Why corporate social responsibility should be a profit centre back to your business

Why corporate social responsibility should be a profit centre back to your business

When I speak of the proposition that CSR should be good for those that are giving, to the point that it is actually a profit centre back to the company, there is usually one of two responses.  The first is “that’s interesting, tell me more” and the second is “I don’t agree, we don’t want a return, we give because it’s the right thing to do.”

Most businesses will implement a CSR program for one of a number of reasonsa) they either believe it is the right thing to do and seek no return, or b) they do so because it is what is expected of them and c) it’s what those in their industry are in fact doing. 

The most effective CSR programs are those that provide a positive return to business.  Very simply if there is a return to business, then those in the business are more likely to take it seriously and inject resources into growing the platform, which in return will grow the pie that there is to carve up and share.  

The most effective way to start to derive a benefit from what you are already doing, is not to give more money away, there is no correlation between the size of your donation and the benefits back to business.  Start by understanding the nature of the relationship you have with your partners, implement measures on the commitment you make (most businesses grossly underestimate the size of their contribution) and then attach KPI’s so that you have benchmarks against which you can measure performance.

But if you were to do one thing and one thing only to your CSR program it would be to make ‘shared experiences’ and essential part of your platform.  Then you’ll start to leverage the return that is really possible. 

My five key points on how and why to make your CSR program a profit centre. 

  1. Engineer shared experiences - if you want to build a CSR program that builds engagement within your workplace then ensure shared experiences are an essential part of that platform.  Handing over a cheque is nice if you are the CEO or the GM who gets to share coffee and cake with the charity leader, but who else in the business benefits.  Create a partnership with your charity partner that as a fundamental core to the program has opportunities for your team to be part of a shared experience and you will benefit from a more engaged workforce.
  2. Take your pick,  but anywhere between 50% to 150% of an individuals salary is the cost of replacing them as they walk out the door.  CSR alone is not going to keep an individual who wants to leave, but an engaging program that creates meaning and opportunities for your team to “feed their soul” goes a long way to retaining them.  Staff retention is a well documented outcome of an effective and engaging CSR strategy and speaks loudly about the culture of your organisation. 
  3. “The jobs great, salary is superb, holidays are awesome - but what difference are you making to people outside the company?” If you want to compete for the best talent in the marketplace you’re going to need to do more than compete just on salary.  You’re going to need to demonstrate what the opportunities are beyond what they are signing up for and what’s the credibility of your company when it comes to addressing community needs.  Out of 1800 of a group of 13 to 25 years 80% said they wanted to work for a company that cares about how it impacts on and contributes to society. 
  4. Customer loyalty and brand differentiation is a sure way to increase your profitability as a business. Consumers are known to modify their spending behaviour in accordance with a companies CSR position.  Tags such as ‘environmentally friendly’ may contribute to the building of goodwill, but if you want to influence and change the spending behaviour initiatives such as sourcing local produce is likely to have a greater impact.  It is something tangible and the consumers then feel like they are making a difference to their community. 
  5. When you’re ready to take your CSR to the next level and really enter new markets,  generating new income streams you may wish to start considering the benefits of shared value and conscious capitalism.  Shared value is about deriving an economic benefit from addressing a community need.  One which often has been seen as too difficult or offering no reward.  Innovation in design and creative thought will lead you towards finding solutions to community issues that are directly good for business. 

If you’ve read this but still think that CSR is about the end recipient and not the donor, consider this final thought.  If your CSR program IS a profit centre back to the business then there is more to give back to the community, effectively the pie you have to carve up and give away, it grows.