CSR is Dead; Long Live Industry-Specific Corporate Social Impact
Resources being spent addressing social needs without the structure of a business model are unsustainable and therefore incapable of having any significant impact.
The business world can seem overly complex to the charity sector; an ‘us versus them’ attitude has always prevailed, making collaboration between the two sectors an all too rare occurrence. But this kind of attitude actually hinders the good intentions of many charities and effectively halts progress. It really is deceptively clear, business works by fulfilling the needs and wants of society at a profit – profit is key. This is new money to the business, a new asset that can be leveraged to make more and then the model for making more can be scaled to multiply that initial profit exponentially. This simple economic principle is the single greatest reason why charities are, at their core, vulnerable. The easiest way to explain this is to follow the path of money. All wealth is created through business; all revenue to the State stems from the taxation of business and private incomes are earned through business. Therefore it stands to reason that all NGO grants or private individual donations derive from one single source, and that is, income from business. I have heard it explained that business is the engine of economy while the charity sector might well be described as being fuelled by the gas/petrol vapours, they consume what is left over until its resources are exhausted. And the lack of a business model ensures that irrespective of goodwill and even good fiscal management, the resources will run out. There is a simple explanation for this, without the business imperative to leverage resources, non-profit organisations spend until the resources run
Now if we can harness the power and profit-generating capacity of big business and marry that with the social integrity of non-profit
organisations, by introducing industry-specific innovation, then we can start to effect real change, impactful change.
This is the essence of Corporate Social Responsibility or Corporate Social Impact, as I prefer to think of it. Successful CSR is about more than just giving. In fact, cash donations are the least efficient use of an organisation’s talents and resources. Position, influence, ability to identify opportunities to innovate and willingness to take action are the true assets that a business can leverage to create social change. There is a unique opportunity to collaborate with competitors, harness goodwill within the industry and, more importantly, become influencers and thought leaders within your own industry. At the moment companies tend to use the term ‘Corporate Social Responsibility’ as a buzz word without fully understanding what it means. This is evident when they list their CSR initiatives as charitable donations. Certainly, a charitable donation locally might form part of an overall CSR strategy but in itself is not CSR. In fact, this element of marketing tokenism and inability or unwillingness to think big is a real impediment to a successful CSR strategy. It can be demoralising for the company when their donation has no impact. This directly affects employee and stakeholder buy-in, if not initially then certainly in the long term. But we are entering a new era of CSR in Ireland, post-recession.
There is an opportunity for the business community to re-define what Corporate Social Responsibility, hopefully with the emphasis on industry-specific impact. It is my view that all beings thrive in balance; a commercial organisation is a living and breathing organism, as such, reciprocity is vital for any CSR to be sustainable. There must be mutual benefit. Companies are made up of human beings and human nature requires ‘wins’ for the sustained motivation effort. The ‘win’ for a company, in addition to doing good, is the positive PR that results. The project can be included in marketing initiatives to prove the company’s desire to help their industry. More significantly, leading much needed change within the industry, for the benefit of society, established the driving company as thought-leaders within their industry.
Successful CSR does, and rightfully so, have a positive impact on the company’s bottom line. Keeping this bottom line growing is what will fuel further CSR projects.
I believe that the business community has a large role to play in social change and my mission is to help these organisations to give back to society in a meaningful and impactful way. I do this by turning business CSR budgets into passion projects that employees and clients can really get behind.
In November 2014, I co-founded Project RIPPLE with a local architectural firm. We realised that the same single issue was causing a range of challenges across the range of industry sectors i.e. access to affordable housing that can be delivered in a timely fashion. This was and continues to be needed for the next generation of home-buyers who want a more flexible approach to living, not just two-bed starter apartments until they are ready to commit to a three or four bed semi in the suburbs with a 30 year mortgage. Affordable housing was and is needed to service the rental market in crisis. Most urgently, such housing was and remains necessary to provide for the growing number of homeless people and families in Ireland who struggle to find safe emergency accommodation in Dublin and other cities and towns throughout Ireland. One potential solution identified for fast, affordable building was the use of converted shipping containers. The problem was that there was no framework for the compliant building and use of such a structure within the Republic of Ireland. To solve the problem, we brought together 65 companies who donated their time, expertise, industry-relationships and material resources. Over the course of three days, using only donated or sponsored time and materials, we successfully completed the fully-compliant home through and open build on the grounds of the Irish Museum of Modern Art. On the fourth day, the home was donated to the Society of St. Vincent de Paul to house a mother and her children in Longford. As a result of that project, the government finally agreed to consider modular homes for emergency accommodation.
The business community had delivered in three days what the State had failed to do in more than three years of ‘talks’. This is impact.
I understand that thinking big can seem overwhelming, especially when it is for a project that falls outside of a company’s usual business activities. But the very point of CSR is to use existing business expertise to effect the social
change desired. This requires a greater level of commitment than merely assigning a proportion of profit towards charitable initiatives. It can be difficult to explain to companies that a cash donation to local charities the least
effective use of its resources. In the absence of any CSR initiative, then of course it is better than doing nothing, however, companies need to be aware of their great position to positively impact their own industry by simply
recognising the need and applying a business model to allocating resources.
Businesses have key insights into their respective industries and are well placed to provide solutions, the route to successful CSR might well be by partnering with existing charitable, State or non-profit agencies to deliver these solutions. There is a strong case to be made for industry competitors to come together to tackle systemic failings within their industry. One recent example of this is the international banking community coming
together to campaign against laws on homosexuality in Singapore. The LGBT community internationally have been campaigning for change but were making slow progress. This unfair law, in addition to breaching human rights, causes a problem for the international banking community that needs to do business there, as doing business inevitably involves recruiting talent. The law makes working there impossible for a large number of people, which interferes with the international business community’s ability to attract top talent. This ongoing initiative or campaign is designed to have the human rights of the LGBT community recognised, which benefits society generally and the banking industry specifically. This is CSR that the corporations, their employees and their customers can get behind. This is impact.
Once again, societal problems must be addressed using a business model. To quote Harvard Business School Professor, Michael E. Porter:
The ultimate impact that business can have is through business itself.
Redefining Corporate Social Responsibility with the emphasis on impact: Corporate Social Impact (CSI)
I – Innovative: To have genuine impact, the initiative must be innovative within the industry
M – Meaningful: To achieve lasting impact, the change initiated must be meaningful
P – Problem solving: The most successful CSI solves existing problems within the industry
A – Altruistic: There must be some social benefit arising from the initiative
C – Collaborative: Successful CSI will illicit buy-in from stakeholders, clients and even competitors
T – Thought Leaders: CSI will establish the driving company as thought leaders within the industry
This CSI movement is already happening across Ireland and the UK, join us by contacting: Carol@CarolTallon.com