Social responsibility and corporate support of good causes
Written by Sheridan Bruce for Charity Viewpoint 2016 - a joint publication by the Fundraising Institute of NZ, Philanthropy NZ and Volunteering NZ - July 2016
The tragedy of the Christchurch earthquake in 2011 saw a spike in corporate support of the community with corporate (cash) giving peaking at around $100m for that period. But this level of corporate support has dropped to $77.2m in 2014 with this form of giving representing only 3% of total giving in New Zealand compared to personal or individual giving representing $1.53b (55%) and giving by trusts and foundations representing $1.18b (42%).*
Traditionally, corporate giving for charitable purposes has not been seen as appropriate unless giving was ‘business like’. The argument was that management could not give away shareholder’s money because it was the social responsibility of the business to increase its profits with self-interest playing a large role in corporate giving over the past 100 years. The benefits of traditional corporate giving have been weighted heavily on the side of the corporate but over time, for those corporates that take social responsibility seriously, they can see how partnerships with community and charitable organisations can help enhance their business standing and profile while also contributing to driving social change. More corporate support of the charitable sector would contribute to the sector’s sustainability and there are plenty of examples and opportunities where this is the case.
There are a number of ways charities and businesses do work together, not only to fulfil each of their own missions, but collectively to make more of a difference for the communities they serve.
Partnerships develop when parties work together to resolve community issues or problems. Successful partnerships involve corporates actively engaging with charities in the delivery of outcomes with both the charity and corporate investing in resources and budget to deliver on those outcomes. For the corporate, this may be contributing much more than a cash injection, but the investment of the corporate’s expertise and knowledge, labour force, services or products, all or partially deployed to maximise benefit to the cause.
Successful partnerships will have charity fundraisers and sponsorship managers who understand the needs of the corporate and can balance these with delivering their charity’s mission. In addition, relationship skills and communication and marketing acumen will help drive recognition for the corporate. A well-executed partnership will improve staff engagement and networking for both parties and should positively impact on fundraising programmes.
Corporate giving and community involvement should be an expression of corporate responsibility driven by the identity, special risks and opportunities the company faces in society. By being strategic, as expected from all other areas of corporate performance, corporates should choose to work in areas of social need and specific geographies where they can make the biggest and most appropriate difference.
In a sponsorship, obligations are clear – the charity is delivering something to the corporate; usually some kind of name recognition and publicity and promotion. In effect the corporate is buying a service from the charity with the corporate either paying in cash and/or in kind. Sponsorship is commonly associated with high profile events or activities which have the potential for huge public engagement including sporting events and performances in the arts.
When considering corporate support, charities need to be clear what they want from the relationship. Untagged funds or help in resolving a problem? In recent years there has been a shift away from one-off donations to more strategic corporate community investment so commitment to a long term partnership will contribute to a more sustainable fundraising programme and relationship.
Entrepreneurs and charitable foundations
Shared goals are the driver to establish a corporate partnership. And this is taken to the next level when socially minded entrepreneurs through their own charitable foundations deliver services to the community. Neither a partnership nor sponsorship, this form of philanthropy is usually driven by the passion of the philanthropist and can be sustainable when the philanthropist has a special capacity to tackle particular social issues, can influence and mobilise others to act including corporates, and deliver to the community sector tangible and much need funds, products and services based on clearly defined outcomes and impacts.
Corporate community involvement can be low key and long term with impacts that may be hard to see. So measurement frameworks need to be implemented to help explain to internal and external stakeholders that they are a good corporate citizen and are actively involved in trying to influence a social issue. Corporate donations are a good thing but so too are social investment and many commercial and shared value initiatives. They each in their own way address community problems using the brand and resources of the corporate, which says a great deal about the values and sense of responsibility of the corporate. Charities are urged to consider how corporate partnerships could work for their cause to help improve sustainability and the fostering of broader supporters to their cause. It shouldn’t take an earthquake to galvanise business to support their community. There is too much need in our communities for corporates to be disengaged and unaware of the good they could be doing by working alongside our hard working community groups and charities in New Zealand.
* Giving New Zealand, Philanthropic Funding 2014.