From Discretionary Spend to Profit Centre

Lots of Corporate Social Responsibility programs are started with the best intent. The desire to build an increased level of engagement within the business, to share a portion of net profit, to assist the community and a general belief that it is the right thing to do.

So with all of these common reasons present, many are reluctant to talk about expecting a return on their investment from something that was “not about making money.” My experience in building programs is that if you put the interests of the charity or community group you are looking to support at the forefront you are destined to serve their needs and inhibit your ability to benefit commercially from the program.

Often the outcome in the medium to longer term with this strategy is it quickly becomes a cost centre to the business and a discretionary spend. The problem for the charity with this approach is they will continue to benefit and receive your support ONLY while business is good. As the economy turns and business looks to reduce non-essential costs you can bet that support of charity will be the first to go, closely followed by investment in professional development.  

If we accept this as remotely close to fact, then we must accept that it is in the interests of our charity and community partners that charity benefits long term when business grows from investment in the sector. 

It’s time to start expecting a return on your investment from your Corporate Social Responsibility because the alternative doesn’t benefit anyone in the long run. 

The intent of why you may have started the program in the first place doesn’t need to change, just the execution and how you measure the cost of your contribution and the difference that is being made.

Before you look to measure the return you need to first understand the contribution that you are making. Might sound simple enough but very few organisations who don’t have the luxury of an internal team making this happen, rarely appreciate the true cost of their give. It’s not the sum total of the dollars that are given away and it’s not the combination of unskilled volunteering. It’s much more than that and it’s important, as it is in any other area of your business that you understand the real cost. Include the cost of the administration of the program, the cost of compliance, governance and both the skilled and unskilled hours that are committed. You will be surprised at how much beyond the dollars that are donated actually accounts for your CSR program. 

After the cost is known then there is the opportunity to look at the key performance indicators of the program and map those against the returns from the investment you are making.

What are those returns you can expect:

  • Increased staff morale and engagement;

  • Improvement in employee retention rates;

  • Becoming more attractive as an employer;

  • Increased customer loyalty;

  • Enhanced brand awareness and differentiation between competitors;

  • New distribution channels; and

  • Reduced costs through innovation and shared value.

The returns to the business are often dependent upon the sophistication of the program. The important thing to note is the returns are seldom tied to the dollars you give away. By doubling the cash contribution to make to your CSR program does not double the return you should expect. 

At Doing Good Rewards the team lifts the hood on your business operations and starts the diagnostic process of identifying “what are the opportunities to grow your business through engagement with community”. Our experience tells us that generating business growth via CSR is the key to long term sustainability, it really is Doing Good by Doing Good. 

If you would like our team to look for opportunities to grow your business through CSR, get in touch with us at Doing Good Rewards.