The pursuit of profit is the aim of any normal business, whatever the connotation of word means to you.
A capitalist viewpoint may be that profit provides opportunity for growth and for repaying your proverbial organ grinders.
But capitalism, in its raw form, has been held up to the light as the backbone of businesses is scrutinised by CSI’s within customer markets, future workforces and supply chains, all looking for the fingerprints of your social values, demonstrable ethics and inclusive work practices.
After over a decade of experience in helping corporates strategically invest in communities and wider society, I am still frustrated to see that Corporate Philanthropy is still being culturally accepted as real Corporate Social Responsibility.
But what is the difference between Corporate Philanthropy and Corporate Social Responsibility?:
- Corporate Philanthropy has a very narrow focus.
This typically relates to when a company undertakes social activities (normally through staff-led initiatives) that result in giving away money, time and/or resources to support a social or charitable need – charity bike rides, improving local parks, reading clubs for primary schools, pro-bono staff volunteer days etc fall into this category.
Whilst I agree that such activities are relevant, admirable and have value, they do not tend to be integrated with sustainable impacts measurements, but rather a focus on employee engagement, anecdotal stories, PR & brand awareness and ‘feel good’ shared experiences that are feed into the mouth of social media, and are positioned eloquently within End of Year CSR/Citizenship Reports.
- Corporate Social Responsibility activity has a wider focus.
This targets more strategic issues that affect the environment, consumers, human rights, supply chain, sustainability and transparency for the greater good of the world at large. Businesses that integrate social responsibility into their company vision and core activities, acknowledge that their business processes have an impact beyond the company and integrate CSR strategically, across all levels of the organisation.
In this way, you receive all the philanthropic benefits above, but social impact also underpins the strategic focus for the future growth of the business.
Social Impact becomes a strategic investment for the company, that meets both commercial and social needs, not just a ‘nice to do or to have’ expense.
This misunderstanding of this simple notion, has created the cultural norm within the business community, of patting each other on the back for a job well done and a disconnect between what has been earned through CSR activity and the impact that this really has, on the agreed beneficiaries of such activity.
To be fair, I do personally know a number of senior business leaders, who are trying to change this culture within their corporate boardrooms and who do genuinely ‘get it’, from a more long-term strategic investment point of view. But for many, the ‘outside world’ of social impact is misinterpreted as being just about social enterprises or charity work.
I have seen it all – based upon their own conditioning and life journey, many leaders find it difficult to face inadequacies in their knowledge and understanding, utilising authority and power to delegate such responsibility and in unfortunately, in some cases, not really giving a s**t.
Many still see social impact as an alien concept and simply don’t know how to shift from the historical way they have run their business to date. Actions such as the 2% CSR rule in India, & the EU CSR directive of companies with over 500 employees are just two evidence pieces, that are causing companies to think differently about their business.
Whether business leaders want to accept it or not, future growth lies in the ability to embrace a new paradigm of what I call, Executive Social Leadership (ESL), enabling them to integrate this positive disruption into the practical application of business strategy, in order to compete in a rapidly changing global ecosystem.
I believe that if key decision makers can understand what the financial ROI of their own social impact is, in relation to the bottom-line of their own business, alongside developing a more entrepreneurial organisational culture focused on social impact, then it will give them the confidence to articulate the business case for MORE investment into society, with their boards, shareholders, staff, suppliers, communities, funders and other stakeholders connected to their business!
- Calculates and converts your Social Impact into £UKmillions
- Calculates social impact as a percentage of your company’s overall net worth
- Can benchmark your company against local, national and international competitors
- Can translate data from over 1,000 other social impact measurement tools in financial terms
By focusing on the numbers only (there are more than enough social impact tools that measure everything else!), I have seen business leaders eyes light up, the passion in the heart grow and their love for humanity become rediscovered!
If you would like to learn more about the Social Earnings Ratio, feel free to learn more here or get in touch!
The more businesses understand what their social impact numbers mean, is the more that, I believe, society will receive the type of sustainable investment that can REALLY help our societies to prosper for the long-term, not just for one day.
I also look forward to the day when I no longer have to see staff come out in their socks and sandals, just so that they can feel all kum-ba-yah for the day too!
Till the next time,