Back in the early days of corporate philanthropy, companies typically selected causes to support based on the personal interests of the chairman—or the chairman’s wife!—with little or no regard to issues of strategy, relevance or impact.
Fortunately, things have moved on, with many companies now adopting more innovative, imaginative and considered approaches to their companies’ community involvement activities—such that in many cases they can no longer be understood as purely ‘philanthropic’.
Whatever companies choose to support in their communities, there’s an increasing move toward strategic alignment. Can the company and the charity partner benefit from working together?
Just as there are numerous reasons why companies support charities or community organisations, from a moral imperative to ‘give back’ to the community, to reasons of staff motivation or the desire to address a relevant social issue, so there are multiple ways in which companies choose to engage. What they tend to have in common is an increasing move towards strategic alignment and an ambition for the company itself to derive a benefit as well as the charity partner.
Here are five questions we think companies need to ask themselves when embarking on a philanthropy or community engagement programme, or when considering how to take their programme to the next level.
1. Should staff do the giving or the company itself?
One of the first decisions a company will need to make is how the programme will be funded. Many companies do not have a budget for charitable giving and rely on staff fundraising to generate donations. Companies can see this as an opportunity to give their staff a stronger stake in the relationship with their charity partners and to create a sense of camaraderie around fundraising activities. Even organizations that do set aside a budget for community involvement may for this reason still choose to engage their staff in fundraising activities. For example, Deutsche Bank UK employees fundraised over £1.8m for its two charities of the year in 2014 through a range of appeals, challenges and social events.
On the other hand, companies that dedicate a portion of their own profits to donate to charity demonstrate a willingness to ‘put their money where their mouth is’ and may be in a position to make larger contributions. Clothing and household goods retailer Next, for example, gives financial support from its own coffers to a wide range of charities of all sizes, believing it can make a greater impact by working with a larger group of organizations. This is doubtless invaluable for charities that need unrestricted funding and perhaps do not have the capacity to provide ongoing account management to a corporate partner.
2. Should staff or the company lead the program?
Which is more important—giving staff control, so you increase morale and engagement, or keeping company control, so you align philanthropy and corporate strategy?
Giving employees a say in the cause(s) their company supports may result in stronger support, engagement and sense of ownership. At Time Inc. UK, for instance, employees nominate their preferred charity partners at both brand and corporate level, with minimal influence from the company’s management. Conversely, when the board or a management committee selects the cause, they may be in a better position to ensure strategic alignment between the respective goals of the business and charity and to leverage benefit from the partnership for both parties. Deciding which outcome is more important is an important first step in planning any successful programme.
For companies with multiple sites, it can be hard to decide how much autonomy to give to staff, or to a company’s individual operating locations. A board may be keen to keep regional offices and staff engaged—and to benefit from their knowledge of local community needs—by affording them a measure of authority over how funds or other resources are disbursed in their areas. But this may need to be balanced with ensuring a consistency of approach across all sites and needing to keep track of what is being spent where so that impact can be measured.
3. One cause or several?
Another decision facing companies that want to make a social impact is how widely to spread their benevolence. Some companies—especially smaller ones—choose to focus their energies on one cause at a time, thus giving greater focus, possibly greater impact, and the opportunity for all staff to unite behind a single cause.
Others choose to take on multiple charity partners simultaneously, which carries the benefit of variety, an increased likelihood of appealing to more employees, and offering multiple ways for staff to engage. Adidas, for example, has chosen to support a range of organizations around the world that are tackling issues of relevance to the company and are demonstrating sustainable benefits to the communities where adidas operates.
4. Short term or long term?
The classic ‘charity of the year’ would be a typical manifestation of a short-term partnership. Along with the advantage of ‘freshness’ and little chance of staff growing bored with the cause, the short timeframe may provide greater focus. The charity of the year model has itself come a long way: although traditionally fundraising-focused, many companies now use these year-long partnerships as an opportunity to offer more strategic support to a charity, on multiple levels, on a short-term basis.
Is it better to offer diverse types of support over a short time horizon, or to go deep, building a focused, long-term relationship with a charity partner?
Conversely, while longer-term partnerships may result in fatigue, especially for employees who don’t feel a strong affinity with the chosen cause, they do pave the way for deeper relationships, long-term planning and possibly more sustained impact. British Gas, for example, is currently mid-way through a five-year partnership with housing charity Shelter, and their ambitious collective goals include raising the profile of housing on the national agenda and transforming the standards of Britain’s homes.
While there are benefits to both approaches, more and more companies are now showing a preference for building longer-term partnerships with a smaller number of organizations, believing this is the route to a deeper, longer-lasting impact and the opportunity to build value for the company while doing good for the community.
5. Should you give money or time?
The exact focus of the support a company gives can take many different forms, from straightforward financial donations (most commonly to fund a specific project, understandable from the company’s point of view but challenging for charities that still need to fund their running costs) to a programme of in-kind support. The latter could involve the company’s employees volunteering their time to undertake ‘general’ tasks (for example, providing basic administrative help or stewarding at events) or using their specific skills or expertise for the benefit of the recipient charity, which often also contributes to their own professional development.
Charities will always need financial support. And some companies can give it. But companies can also offer in-kind support that may deliver similar value.
Scandinavia-based Nordea bank, for example, is one of four banks in Finland participating in the Economic Skills project, through which employees support young people who are neither working nor studying to learn basic financial skills. Employees benefit hugely from the experience, returning to work with greater motivation and better able to understand and relate to their customers.
While charities will always need and appreciate financial donations, companies are increasingly looking to build more sophisticated community investment programmes that enable their employees to contribute directly, either instead of or in addition to monetary support.
The main things to get right
There is no ‘one size fits all’ approach to community engagement: what’s important is to find an approach that fits with your company’s culture and way of operating. But companies that have clearly considered these five questions, have measured the impact and developed plans to communicate the results end up making the most difference.
And that, after all, is the point—regardless of what the Chairman’s wife thinks!
Jane Boswell is a CSR consultant with Junxion. She supports strategy consulting work for a range of Junxion clients and specializes in developing community engagement programmes and CSR reporting and communications projects.