Social responsibility is good for business, so why is corporate giving so low?
It’s hard not to be cynical when you hear companies boasting about their values. After all, both Worldcom and Enron were once seen as leading lights when it came to corporate social responsibility (CSR), as was Volkswagen.
If the recent emissions scandal tells us anything, it is that it’s very easy for big businesses to talk the talk, but far harder for them to commit to making a positive contribution to the community and keeping to it.
Not surprisingly, many of us are sceptical of companies’ claims to want to do good. And why wouldn’t we be when some organisations still continue to engage in CSR in a tokenistic way? While we’re beginning to see an end to “chequebook CSR”, in which organisations typically throw a few grand at a charity and turn up for a photo opportunity with an oversized cheque in hand, firms can still be somewhat patronising when it comes to community involvement.
“The pressganging of employees to paint a wall or a fence hasn’t completely gone away, unfortunately. It’s something that’s generally not good for staff, is useless for the charities involved more often than not, and is usually something that is a bit cringeworthy overall,” said Deirdre Galvey, chief executive of the Wheel, a representative group for community and voluntary organisations and charities across Ireland.
“Having said that, more companies are now turning away from chequebook CSR and photo ops and becoming involved in developing long-term partnerships with organisations that result in positive projects,” she added.
According to Business in the Community Ireland (BITCI), a not-for-profit organisation that helps companies develop and measure their CSR strategies, it is increasingly employees who lead the way in terms of deciding what type of initiatives their organisation will engage with. Moreover, according to Moira Horgan, marketing manager for BITCI, CSR has become increasingly important to organisations, not simply as a marketing tool, but as something essential in aiding recruitment and retention
“Employees increasingly want to work for value-driven companies and, given the war for talent, organisations have to take it seriously,” she said.
Lynda Stopford, a consultant and formerly chief executive with the School for Social Entrepreneurs (SSE) Ireland, which offers learning programmes for people with an idea or start-up venture with a social or environmental benefit, agrees.
Stopford, who has helped large corporates such as JP Morgan and Diageo with social giving-related activities, agrees that CSR is increasingly important.
“Twenty years ago CSR was an optional thing, but that’s no longer the case. Whether they like it or not, companies now need to have it built into their business. Whether it is a success or not depends on how seriously they take it. At the end of the day, it’s usually very easy to separate the wheat from the chaff simply by looking at the amount of time, money and energy a company commits to projects,” she said.
A recent survey of over 700 business leaders and 2,000 consumers, which was commissioned by PR firm Forster Communications in the UK, showed many companies are wary of attaching themselves to some initiatives. According to the study, many of the organisations were keen to help people back into employment, support local communities and engage in environmental issues. They were less willing to get involved with more difficult matters such as reducing loneliness, tackling homelessness and providing better care for older people.
“We know there are many exciting examples of businesses working around core issues, such as employability. However, there remains a real opportunity for progressive organisations to look beyond the expected and find ways to tackle less ‘popular’ issues, such as loneliness or mental health, that have a critical impact on individual quality of life,” said Amanda Powell Smith, chief executive of Forster.
Many of those working in the NGO sector in Ireland insist companies here aren’t as afraid of getting involved in less glamorous social issues such as homelessness as in other countries, but say there are still some areas of which they are wary.
“Companies nowadays tend to do what their employees want them to do and generally Irish people want to play it safe, so the projects that organisations here are involved in tend to reflect this. Having said that St Vincent de Paul is a hugely popular charity brand that is at the forefront in dealing with unpopular issues such as social justice and poverty, but that is largely the exception,” said Garvey.
Stopford agrees certain issues remain somewhat taboo.
“Mental health in particular is a tricky issue and I know of many organisations that have hesitated to get involved in campaigns around it,” she said.
“The company formerly known as O2 was clever in teaming up with Headstrong for its ‘Think Big’ initiative, which supported young people running entrepreneurial projects around mental health because that was relatively clean and straightforward.
“Generally companies are a little concerned about possible damage to their brand from being associated with adult mental health issues because, if you’re really going to tackle this, then you have to engage with alcohol and drug misuse, possible abuse and so on. That’s difficult stuff and probably won’t look good on posters and in annual reports,” said Stopford.
While Ireland has a proud tradition as a generous country when it comes to giving, it’s surprising how little the corporate sector gives back to the community.
According to figures from BITCI, over €22 million was contributed to community groups and organisations by Ireland’s largest companies last year. The breakdown consisted of over €10.5 million given in cash donations; €8.6 million from in-kind donations and almost €3.5 million was raised through employee fundraising. Employees also volunteered over 212,000 hours to local groups and projects during the year, up from 162,000 in 2013.
This all sounds pretty impressive. However, corporate giving in Ireland remains extremely low with estimates suggesting that between 2-3 per cent of Irish NGOs’ income coming from corporate donations. This compares to around 1.4 per cent in 2005, according to Philanthropy Ireland figures. That was less than 0.1 per cent of pre-tax profits of the top 500 Irish companies at the time.
“A number of studies show that corporate Ireland lags behind European standards in terms of giving and there’s no doubt that many could be giving more,” said Eilis Murray, chief executive, Philanthropy Ireland.
Garvey agrees. “Companies are seen as a valid source of income that charities need to go after and a lot of them spend significant amounts of time looking for sponsorship from companies. “But while many charities may see companies as easy pickings in terms of raising finance, the amount of money flowing into them from the corporate sector is on the low side,” she said.
There’s no doubting that companies are becoming much more sophisticated in terms of their approach to CSR with many now seeking to align such projects with their business strategy. Horgan said, though, that firms’ approaches to CSR can sometimes be somewhat fragmented.
“We’ve been encouraging companies to work together to focus on specific issues in the community and that’s definitely a trend that is taking off. Organisations are realising that working with each other can be much more effective than doing it alone,” she said.
This article was taken from here.