Tag: Public Relations

Everyone knows that companies love to label products and write checks for their philanthropic gestures. Until recently, check-writing practices have been the focus, and sometimes only part of, a company’s CSR practices, but as the tides change and stakeholders require more responsibility we’re seeing companies integrate CSR practices in a variety of ways. Companies are touting responsible and sustainable products, better corporate cultures and employee volunteer days on company time – but one thing still exists – writing checks. But where does this money go, and what, exactly does it buy?

With many organizations, we still don’t know. Giant-check ceremonies seem to have gone by the wayside, but the the giant dollar signs are still being handed over. We know non-profits are expected to spend the majority of the received donations on their causes but, as seen with the Susan G. Komen foundation and Wounded Warriors, that’s not always the case. It took whistleblowers to bring to light that these nonprofits were spending the donations on lavish outings for board members and employees. While one could simply blame those in charge of the nonprofit, we also need to look at the companies that were supplying the funds. Susan G. Komen, for instance received money from organizations large and small, and it became a proud CSR moment when a company boasted “we donated $1,000,000 to Susan G. Komen.” It’s an example of the perfect flaw – donate money to a cause and you assume they’re going to do with that money what’s appropriate, with little or no follow up.

When looking into how to integrate CSR practices into a company, everyone suggests making sure the nonprofit’s mission and values align with your own and that the organization has the support of your stakeholders. It’s assumed that by having stakeholder support and aligned missions and values that the money will be spent to support those missions and values. Sometimes, as we’ve seen, that’s not the case. But communications from the corporations still purport that they donated significant dollars to help Children’s Literacy. But what did their dollars buy to support Children’s Literacy. Did they cover the cost of books? A teacher’s time to read? Administrative costs? No one really knows. The closest you can get to finding out is looking at each individual nonprofit’s 990 tax forms – to which you can see the admin costs and a general breakdown of where money was spent. However, even that doesn’t tell you specifics. While nonprofits do need funding to exist, perhaps there is a better way to fund?

Many companies don’t even tell you what nonprofits they’re donating too. It’s a general “making the world a better place” and “we choose organizations that support our mission to end child literacy” but which organizations are they? And how much money is going to them? On the other hand, however, companies like 3M have proven to be open about their donations and have completely integrated their CSR practices into their corporate identity – including their check writing. In its 2017 Sustainability Report, 3M discusses its donation to the National Museum of African American History and Culture by telling it gave more than $5 million to be a founding donor and donated touch screens for interactive exhibits. They also explain the $20,000 they handed out in GlobalGiving gift cards. The recipients of the cards can go onto the GlobalGiving website and choose an organization or cause to then donate that money too. If the gift card expires before a donation can be made, the money goes to GlobalGiving, also a non profit, to help fund the organization. But then again, the question comes up, where does the money that’s donated on GlobalGiving go to? This model is a bit more clear. Since it’s similar to crowd-funding websites, the column that would normally list what you receive for the price of your investment instead lists what your donation can buy: $100 will buy 300 books, for instance.

When it comes down to it, what we know is nonprofits need money to do what they do and corporations should and do give money to help support the causes. Unless Responsibility Reports become common practice and are as detailed as possible (which would require extreme due-diligence within the corporations), the public may never know exactly how much money is going where and to what. Perhaps it’s time to stop measuring CSR in dollars spent but instead in time and impact – will 3M let us know how many people used their screens to learn about African American History? Perhaps the answer to better check writing is more monitoring and evaluation, because for all the companies that donate responsibly, there’s just as many that don’t.

The concept of Corporate Social Responsibility isn’t new. Since the 18th century, Cadbury and Johnson & Johnson have incorporated social responsibility into business practices; however,  the notion was far and few between. While corporations today are expected to have some form of social responsibility integrated into business practices, it begs the question: why?

Most top business executives have come to agree that Corporate Social Responsibility (CSR) matters. In fact, according to the PWC 2016 CEO survey, 64% of CEOs believe CSR is core to their business, while the Reputation Institute ranks CSR-centric values as the major contributing factor to corporate reputation. Taking these two facts into consideration, Mitt Romney wasn’t wrong when he famously stated in 2011 that “corporations are people” but, he wasn’t exactly right either. Although, he did have a point. In day to day life, people have an impact on their environment. They make choices that have consequences and must live with those consequences. They’re guided by personal values and missions – reasons for existing. Corporations, while made up of people, act in similar ways, but on larger scales. The choices they make have consequences that they must live with. They’re guided by values and missions. They have a day-to-day impact –  and impact is what it boils down to. A single individual may value saving the forest, but there isn’t a lot a single individual can do. For example, a paper mill needs forests and may value sustainability. As a large entity the paper mill can make a substantial impact on deforestation than the individual simply because it has a greater set of resources. On the other hand, corporations also make a more significant negative impact. If the paper mill chose not to care about sustainability, they would still be impacting the environments it operates in. However, if it were to not care, it would give itself a deadline for business. Just like people, corporations want to exist for as long as possible, and by not caring about its negative impact it is simultaneously writing its own death note which argues that CSR just makes good business sense.

It also makes good business sense because stakeholder don’t just want responsible companies, they demand it. With the rise of social media and instant information, pessimists would say the millennial generation is wishy-washy, opinionated and incapable of being satisfied but it’s also a generation that has lived through ruthless marketing and propaganda leading to the second largest economic crash in history and was left with the mess to clean up. It’s no wonder they’re also the most skeptical generation since the Silent Generation while simultaneously being more brand loyal than any other generation. But those loyalties come at a cost. According to a 2015 Cone Communications Millennial CSR Study, more than 90% of millennials would switch brands to one associated with a cause. With millennials representing  $2.4 trillion in spending power, it’s in the best interest of corporations to give them what they want – socially responsible organizations.

But it’s not just where they spend their money – millennials, who are estimated to make up 75% of the workforce by 2025,  prefer to work at organizations that are socially responsible. The 2016 Cone Communication Millennial Employee Engagement Survey found that 64% of millennials consider the social and environmental practices of a company when deciding where to work and the same percentage won’t take the job if the company doesn’t have strong CSR values. Additionally, 75% say they would take a pay cut to work for a responsible company. Comparing these numbers to Gallup’s finding that only 29% of millennials are engaged in their current job, CSR practices then offer an opportunity for businesses to engage and align with employees.  

Corporate Social Responsibility matters because it adds value to corporations and the people that make them up. Individuals demand it because it gives purpose to the menial tasks of everyday living, purchasing and working. Corporations need it to be sustainable and contribute to its purpose. CSR matters because it is the effective way to impact business and stakeholders simultaneously.