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How “giving” has become a core business

Expectations around Corporate Social Responsibility (CSR) continue to evolve with changes in the way charity and business work together. The amount of commercial funding available to support the work of charities is under pressure. Amid continuing government austerity measures and discussion about a “Big Society,” the community is increasingly looking to business to provide leadership on a much broader front, including tackling complex social problems that don’t respond to the short-termism of political rotation.

Austerity hits the vulnerable first and the hardest, with many worthy organizations turning to business to help meet the funding gaps left by the cuts. In response, businesses have naturally been part self-protective and part responsive. Many of them have invested in individual approaches framed by their own activities and community interactions. At the same time, they have focused on more clearly defining who they will engage with in order to best manage the time they have available and the return they can achieve.

To demonstrate growing relevance, small charities – such as See Beyond Borders – have to clearly articulate their points of difference and link those to where they are most likely to win support, if they are to compete effectively for the funding they need with the resources available.

The direct returns for business

Currently, customers and employees can and do exercise their social preferences for where they spend money and where they work, based on our unrestricted online-interconnectedness. Hence “self-regulation” is developing real teeth.

Where business gets it wrong, stakeholder responses are plain to see in financial performance. CSR is changing the corporate culture to embrace doing the right thing by encouraging businesses to take a broader view on value created. Additionally, CSR is helping improve corporate accountability through more sophisticated measurement systems of positive and negative impact. Dynamic measurement initiatives, including the Six Capitals, have taken illustration and reporting on commitment beyond profit outcomes and beyond triple or even quadruple bottom lines.

In this complex world of interconnectivity, charities should do more than offer an organization its mailing list or brand association. They can back up an organization’s aspiration to be perceived as both benevolent and to act with integrity, but to do this there must be more than a skin-deep relationship.

Of course, there is no magic bullet to demonstrating engagement, although huge international organizations’ links with big brand charities have provided them with a low-risk strategy in this regard. However, there is no longer an opportunity for any one organization to influence the thinking or approach of a mega-charity.

Conversely, stories of involvement with smaller charities will likely be much more personal and engaging. The intimacy of deeper relationships and connections demonstrates greater involvement in, and commitment to, the objectives of the supported charities by businesses and their employees.

Values alignment is a clear business opportunity for businesses to leverage off charities. There are a number of ways in which charities operate, promoting different philosophies and working towards different outcomes. Selecting what best fits a business’s own brand messages, and so choosing appropriate charities to support provides opportunities for staff as well as customer engagement.

For See Beyond Borders, it is critical to show what it can offer the marketing department, the CSR department, the personnel department, and even, the Corporate Foundation, in order to receive the support the charity needs for its work. If a charity is able to secure a grant from a business, it proves that the particular business supporter trusts the charity enough to reflect its core business values.

This says a great deal about both organizations and also illustrates how business funding for charities is evolving in terms of the time invested by both businesses and by charities to understand one another’s worlds.

Returns on Social Investment

The long term impact giving can have for the communities supported is a key measure of the effectiveness of any giving strategy.

When assessing return, one must begin by identifying different types of charities and their aims. Excluding  single-purpose initiatives focused on evangelizing, politics, animals or medical research, there are three broadly accepted categories of charities: those providing “relief,” “development” or “welfare.”

Relief provides temporary support to people in emergency situations after natural or chronic disasters. Development addresses structural inequalities, working with communities to help them meet their basic needs.

Welfare provides direct assistance to alleviate immediate needs rather than the root causes of those needs, such as food, clothing sponsorship or scholarships, institutionalized care, and medical care or hospices. 

Selecting between these charitable models requires a choice between sympathy and selective investment. The immediate relationship between problem and action by welfare and relief agencies often appears to be relatively clear, providing a compelling case for a compassionate response focusing on a quick fix. For development organizations, this relationship may be extremely complex. Problems may appear intractable, actions must be multidimensional, and solutions naturally emerge over time.

We must acknowledge the complexity of measuring a return on investing in “doing good” in any context. Such a return might be more appropriately considered an impact, rather than a function of a traditional measure of profit and loss.

First, consider the return from relief. For example, supporting victims of the Nepal Earthquake, where we are encouraged to give “Just $5” by a poster depicting a person still covered in dust, being lifted from the remnants of what was presumably once their home. There is a clear appeal for sympathetic support and this investment feels appropriate.

But answering deeper questions like “How does the $5 change the lives of those affected beyond the blanket it buys?” is a complex exercise. This feeling of appropriateness for the immediate still dominates the rationale for business giving, generally set in a local context, such as feeding the homeless in your local area. However, donating to organizations that focus on ways to reduce future risk is increasingly being considered.

Training teachers and measures that go to addressing the circumstances underlying the social inequalities abundantly evident in the world’s poorer populations offer less obviously gratifying returns. They are, however, generally easier to define, with this form of charity more used to the rigors of reporting impacts through such measures as student attendance levels, examination marks, teacher achievement levels and community involvement, among others.

A note of caution should be applied to these static measures, given that lasting solutions generally emerge over the long term. (Possible regression once a project is complete is a major difficulty with achieving sustainability and a subject for a future article.) The longer-term impact is the key measure.

Pursuit of development goals has been the focus of the more sophisticated donors or government agencies. However, this is changing as businesses apply more rigorous standards to their “giving” and better understand the dangers associated with long-term dependency and institutionalization. It may be far better to go to the source of the problem than to continue to nurture its consequences, recognizing that these interventions do not have to be mutually exclusive.

Unashamedly, See Beyond Borders argues that taking people to see and be involved with what they do achieves real impact in the communities it supports. There is no substitute for direct involvement, seeing and experiencing what is happening on the ground. Gaining an appreciation for the broader issues faced by charities is perhaps one of the biggest dividends from that investment, both for the investor and for the beneficiaries.

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