2009-10-29
5 Tips for Effective Corporate Social Responsibility

Many companies are now implementing corporate social responsibility (CSR) programs that speak to philanthropy and community involvement. According to a recent IBM study, 1,130 CEOs said they plan to increase their corporate citizenship spending by 25% on average. In a Boston College survey, 82% said good corporate citizenship helps the bottom line and over 50% of respondents cited expectations from consumers as motivating factors. This increased interest in corporate social responsibility can be attributed to the shift toward a more information intense global market. Additionally, corporate scandals like Enron and Siemens put pressure on other companies to indicate that social responsibility is an integral part of their operations. 74% of the top 100 U.S. companies published CSR reports last year, up from 37 % in 2005. Corporate social responsibility shouldn't be something that drags your bottom line. In fact, expressing goodwill can be beneficial for your company as well. Here are five tips for having an effective corporate social responsibility program.

1. Align your cause with your business
If your company is in the personal care business it probably doesn't have the resources to really help fix the education system. Why not give to a cause where you can leverage your skills, connections, or resources? To decide what cause to pursue, examine the social and environmental hazards of your industry, and think of ways to address them in ways that would also give your company an advantage and prove your competency. Find out what causes your customers care about. The Council on Foundations reports that 65% of Americans would switch to a brand associated with a good cause price and quality being equal.

2. Before you begin
Have rules for selecting a charity that clearly state how charitable donations are granted and to whom to create a sense of fairness; don't just select a charity because a senior manager has a preference. Plan your brand messaging, budgeting, strategy, and plans to coordinate your company resources and have everyone committed. Get all employees motivated and involved by having internal communications (newsletters, posters, emails). Employee volunteerism is proven to increase leadership skills and job satisfaction. If it's supported by paid time off, it even helps boost company reportable giving contributions. Instead of just assigning a leader, cross functional teams or committees are more effective in implementing corporate social responsibility initiatives. Marketing should take the lead on social-responsibility programs; they can find opportunities for product differentiation and customer loyalty that integrate solutions to social and environmental problems.

3. Be cognizant of pending legislation and prepare to disclose
Some that believe corporate philanthropy is being used to perpetrate and perpetuate scandals in corporate America. The National Committee for Responsive Philanthropy (NCRP), a watchdog, research and advocacy organization, is calling for greater disclosure for corporate giving programs. Corporate charitable gifts could also be used as bribes to encourage corporate directors to overlook financial improprieties (i.e. Enron). NCRP recommends that the SEC adopt disclosure requirements for all corporate philanthropic.

4. Attract more customers and employees
With the increasing concern about social and environmental issues, consumers want to know what a brand really stands for when they buy. A brand's reality has to match its reputation; customers want total consistency. It can give customers another reason to choose your product over your competitors, and even better, another reason for customers to be evangelists for your brand. Increasingly, employees choose the companies they work for based at least in part on the level of their corporate responsibility. Social responsibility programs are now one of the top reasons young graduates choose a company. Contributing to a cause gives employees a deeper sense of connection to the company, and the company gains a competitive advantage in staff recruitment and retention. 87% of employees at companies with corporate responsibility programs feel a stronger sense of loyalty to their employers.

5. Lower costs
Many companies are finding that the upfront cost of being environmentally friendly (like investing in solar power) is a long-term savings. Take a look at your value chain or the materials used in your products. Saving energy reduces operating expenses, but reduces carbon dioxide emissions at the same time. This saving can roughly reach the area (depending on the type of company) of 0.5% - 5%. Having integrity in your manufacturing process is not an only a way to account for environmental impact and comply with legal standards, it's a way to prevent consumer complaints. Being responsible means being a step ahead of legislation so your company is prepared when legislation is enforced.