media coverage and good will. One example of a company that has effectively done this is Johnson & Johnson. The healthcare giant has a number of initiatives in place to address pressing social and environmental issues, including its Global Community Impact Fund, which provides grants to organizations working on issues such as child health and well-being, maternal health, and environmental sustainability. Through these initiatives, Johnson & Johnson has been able to make a positive impact in the communities in which it operates, while also helping to enhance its reputation as a socially responsible company. In September, the Orgmatch team attended The Partnership Conference where Johnson & Johnson presented its new strategy for eye health access. Their strategy came from learning that by focusing their investments and working deeper with strategic partners, they could achieve a much greater impact through their investments. It also aligns with their business strategy of expanding their vision-based products. An example of aligning CSR and business goals to create greater impact.
Companies that get this right yield untold returns through widespread media coverage and good will. Companies that don’t put the time and effort into this work learn the hard way. One such example is Starbucks’ “Race Together” campaign of 2015, which was intended to promote racial unity and dialogue, but was widely criticized as superficial and tone-deaf. As a result, the campaign was cancelled. This example demonstrates the importance of authenticity and partnership in CSR initiatives. While Starbucks’ intention was good, their failure to work with and listen to racialized communities and address racial inequities showed that these issues persist. This ultimately hurt the company’s reputation and efforts to make a positive impact.
More recently, you’d be hard pressed to find any negative stories about Starbucks CSR initiatives. The coffee giant has a long history of supporting nonprofit organizations through its Community Service Program, which provides grants, volunteer time, and other resources to support local initiatives. By investing in the communities in which it operates, Starbucks has been able to increase brand awareness and strengthen its reputation as a socially responsible company. With the partnerships that it has built, it’s able to more effectively respond to social and environmental causes that matter to its employees and customers. This, in turn, has helped the company to attract new customers and employees while retaining its existing customer base and improving employee morale. Today, when I search for “Starbucks corporate social responsibility” Google News returns over 30 articles from the last month about different initiatives, all of them positive. This goes to show that even when companies get it wrong, they can learn and come back stronger.
Community investment in nonprofits by corporate social responsibility departments are an important way for companies to meet their business goals and achieve impact while also furthering sustainability. Through these programs, companies are able to increase brand awareness, attract new customers, improve employee engagement, and make a positive impact in the communities in which they operate. By investing in these initiatives, companies can not only benefit from the tangible returns on their investments, but also from the intangible benefits of being seen as a socially responsible and sustainable business. If you’re a company that’s looking to explore CSR, get in touch with our team and we can help you get started. If you’re a team that already working in CSR, we can help your strategic focus and drive better metrics. Happy partnering!