Irresponsible Corporate Responsibility: Doing Good Isn't Always Done Well
With all the right intentions, hordes of companies—large and small, franchised and wholly owned, domestic and international—have accepted the calling to be good corporate citizens. They are diligently implementing corporate social responsibility (CSR) programs that address sustainability, philanthropy, community involvement, and other goodwill requirements.
According to a recent IBM study, 1,130 CEOs said they plan to increase their corporate citizenship spending by 25%, on average. CSR, then, is still nascent; companies are searching for the basic answers to how much is enough and what really makes a difference to society, for the brand, and to the stakeholders.
Many companies make serious but avoidable mistakes that can overshadow well-intentioned CSR investments. The errors result in damage to the brand and to the "responsible" person's career.
Here are some of the top causes of such mistakes.
1. Misalignment of the cause with the business
A company in the fast-food business probably has no real ability to fix the US educational system. A clothing retailer probably can't solve world hunger. Sure, corporate foundations can give money to other organizations such as nonprofits or nongovernmental organizations (NGOs) that have expertise in those areas. However, most likely, the company would be better served if the selected cause leveraged the skills, connections, and resources within the company.
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Alyssa Dver, a former CMO for public and private companies, now runs Mint Green Marketing (www.mintgreenmktg.com), which helps improve the effectiveness of corporate-responsibility and marketing investments.
Comments
First off great article Alyssa. You mention most of the challenges that many corporations may not be prepared or staffed to meet.
One very flexible solution to address several of the problems you mention above is to empower the "audience" (customers, suppliers, shareholders, employees). There are tools provided by sites such as www.ccgiftcards.org that give the audience that possibility. This is not to say a strategy is not needed. A corporation can customize an option like this by allowing the audience to make 100% of the decision or share in the decision. A tool like CharityChoice also offers multiple branding opportunities. Hope it’s helpful.
Super article. However your first point (CSR should match the companies ability or business they are in) can be challenged, excatly what I am doing. In Kenya where I come from companies that are doing a good job aib CSR by focusing on what the people need. This is mainly education, water, and health ( HIV/AIDS) . For example EABL ( a brewer) does a lot of CSR in the water area, SCB Bank with visualy impaired. Though from an alignment perspective this may not make sense they have choosen on causes which will make a big difference to the communities rather than on trying to align what they do as a business to the cause. This is wotking for them. Choosing causes that align with ones business may be limiting.
I just found out this was posted so forgive the delay in this comment! I agree with "wamai" in that the cause should be what people need first and foremost. However my point is that people need a lot of things - education, water and health services as you named some big needs. When a company is trying to figure out the best cause for them (the company) specifically, my suggestion is to select a cause that the company can actually make a measurable difference. That is, everyone can help build houses for humanity and that is a great cause, however, if your company has special skills or access to needed resources, you most likely can make a bigger impact for everyone. Goldman Sachs, for example, works with women and other disadvantaged entrepreneurs in countries where they don't otherwise have access to capital or business mentors. Fed-Ex provides emergency deliver services during natural disasters and other urgent times of need for medical and food supplies. While some may see these efforts as somewhat self serving, I believe they allow the company to offer very high value contributions that their employees are uniquely suited to give. As such, its a win-win-win. The receivers get a much needed service, the employees use their unique skills to do something good and clearly feel good about doing it, and the company can use the stories and experiences to increase their business mission and employee leadership abilities. I think we all shoudl be very practical when thinking about CSR in that for-profit businesses by definition (like it or not) need to generate profits so there will always be pressure on what and why they should do CSR work. However, if you can align the charitable cause with the business assets and show a return in terms of furthering the core business objectives, that helps get the less CSR and more operational managers aligned too. Often these are the ones who control the budgets so in as sense, you play the game with bargaining chips that are rationale and defendable from a business perspective. With that all said, it may not always be possible to have such alignment and many of my clients stress a passion to fix a social problem specific to a person, region or local office. I don't argue with that if the urgency is there. Doing any good is great in my book - but even better if it can be aligned for the greatest impact and sustainable return to all involved.