What a waste of business resource!

By Mike Tuffrey, co-founder, Corporate Citizenship —

Corporations spend billions every year on causes and in communities around the world. But a shocking new survey shows they actually know little about the difference it makes.

Nowadays everyone agrees that spending shareholder funds in scattergun philanthropy doesn’t make sense: it’s not good for people in need, nor for companies trying to justify and sustain a community investment (CCI) programme.

So Corporate Citizenship asked corporate responsibility and sustainability practitioners how they set objectives and whether they measure outcomes. Over 130 practitioners from around the world replied. A massive three quarters said they aspire to achieve long-term impact with their CCI. But fewer than half (44%) said they are actually measuring their impacts in the community. An even smaller proportion (28%) is trying to work out the benefits to the business.

That means we don’t know whether half of that investment is doing any good at all. At best, half the spend is less effective than it could be; at worst it’s being wasted. As the old cliché goes - if you can’t measure it, you can’t manage it. And without management, there’s no guarantee of good results. (That’s why hundreds of companies work with Corporate Citizenship through the LBG network to put in place the right systems to capture the resources invested, the activities undertaken and the change thereby achieved, using benchmarking to look at inputs, outputs and impacts.)

Just how much is at risk of being wasted, and what can we all do about it?

Members of LBG collectively invest $4 billion a year – equivalent to 1.1% of profits – mobilising 600,000 of their employees, supporting 260,000 organisations and ultimately benefiting more than 10 million people. We know because they measure it.

The Giving USA survey says corporate America donates $18 billion a year, though the true figure could be many times larger if the one per cent benchmark holds good across firms that don’t even report a contributions number.

In China the figure is put at $10 billion and in Japan around $5 billion, while the number for FTSE 00 companies is put at $3.5 billion.

Add that up and the amount of corporate resource at risk is staggering. As Senator Everett Dirksen probably didn’t say “A billion here, a billion there, pretty soon, you're talking real money”.

Our new report – Hard Outcomes or Hollow Promises? Realising the True Impact of Community Investment – sets out out ourI.M.P.A.C.T. approach to ensuring corporations do make the difference their programmes deserve:

• Intent is about setting clear objectives
• Map means understanding what’s currently going on
• Plan requires setting the right measurement framework
• Act involves carrying out the calculations
• Consider means analysing and interpreting the findings intelligently
• Tell is getting your message to the audiences that matter.

This is part of a broader research programme which Corporate Citizenship is undertaking in 2016, looking at the impacts of companies on society. One of the key insights to emerge from a recent research report entitled Impact for Change: Better Business in a Better World is that numbers don’t matter on their own - it’s what you do with the insight that really counts.

So here’s my message to companies. Let’s stop wasting money. Let’s start measuring our impacts. That’s surely the only way to truly make a difference.

Mike Tuffrey is co-founder of Corporate Citizenship, a global management consultancy specialising in responsible business and sustainability, and leads our work on LBG. A copy of the new report can be downloaded from http://corporate-citizenship.com/our-insights/hard-outcomes-hollow-promises/