When doing good is good for business

In this article, Hayley Morris discusses the concept that community investment or corporate philanthropy can and should be managed strategically in a way that aligns with corporate objectives, resulting in better outcomes for both the community and the organisation. 

 

Recently I was facilitating a workshop with a hospitality group with the intention of creating a sustainability strategy for the company. I knew that a few of the restaurants in the group donated money and vouchers to local football clubs and school fundraising drives and fetes. I asked whether they were measuring the financial value of this contribution across all of their businesses.

 

The CEO responded to my questions; “but we don’t do that for sustainability, we do that because it’s good marketing and good for the business.”

 

The response got me thinking about the general misconceptions that the word ‘sustainability’ carries. Unfortunately, sustainability has been incorrectly categorised as a business agenda reserved only for those with spare cash and resources, and therefore, any decision that a business makes to grow revenue or cut costs could not possibly be a sustainability initiative. 

 

However, the definition of sustainability, put simply, is the capacity to endure, and who doesn’t want their business to last? In practice this means considering the economic, social and environmental factors that will affect your company’s ability to sustain itself into the future.

 

It means you need to consider:

      • Your financial performance and anything that may impact your economic sustainability in the future such as change in consumer trends and preferences.

 

      • Your performance as an employer and the welfare and satisfaction of your employees and even the employees of those you indirectly hire within your supply chain (such as offshore product manufacturing).

 

      • Your impact on the environment and ensuring the ongoing provision of resources you need to operate your business, as well as a safe and stable climate to operate your business within.

 

Returning to the conversation about donating to the local football club and/or school being about branding and not sustainability, a couple of points to consider:

 

1. Community giving or philanthropy does not only need to be a selfless act of doing good. A company giving program can provide benefit to both the community and company, contributing to the sustainability of the business and community in which they operate.

 

When a restaurant donates food and beverage vouchers to a local school raffle, the restaurant receives exposure to their target market and the school raises money. A win-win situation.

 

Strategic community giving or engaged philanthropy is not limited to small business, the world’s largest companies know the commercial benefits of giving back. Coca-Cola has a large Community Water Program that aims to “support healthy watersheds…to balance the water used throughout our production process”. Cadbury’s Australia has taken their dairy milk chocolate Fair Trade certified and in the process have helped 55,000 farmers in Ghana to receive a fairer price for their cocoa as well as invested in the health and environment of the communities.

 

Coca-Cola and Cadbury’s are just two examples of large companies that have realised doing good is good for business.

 

2. Measuring your community giving program will allow your business to make strategic decisions about future community investment and philanthropy

 

If your business starts to measure your local community investment in dollars, area of focus and motivation and compares this to other economic and social indicators you may find some interesting patterns emerge.

 

For example investment in your community may increase repeat customers, build you brand and grow revenue during a specific period of a campaign or sponsorship. In addition, companies with active community giving programs generally attract and retain good employees (lowering recruitment costs), and happier employees are more productive and absent less.

 

Paul Mansi, the CEO of Radisson Blue Edwardian Hotels, a luxury hotel group in the UK, says “Placing an emphasis on sustainability makes good business sense for us. We were one of the first hotel groups to start doing this in 2008 and remain committed to maximising profits through doing the right thing, reinforcing our customers’ trust in the brand at the same time.”

 

My concluding message to the CEO in our strategy workshop was that community investment does not just need to be a selfless act of charity, there are numerous benefits to investing in your community and there is no shame in reaping the rewards!

 

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Impact Sustainability can help your business create a sustainability strategy with our three-hour strategy workshop. This workshop will help you establish the key indicators to measure that are relevant to your company.

 

Our sustainability performance management software allows companies to measure their sustainability performance across environment, workforce and community investments. The community investment module allows the measurement of cash donations, employee time, product donations or costs associated with managing your community program.

 

Contact us to discuss our services or for a demonstration of our software today.