Your CSR program should be improving staff morale, increasing your staff retention rates and it should be a profit centre to the business.
If you’ve already got a figure in mind around what you think you should be investing in CSR, it probably means your strategy is wrong to start with. Sorry, but it is. If you are looking for someone to run an eye over your profit & loss statement and tell you what you can afford to give to charity, again this is the wrong approach.
The traditional approach to corporate social responsibility (CSR) is someone quite senior in the business, and in the case of small business this is generally the owner, deciding through the best intent that they want to give back to the community. They then pick an arbitrary figure that normally has no science behind it, but feels good. Or the decision may be based upon a percentage of net profit that the business owners feel can be shared.
The problem with this approach is that you are setting the program up as a cost centre within the business, when an effective CSR program will be a profit centre to the business. If you are diverting funds towards a charity or community project, you should understand the true cost and the return, otherwise it is just like paying a tax and we all do enough of that.
A better approach
What I would suggest as the better approach to your CSR strategy is to follow a process similar to bellow:
- Gain an understanding of case studies and opportunities that exist within the CSR space which are not dependent solely on the donation of money.
- Lead your entire team through a discussion on the opportunities that exist within the CSR space and invite them to be part of the decision making process.
- Identify a set of guiding principles that are important to your business around who it is you want to partner with.
- Identify opportunities for shared experiences.
- Identify the return on investment you are going to make and, more importantly, how you will track the investment and return.
- Select charity partners who are aligned to your values and ensure they can offer you the shared experiences that will maximise your investment.
Your CSR program should be improving staff morale, it should be increasing your staff retention rates and it should be a profit centre to the business. If it isn’t, you are seriously leaving money on the table.
A successful program
One of the most successful and unique programs have built in the CSR space was for the Sheraton Grande Hotel in Sukhumvit, Bangkok. The General Manager of the Hotel was seeking a CSR program, but due to challenging economic conditions they didn’t have the profit to carve a portion off to giveaway. The program built was based upon the expertise of the guests who were staying at the hotel and we leveraged their knowledge to develop charity leaders in the surrounding communities.
The program was a huge success for the hotel, improving its brand image, strengthening its customer loyalty and importantly bringing new business to the hotel. All the measures that we put in place to assess the effectiveness of the program were met. And yet the hotel invested ZERO dollars in the platform.
Donating money gives low return
Donating money is one of the easiest and least engaging forms of giving. It makes sense then that the return to the business is often very low.
Your CSR program should be improving staff morale, it should be increasing your staff retention rates and it should be a profit centre to the business. If it isn’t, you are seriously leaving money on the table – and what small business can afford to do that?
When you get your program right it will bring benefits back to the business and benefits to the community you may choose to support. As your business benefits the pie grows and you have more to share, which means it makes sense for you to profit from your CSR platform.
Not just for the big guys
Finally, in small business you may consider that CSR is the domain of the large corporate only; the answer is no. In my latest book, Doing Good by Doing Good, I profile two businesses, one with six and one with 20 employees, that both have effective CSR programs that return real value back to the business. The commitment doesn’t have to be large; it just needs to be effective and part of your strategic plan for growth.
So if you are considering making CSR part of your business, and I’d suggest it is wise, too, then consider how it is going to bring a return to your business and look for opportunities for shared experiences before you start just handing over your hard-earned cash.
Peter Baines OAM, Keynote Speaker, business consultant, Founder, Hands Across the Water, author of “Doing Good by Doing Good” (Wiley)
This article first appeared in issue 9 of the Inside Small Business quarterly magazine
