CR is increasingly defined by what a company does, not what it gives

Since the recession, businesses have been faced with an increasingly cynical public who are more concerned than ever about the ethics of the brands they choose to engage with.

Working at the Charities Aid Foundation (CAF) with some of the most recognisable businesses and brands in the UK on their corporate responsibility programmes, I’ve definitely seen this shift for myself over the last five years.

Corporate responsibility is increasingly defined by what a company “does,” not what it “gives”. Businesses are increasingly concerned with demonstrating that they uphold and nurture principles and values, which align to areas of social and environmental need.

To achieve this, they are dedicating larger budgets to tackling key social issues to deliver positive impact; not just to better connect with their consumers but to demonstrate that they can play a critical role in tackling critical problems with the use of their intellectual resources and physicals assets.

Companies are no longer able to outsource good deeds via charitable efforts, but have to focus on ensuring that everyday business practices “do no harm”. Therefore, we see them approach this work in many new ways, rather than considering it merely as a financial transaction.

We see telecommunications companies applying mobile technology to solve development issues whilst others are harnessing new financial mechanisms, such as social investment, to encourage sustainable practices amongst charities.

The thought of philanthropy being purely a transactional currency is being debunked with the realisation that it has the power to drive transformational change, which places companies at the centre of solving some of the fundamental issues that effect us now and in the future.

Figures from a recent CAF report, which looks at the corporate philanthropy of the FTSE 100 over the past six years, prove that this is overwhelmingly true, at least for the nation’s leading companies.

The amount they have donated to charity – including cash, in-kind donations and the value of volunteered hours – has almost doubled since 2007, rising by £1.2bn.

Despite consumers spending less and budgets being squeezed during the difficult economic conditions of these years, businesses have still managed to grow their charitable work.

High consumer standards
However, despite this clear increase in philanthropy and an evident desire to meet higher consumer standards when it comes to reputation and demonstrating a desire to contribute positively, this shift in attitude and behaviour is not being registered by the public. Our report revealed a worrying disparity between the amount of charitable work being done by companies and the public understanding of it.

Whilst people think a third of FTSE 100 companies make donations to charity every year, in fact nearly all of them do.
At least 98% of companies reported giving in any given year of the survey – and in 2012 all 100 said they made a donation.

The generosity of each of the different sectors and how they compare is also widely unknown. Whilst people think the top two business areas in terms of giving to charity are consumer services and consumer goods, these are actually fifth and sixth on the list. Healthcare businesses give away the most by far, donating 1.56% of their revenue over the six years covered by the report. This is followed by basic materials – made up of companies involved in the extraction of raw materials, including mining – financials and telecommunications.

Lack of transparency
So corporate philanthropy is thriving – but it is failing to capture the hearts and minds of the public. Some of this certainly comes from a lack of transparency and an inconsistency in the recording of this kind of activity. The very process of compiling our report was enough to realise this.

But the problem is even more fundamental. Businesses need to take a step back and re-examine their philanthropy and how they can make it more relevant both to their own organisation, their employees and the people who engage with their business. They also need to think about what narrative they want to be telling through this work and, most importantly, find better ways to communicate it.

The Thomson Reuters Foundation has a very compelling narrative. They use the key skills their organisation is founded upon to eradicate problems all over the world.

They stand for free independent journalism, expose corruption and provide media and journalism training – incorporating their core abilities as a business into the mission of their philanthropy. This is the approach most likely to resonate with the public – particularly those who engage with your brand to begin with.
But it’s not just about what you do – it’s the way you do it.

Kenco have recently launched the campaign Coffee vs Gangs, providing training for young Hondurans as coffee farmers and giving them an opportunity of a life away from the gangs that are a real threat for young men in the area. They dedicated an advert to the issue, which focuses on the story of one of these farmers.

Not only is it great to see an organisation’s philanthropy take such a spotlight, but it’s been very intelligently orchestrated. The human angle, the focus on universally recognised issues – not just gangs but the vulnerability of younger people and their career prospects, which are certainly at play here in the UK: it very successfully reaches out to its audience and inspires empathy.

What we see in both of these examples are organisations not just handing over money to charities, but incorporating philanthropy into their core work and organisational missions.

This is where you can really begin to build a convincing story and reach a wide number of people with your charity work.
Businesses should be more conscious than ever of their greater social purpose and impact.

It’s not enough anymore to sign a cheque for a good cause in order to be seen to be doing good. It’s about working closely with the communities you operate in and making sure you’re doing no harm as our planet becomes ever more fragile.

It’s about thinking about the key skills and assets you have at your disposal that could be used to drive social action. It’s about going above and beyond, inspiring your customers, and others, to get involved in the causes you’re supporting and using your influence to spread the word about those in need.

If corporate philanthropy could be approached and communicated in this way then public awareness would shoot up and, inevitably, brand reputation and profit would follow soon afterwards – if those considerations are still what’s really important here.