Do people really care where the money comes from as long as it is being put toward a good cause?
By Michael Gutman
People argue that corporate social responsibility [CSR] is about how a company makes a profit rather than how it spends it. Then logically, would community outreach and philanthropy not fall under the purview of CSR?
I happen to disagree.
In fact, I have bet my entire career on proving the fallacy of this statement by starting a social enterprise that helps businesses spend their profits on community outreach.
What do I mean by community outreach? In most cases, it takes its form in philanthropy, volunteerism, in-kind donations and communications. My company, REACH The Future, helps businesses benefit from supporting sustainability outreach in the communities they operate in, increasing their brand integrity, awareness and sales all while helping people and the environment.
The bigger question is: why should community outreach be part of a CSR strategy?
The Anthropological View
Community outreach and communication are important tools for spreading “good” knowledge. The anthropological view states that if we can help make the world a better place by helping humans share and adopt ideas, behavior and technology, we should share them.
If a company is a model for sustainability, doesn’t it make sense that they should share their tactics so that others can learn from them?
To name a few, executives from Google, Clorox and Intel have shared their expertise in CSR with business schools like Stanford and Berkeley. If a company manufactures green technology that can change the world, doesn’t it make sense that communities who can’t afford it at least be introduced to it? If a company makes plenty of money and is made up of good people, doesn’t it make sense that they might want to donate some of to help make the world better?
In order to help spread the adoption of sustainable behaviors and technology, doesn’t it make sense that a company would want to communicate these efforts to their stakeholders and incorporate it into their CSR strategy? Unilever, Wal-Mart, UPS and General Mills flock to publications like CSRwire and Triple Pundit so they can share their progress in sustainability with their stakeholders.
The Business View
If a company wants to inspire its stakeholders, increase productivity, increase employee engagement, brand integrity and sales while reducing risk, doesn’t it make sense that this be part of their strategy? Office supplies company, Give Something Back, has built its business and differentiated itself in a crowded field with a strategy of giving back to the community. If a company improves its finances while helping the community and the environment through community outreach, doesn’t this pad the triple bottom line?
The Critic’s View
Doesn’t it make sense that a company who irresponsibly disposes of toxic waste and has unethical labor practices would want to counter this with positive PR? Sure, they would, but only if that company is either short sighted or actively changing their business to be more sustainable.
Let me explain.
Companies that invest in the community without first investing in their own business operations put themselves in a very vulnerable position in the eyes of their stakeholders. Integrity and brand value are at risk if the truth about their business operations is uncovered.
For instance, Wal-Mart has developed a Foundation that “concentrates on helping people understand how families and communities can live better by using fewer natural resources…” However, the company is often criticized for its business practices for selling “flimsy, landfill-bound products and building sprawling stores that can only be reached by car.”
Although community outreach might not be a viable strategy for a company that has unsustainable business practices that pollute and waste, they should be given the opportunity to invest in a more sustainable business model. The hope is that they become transparent about their faults and work toward a time when community outreach and communications becomes a viable strategy.
When I evaluate potential clients who could benefit from REACH The Future’s community outreach programs, knowing they have made efforts to green their business operations is a must. Companies that are not investing in a more sustainable business run the risk of a PR nightmare if they decide to engage in community outreach and communications. Even though the money they do invest in the community is ultimately a good thing, their deception puts the brand at risk and will come across as a marketing ploy.
The question then: do people really care where the money comes from as long as it is being put toward a good cause?
Feel free to continue this conversation by commenting below, or on Twitter & Facebook.
About the Author:
Michael Gutman is the Founder and CEO of REACH The Future, a San Francisco-based social enterprise that supplements businesses' CSR efforts with community and environmental stewardship. Gutman's vision is to create a large scale, united community engagement program funded by leading Bay Area businesses.
Before starting REACH The Future, he spent over 10 years marketing start-up companies. His love for nature, hopes for humanity and expertise in marketing and business is what drives his work forward. When Gutman is not building solar ovens, hosting green workshops or producing international films about sustainability, you may find him riding his bike around San Francisco, surfing the California coast or snowboarding in Lake Tahoe.