Stakeholders increasingly expect businesses to be socially engaged whereas owners – shareholders and stockholders – require the highest possible profits. The difficult task of reconciling these expectations falls to CEOs. This article explores corporate philanthropy as a mutually satisfactory approach: how can philanthropy be harnessed in order strengthen the competitiveness of companies in the long term?
The “Philanthropy in CEE 2020” study conducted by Kantar for Social Impact Alliance for Central & Eastern Europe shows that involvement in social issues offers encouraging prospects for businesses. Almost half of the respondents (48%) prefer to buy products and services from socially committed brands and 44% are willing to pay more for such products and services. This trend in consumer behavior represents an important stimulus for corporate donors.
Not only do stakeholders increasingly expect businesses to become more involved in socially responsible activities (66% of respondents), but these actions have to be honest, authentic and consistent with their business mission and strategy. When the social involvement of a company adequately reflects the values of its brand, and the actions undertaken have a sufficiently long timeframe, such engagement has the potential to increase the competitiveness of the enterprise on a given market and bring about lasting, systemic social impact.
Almost half of the respondents from CEE (45%) believe that businesses are responsible for tackling social challenges. In particular, companies are expected to support the following five SDGs: SDG 9 (Industry, Innovation and Infrastructure), SDG 8 (Decent Work and Economic Growth), SDG 12 (Responsible Production and Consumption), SDG 7 (Affordable and Clean Energy), and SDG 17 (Partnerships for the Goals). This data provides relevant insight on the expectations of consumers for companies as they shape social engagement within and beyond their business.
Companies should take a multi-level approach to social responsibility. 62% of respondents believe that the support provided by companies should be compatible with their profile. It is crucial for companies active in philanthropy to also act responsibly towards their employees and business partners. Consumers will quickly lose trust in a company which does not treat its employees fairly and abuses its suppliers. Social engagement must permeate all aspects of business.
Employee volunteering presents an important opportunity for corporate social engagement. Only 14% of respondents indicated that their employer allows them to volunteer during working hours. Of those who do not have this option, nearly 4 out of 10 employees would like to devote 2-3 hours a month to social work. Introducing VTO – volunteer time off in form of several paid days off for social engagement could prove a valuable way forward, satisfying the employees and enabling the employer to support their chosen causes. Here, the employer can play a central role by highlighting issues, programs and organizations which contribute to solving social problems most relevant to their business. By introducing and developing volunteering, including skills-based volunteering, companies can increase employee satisfaction and commitment.
How can companies ensure that their philanthropic efforts work best for the benefit of their company and the society? By treating these undertakings the same way they approach other areas of their business – strategically. It is imperative that companies incorporate social activities into their company strategy, clearly define their objectives and measure both the results and impact of their philanthropic undertakings. Businesses must also ensure the integrity of their activities and communications, search for alliances, establish intra- and cross-sectoral strategic partnerships and choose partners carefully.
The reward for the companies engaged in philanthropy is the favor of customers, consumers, employees and investors, and in the future – the more sustainable development of their business and the world.
Founder of Social Impact Alliance for Central & Eastern Europe and the Talent Development Foundation. Forbes contributor. Graduate of the City University of New York (BA) and Nottingham Trent University (MBA). The first Pole to receive a post-graduate Professional Certificate in Fundraising at New York University (NYU). Values quality and cooperation.
Social Impact Alliance for Central & Eastern Europe
Social Impact Alliance for Central & Eastern Europe is an international think tank whose mission is to create a philanthropy-friendly ecosystem in CEE. It works towards systems changes and supports those who want to make a positive social impact on CEE region by building awareness and culture of philanthropy, providing quality education, tools, and affecting public policy.