When I propose that corporate social responsibility (CSR) should be a profit centre back to the company, people usually have one of two responses. The first is: “That’s interesting, tell me more,” and the second is: “We give because it’s the right thing to do, we don’t want a return.”
Most businesses will implement a CSR program for one of the following reasons:
- they believe it is the right thing to do and seek no return
- it is what’s expected of them
- it’s what others in their industry are 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.
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 develop KPIs so that you have benchmarks against which you can measure performance.
5 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 shared experiences are an essential part of that platform. Handing over a donation is nice, but who in the business really benefits? Create a partnership with your charity that—as a fundamental core to the program—has opportunities for your team to be part of a shared experience. This way you will benefit from a more engaged workforce.
2. Retain staff
Replacing an employee costs anywhere between 50% -150% of that individual’s salary. CSR alone is not going to retain 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. A CSR strategy speaks loudly about the culture of an organisation, which impacts upon staff retention.
3. Attract talent
If you want to compete for the best talent in the marketplace you need to do more than just compete just on salary. You need to demonstrate the opportunities that exist in the company beyond what an individual is signing up for. You also need to exhibit the credibility of your company when it comes to addressing community needs. Out of group of 1,800 13-25 year-olds, 80% said they wanted to work for a company that cares about how it impacts on and contributes to society.
4. Brand differentiation
Customer loyalty and brand differentiation is a sure way to increase your profitability. Consumers are known to modify their spending behaviour in accordance with a company’s 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. By engaging with your business your consumers feel like they are making a difference to their community.
5. Shared value
When you’re ready to take your CSR to the next level, you may want to start considering the benefits of shared value and conscious capitalism. Shared value is about deriving an economic benefit from addressing a community need. Innovation in design and creative thought will lead you towards finding solutions to community issues that are directly good for business.