There’s no ROI in CSR…?

No CSR in ROI?

A recent issue of Catalyst, the journal of the Chartered Institute of Marketing, included an article entitled “Get What you Give”. The article proposed that philanthropy in Corporate Social Responsibility should be scrapped in favour of ‘Brand Citizenship’ – which would mean only supporting causes that could be directly and obviously linked to the business, and this connection needs to be “walk-by understandable” by the consumer.

The rationale was that this would help move away from ‘giving in secret’, which, it maintains, does not benefit the giver and would make justification to the Board simpler. This simplistic, and somewhat selfish, linking of an direct ROI measure to CSR concerns me and, I believe, actually doesn’t address the underlying issue anyway.

The future of corporate giving

In their 2013 report, “The Future of Corporate Giving”, the Charities Trust carried out a literature review, an online survey and interviews with global thought leaders to identify four, intertwined trends for the next decade, of which the second also seems to tie in to this move toward direct alignment:

  1. New technologies, innovative channels and interactive media will cause an explosion in ground-breaking new practices.
  2. Companies will seek long-term profits from their corporate giving and align their activity with something “meaningful” for the business.
  3. Large-scale, multi-stakeholder coalitions will harness collective skills and drive transformational change.
  4. Billions of consumers will be mobilised to give up their time, second hand items and fresh ideas to community causes.

 Philanthropy can win

While it is undoubtedly good to benefit any worthwhile causes as part of a CSR strategy I think that there are dangers with only donating to those with an obvious connection to the business success.

Firstly, over time, this could lead to development of two tiers of worthy causes – those that benefit because of their obvious links to companies and those that don’t. Look what has happened to big pharmaceutical drug research over the years – money poured into finding cures for diseases of the wealthy but not into third-world problems.

Secondly, I actually think that the rise of consumer preferences for defining their own social ‘worthiness’ by shopping with brands that are socially responsible will benefit those business who actually give to causes that are not obviously linked. Many consumers would look with suspicion on brands donating to obviously directly benefit themselves.  It is perfectly possible to improve PR and awareness to ensure that philanthropic giving is seen as positive by consumers – this would address the issue of ‘giving in secret’ while still benefiting from an image of giving for good reasons rather than a direct financial return.

The fourth trend in the Charities Trust list talks about Companies facilitating large scale donations through “movement fundraising”. While providing an infrastructure to enable consumers to donate is worthy, and good causes will benefit, is this really ‘CSR’?  When I put a can of baked beans in the donations basket at my local supermarket it is me that is giving, not the supermarket. It is my philanthropy – not theirs.

The nature of business has to change

I believe that the future should be to develop business models that have at their heart the strategy of benefitting good causes, not as an afterthought but as a central core value. Numbers 1 and 3 on the Charities Trust list are absolutely the key trends that can drive this development.  New technologies (trend number 1) will enable collaborative coalitions (trend number 3), and in the words of the report “Corporate giving will build loyal and effective working relationships with customers, suppliers, not for-profits and government agencies. Collaboration, including with competitors, will amplify impact and a philosophy of social action will emerge. Big businesses are going to be bigger stakeholders in ‘fixing’ the world. The setting aside of competitive differences will benefit both commercial organisations (in terms of enhanced reputation), and the causes they serve.

This view of the responsibilities of businesses to wider society was a key driving force for CEO Martin Kelly in setting up INNOVO as a unique B2B marketplace that benefits good causes as a standard part of its business processes. See him describe it in his own words – watch this video on INNOVO for Good.

With some evidence of the increasing value placed by consumers on doing good, do you see an increasing role for corporates in charitable giving? How do you think it could be woven into the fabric of business? Is this a new area for commercial innovation? Join the discussion!

First published on INNOVO Blog

Leave a Reply

Your email address will not be published. Required fields are marked *