Why Should Corporates Measure Their Financial Return on CSR?

The modern world of business dictates that the true sustainable value of your business, is based on a combination of its financial value and its social impact.

But we need to be honest with ourselves too…

CSR and Social Impact activity is often regarded as a brand awareness strategy. CSR budgets tend to come under Community Engagement, Citizenship or sometimes Staff Training or any other title that effectively means ‘anything that we do for the people’.

I get frustrated when all I see is corporate staff being given on average of 3-5 days a year to go out there and plant a tree, do a charity walk, paint a school fence, pick up rubbish in the local park, dress up in a character outfit of choice and engage in some fun activity or whatever idea can be created, to tick the ever-present community box.

Don’t get me wrong…these can also be very admirable activities that do create a positive impact and, in some cases, can make a REAL difference in the lives of others.

But I’m a realist. The stone cold reality is that one-off, one hit ‘do good activities’ are not sustainable, the difference made is subject to time, resources and capacity and the level of importance is often down to the passion of the people, who have had to suffer first or simple go out there and deliver!

So why does this happen?

The truth is that many senior executives find it difficult to tangible quantify the monetary value of social impact, in relation to the commercial and strategic growth aims of their business.

But we do see this changing – in our business, we measure the financial return of our clients investment into CSR through the use of our Social Earnings Metric Tool.

Our tool has been designed SPECIFICALLY to measure:

  • the increase on the net worth of the company based on their social impact.
  • benchmark companies against competitors social impact based on market, sector and locality.
  • the ROI on CSR spend.

We can also create a bespoke version of the tool that is tailored to the individual business, rather than a one size fit’s all approach.

We are increasingly excited by seeing the faces of senior executives light up, when they realise that they can now increase their social impact in a more measurable way, invest their funds in the right projects, and measure what this all means as a FINANCIAL value to the bottom-line of their business!

There are a number of reasons why measuring the business value of social impact is not easy generally, but here are two:

1)  Different businesses support different causes, for different reasons – there is no industry standard for the ‘right’ CSR activity, so the impact created will vary based on resource, need, strategic influence and the people involved.

2) The focus of CSR investment is often on creating external positive impact, not achieving internal strategic KPI’s – the whole notion of Corporate Social Responsibility is on supporting the diverse range of stakeholders affected by the practices of your business. There seems to be an unwritten moral code which states that a business should not link financial gain with CSR investment.

But, here two other simple reasons that are often overlooked:

  • ANY form of spend made by a business, should be measured in commercial terms.
  • ANY business that can measure the ROI level of its social impact, can increase the net worth of the business.

Whilst there are a myriad of social impact measurement tools out there, integrating social impact as a strategic tool for growth, is not a natural thing for most corporates and not readily demonstrated in hard financial metrics.

But therein lies the opportunity!

The more CSR is integrated as a measurable strategic activity, the more corporates will invest MORE into the development of communities and wider society as a whole!!

Wouldn’t that make this an even better world for us all?

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Why Is Fear The Key To Achieving Social Impact?

Having to integrate more socially driven outcomes as well as commercial growth, can create a real sense of fear for many leaders, within the modern-day world of business.

But this can also be an issue when you are primary aim is to create a social impact over profits – it can be just as difficult for leaders within the voluntary sector to handle fear, particularly when they face difficulty with not being able to access grant funding or the right level of corporate sponsorship / support, to enable them to achieve their social aims!The notion of fear is something that has a direct influence of the results that are achieved, regardless of a difference in priorities.

But what is FEAR? Why is it such a powerful emotion?

A quick story – back in 2011, I felt frustrated as to what was being accepted as CSR activity.I decided to create the region’s most impactful CSR Summit, bringing together the Top 100 CSR Professionals in the city. I wanted to get them together to share best practice on how the professional services sector in particular, was going to create sustainable social impact AND still be able to achieve commercial growth.

But I was fearful – how the hell could can I, a young black male who started out in a bed sit in one of the city’s most deprived wards, create such a forum and make it last in a city which by its own admission, can be a little cliquey and self-serving at times?

I looked at what I was both humbled and proud to have achieved so far – BYPY Winner 2010 for a business I was running using a second-hand laptop and mobile with a dodgy reception from the spare room, being a board director, speaking at events based on my journey too date….I came to the conclusion that fear was simply a state of mind; a thought process of the negative being real, without true evidence.

Fear became the driver because i knew that fear brought an intense understanding of my reality and required action, not procrastination.

I broke fear down into 4 key components, that i would like to share with you:

1) Conditioning: everything that you have been experienced, been taught, read, heard, seen, had instilled in you etc, all has an impact on what you believe – it is important to be aware of this, so that you are clear on what you don’t what vs what you do, and the real reason why you want it!

2) Self-Belief: how you are conditioned, has a bearing on how you see yourself and the limitations that you then place upon yourself. You must decide if you are willing to allow those limitations to be enough, to stop you from moving forward.

3) Embrace: if you accept yourself for who you are and what you can do now, it gives you clarity of what you need,  in order to receive what you want in the future.

4) Failure: there is no such thing as failure, you simply learn how NOT to do something. You must accept that you can’t do everything by yourself, but you can be the catalyst for what is to come!

My passion for wanting to help companies achieve social impact and commercial growth together, is now the basis for what we do at Cultiv8 Solutions and I really thank the universe for giving me that sense of fear in the first place!

Oh yes…as for the Birmingham CSR Summit

…in 2012, I teamed up with the cities CSR network Thrive and Aston Business School and founded the 1st Birmingham CSR Summit with 75 of the top 100.

At our 2nd Birmingham CSR Summit in 2013, we had 85.

On Friday June 6th this year, fingers crossed, we will finally have the 100!!