Corporate Philanthropy- The virtuous circle - Fusion
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Corporate Philanthropy- The virtuous circle

Corporate Philanthropy- The virtuous circle

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Opinions and thought-provocation in the area of Corporate Social Responsibility (CSR): How it can be used as a force for good, and where all benefit.

By Adam Libbey, Business Development

The concept of ‘giving something back’ to the community is not a new concept or one that is hard to understand. But many corporates appear to ‘give something back’ with no agenda or reason other than good-will and being seen to be ‘doing the right thing’ – Whilst I respect this view, I also challenge the assumption of not expecting anything in return. I believe there is not only huge benefit but also much wider effects of corporate philanthropy. My aim is to highlight and explore how this helps develop individuals, company, and the community.

There are many sayings along the theme of ‘help someone even though you know they can’t help back’ but that overlooks the premise that the very act of helping someone else helps the helper. Everyone can relate to a sense of wellbeing, pride and honour when you do a good deed or give a present, and that in itself is the reward isn’t it? The act of giving is payback! There are many more eloquent quotes to reinforce this such as ‘Only by Giving are you able to receive more than you already have’- Jim Rohn

Furthermore if companies physically engage in corporate social responsibility activities, these can and should present a huge opportunity for personal and team development. Philanthropic work may often sit outside of the regular ‘comfort zone’ of company workers; this in turn lends variety and a sense of worth, but also within a testing environment. Again this is a huge opportunity that needs to be capitalised on – management can view workers in a different and challenging environment. It also presents opportunities for leadership assessment and development, aids identify talent and leaders, promotes team ethos and breaks down silo thinking. Many of the classic team building exercises of tyres and ropes, whilst being great to understand performing teams and goals, they stop at that.

Yet when the platform for leadership, development and team-building also becomes a corporate social responsibility initiative which produces tangible outcomes to the community, then it takes on a deeper sense of worth for everyone involved.

You can’t put a price on morale; it is a crucial part of successful business practise. A day of philanthropic work where someone feels that they have not only helped a worthy cause but also developed and learned new skills in the process, will be assured of increased morale.

So far I have only really touched on the psychological aspects of philanthropy but there are also key commercial benefits to discuss too.

Recent research has shown that companies that put a high value and expenditure on philanthropy have better reputations; (Brammer and Millington -2008)[1] and given that reputational indices tend to reflect the financial performance (Fryxell and Wang -1994) [2]of organisations above all others it seems obvious that this is a key area to focus on.

Back in 2011, Harvard Business School Professor Michael Porter put forward a proposition to global corporations of ‘shared value’. “Shared value is not social responsibility, philanthropy, or even sustainability, but a new way to achieve economic success. It is not on the margin of what companies do, but at the centre.”

“We believe that it can give rise to the next major transformation of business thinking,” he boldly pronounced. Although not all agree with this theory as Larry Summers (former US treasury secretary) publicly denouncing it and highlighting is a wide chasm between those who believe that corporate social responsibility and sustainability are integral to company profits and growth, and those who believe such efforts are public relations at best and a distraction from core activities at worst.

I do agree that that silo thinking exists where Corporate Social Responsibility (CSR) activities are not viewed in the same way as sales, nor as important as profits, and even just seen as a ‘side-job’ or additional duty of the HR team in many companies. “The CSR people talk to the CSR people and the corporate people talk to corporate people.” Nigel Cameron [3]

Porter’s theory of “shared value” takes the concept of corporate social responsibility further. He argues that companies should use their interactions with society – and more importantly address society’s problems – to drive new business opportunities and create a source of significant untapped profit.

The research on the relationship between profits and social responsibility is not clear cut and very hard to try and quantify. I am not suggesting that a business should undertake philanthropic work to give them an edge over competitors, or for perceived financial gain. It must be for the right reasons not just for the sake of it, and should be viewed as an area for opportunity which can add real value to the business. Research indicates that large scale investors and the stock market do not clearly reward or punish a company based solely on its global corporate citizenship or sustainability efforts, though there are indicators of a slight profit benefit to doing social good. Though the debate is far from settled over the profitability of corporate social responsibility, there is near complete agreement that corporate citizenship is no longer an option. It is now a requirement.[4]

Looking forward the millennial generation as a consumer group care about where goods/services come from and whether it is ethical. This is reflected in where money is spent. Research also shows that people will take a job role or opportunity for less money if they believe employee satisfaction is higher. Corporate social responsibility sits high on that employee satisfaction. Companies or corporates that encourage community involvement distinguish themselves from their competitors, and see many benefits including loyal customers and happier employees.

A further point is the opportunity of using CSR as a medium to develop a business and its employees whilst also helping the community. It seems an obvious choice to use a policy for CSR as a learning opportunity. Many companies and businesses will allocate a day for CSR in the form or perhaps a charity day of choice or organise a day of painting a fence (likely that doesn’t need doing or has been done before) and also have a separate day for learning and development perhaps in the form of an ‘away day’ of command tasks or white water rafting etc. Doesn’t it make sense to combine these to add real value? Being a force for good whilst learning and developing is a very powerful tool.

To summarise my intention here is to highlight the benefits of Corporate Philanthropy beyond the P&L sheet and how it is a an area that can be capitalised on to add much more by using Corporate Social responsibility as a vehicle to build a leadership, communication and team building skills on a personal and company level.

Fusion Community Initiatives (www.fusioninitiatives.com) is such a company that will develop your people through practical application of leadership and teambuilding through a community initiative. Bringing the values of your company and facilitating a tangible and lasting impact on the community whilst focussing on team and leader development.

The bottom line is… the triple bottom line: social, environmental and financial: people, planet and profits. A growing number of companies are realising that the core of being a sustainable business is seeing the value of balancing profit with a commitment to ethical conduct.

Fusion Initiatives champions this ethos, and provides every service to meet this requirement.

 

 

 

[1] Brammer, Stephen and Millington, Andrew. (2008) Does it pay to be different? An analysis of the relationship between corporate social and financial performance. Strategic Management Journal, Vol.29 (No.12). 1325 – 1343. ISSN 0143-2095

[2] Fryxell, G.E. and Wang, J. (1994) ‘The Fortune corporate ‘reputation’ index: Reputation for what?’, Journal of Management, 20 (1), 1–14.

[3] Nigel Cameron is president of the Center for Policy on Emerging Technologies (C-PET) in Washington, DC, Managing Director of C-PET Futures Platform, and Principal of Re-Framing, LLC.

[4] https://www.devex.com/news/is-corporate-social-responsibility-profitable-for-companies-80354

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