Corporate social responsibility (CSR), or corporate citizenship, in today’s PR-savvy environment has evolved significantly since it started to take hold in the 1970s. No longer a nice-to-have, it is now table stakes for modern businesses, which may come as no surprise considering 62% of consumers want companies to stand up for issues that they are passionate about. CEOs are starting to take notice, too. In fact, 93% of business leaders believe that businesses have a responsibility beyond making profits to also improve the world.
For many nonprofit leaders, securing sustainable sources of funding is undoubtedly the greatest roadblock to having a greater, more effective impact on communities and people. Research shows that 81% of nonprofit leaders say that access to capital is their biggest challenge.
Currently, the majority of giving in the U.S. comes from individuals, whose donations account for 70% of the total charitable giving to nonprofit organizations. By comparison, corporate giving only accounts for 5% of the total donations. Amid the growing belief that businesses have a responsibility to improve the world, companies have an opportunity to undertake new and innovative ways to fund nonprofits that help them better accomplish their business objectives and create tangible change in the communities in which they operate.
Awareness Is Overrated, Real Impact Requires Action
It’s true that purpose is becoming a prerequisite for competitiveness, but that doesn’t mean businesses should use CSR activities simply for PR to send the message that they are “purpose-driven” firms. Consumers can quickly detect these marketing gimmicks, which are bound to backfire. Instead, it’s critical that companies turn their social impact talk into real action.
From a marketing perspective, a social impact campaign that lacks action is a missed opportunity. One way brands can create a truly authentic campaign and show consumers how they’re supporting a cause with tangible metrics is to leverage nonprofits and their expertise on a given cause. These campaigns can significantly boost a brand’s image and expand the company’s reach, considering Americans are 68% more willing to share content from purpose-driven firms with their social networks over that of traditional companies.
This approach to social impact marketing not only creates more value for the brand, but it can also generate entirely new sources of funding for nonprofits by tapping into the company’s marketing budget.
Considering the total spending on advertising is expected to exceed $240 billion in the U.S. this year, there’s a massive opportunity for more companies to generate new funding to progress the most important project across our most pressing issue areas.
Don’t Forget, It’s What’s On The Inside That Counts
From a consumer standpoint, a company’s cause marketing focus — take female empowerment, for instance — won’t come across as authentic if its supply chain operations perpetuate the discrimination of women or if it fails to pay its female employees wages equivalent to their male counterparts. In today’s digital and hyperconnected landscape, externally supporting a cause isn’t sufficient. Consumers not only want to hear that a company is standing up for a cause, but they also want to see how its spending and operations ladder up to advance its larger purpose-driven commitment, too.
Today, innovative companies are identifying new ways to embed social impact into their existing business activities — from the way they manufacture their products to the tactics they use to sell them, which also presents new ways to fund nonprofits and social impact projects. For instance, financial decision-makers can strengthen the company’s purpose approach by actively identifying the most ethical and sustainable sourcing options. Sales teams also have an incredible opportunity to stand out against their competition by using social impact as a unique sales differentiator. By offering to fund for a nonprofit as part of a sales proposal, businesses can improve their client relations and win rate, all while opening new sources of funding for impactful nonprofit programs.
Ultimately, these innovative funding projects also create compelling storytelling narratives that marketing teams can leverage to showcase their company’s purpose in action. Real stories with real people that convey meaningful metrics are essential for creating a compelling and authentic social impact narrative.
Don’t Silo CSR, Use It As Your North Star
Central to any company’s purpose proposition is its CSR program. Yet too often, CSR is parked in a corner. Given the fact that 66% of Americans would switch from a product they typically buy to a new product from a purpose-driven company, it’s imperative for businesses to establish a unified approach to purpose that’s consistent across departments, especially marketing and operations. The only way to successfully integrate social responsibility into all of the company’s business practices is to embed social impact into its competitive strategy.
To make this a reality, companies should systematically approach purpose. Starting with the CEO and executives, the company’s leadership team must be aligned on the company’s statement of purpose and the causes it supports. Once the C-suite has a clear North Star, managers and team leaders are responsible for translating this mission into action for their teams and sustaining this sense of purpose over the long run.
Whether it’s HP’s commitment to diversity and inclusion as seen through its work with Black Girls CODE or Sweetgreen’s decision to provide five months of parental leave to employees because it’s one of their core values, there are endless opportunities to create value internally and externally by using purpose to excite, attract and empower employees.
Ultimately, companies have a growing responsibility to address society’s most pressing issues. While CSR teams are making significant strides to guide and expand their organizations’ social impact, other departments have an opportunity to contribute new ways to advance their organizations’ societal impact and generate new sources of funding for nonprofits through their everyday business activities.
