Creating Social Value Blog / Corporate Social Relevance

Tips to Move CSR from Philanthropy to Business Strategy

As part of Emily and Cheryl’s Leading for Social Value course last spring, students were asked to write closing blogs with reflections from the seven weeks of the course. This post from Calliope Desenberg, MBA’18 is the fourth in this series of posts we’ll be sharing periodically.

Moving from a philanthropy focused corporate social responsibility (CSR) model to one that lives within the central business strategy is no small feat. But today, many companies are feeling pressure to do just that. More and more consumers expect businesses to be contributing to social, environmental, economic responsibility, and sustainability (SEERS) through their business operations as well as (or instead of) through corporate giving. While the amount of corporate giving has increased significantly from $3.67 billion in 1982 to $21.1 billion in 2015, it still only makes up 5% of all private charitable donations.[1] At the same time, corporate charitable giving as a percent of companies’ pre-tax earnings (EBIT) has decreased from 2.1% at the apex in 1986 to 0.86% in 2015.[2] Customers are demanding a shift from this CSR model, where companies on average give less than 1% of their profit to charity, to one where companies make permanent, positive changes to the way they do business.

So what are some tips for companies attempting to change the focus of their CSR model to a business strategy? Here are the top suggestions synthesized from business leaders and CSR experts in Babson’s “Leading for Social Value” course:

1) Do a situation assessment and strategy plan.

Before a company can start thinking about making an impact through their business operations, they must first take a close look at their current practices. Businesses should focus opportunities for improvement both in doing less harm and doing more good. After doing a full assessment of the company’s current practices, strategic plans should lay out what immediate, mid and long-term SEERS goals they are going to work towards. One big barrier to many companies is the fear of being imperfect as they start taking action. However, customers are not expecting perfection, , just transparency of sincere effort towards realistic goals. If changing a process across the company would be prohibitive at the start, then leaders can choose to implement a change across one line with the plan of transitioning all their products to this new process within a longer, but specific, time-frame.

2) Get executive buy-in.

A full assessment and plan are important, but having executive buy-in is essential to making that plan a reality. Unless the company has had SEERS woven into the company mission and practices from the start, it is unlikely that all the executives will see the value in implementing this type of change immediately. CEOs can often be the first people to get on board because they are the ones that have to represent the company as a whole and deal with public criticism. Creating and instituting a strategic CSR plan allows them to be on the offense rather than on defense. To address other executives, it is important to be able to understand their role and goals in the company. To get the Chief Financial Officer on board, you will want to explain things in their terms and talk about how your proposed actions will affect revenue, earnings per share, and long-term shareholder value. To get the Chief Human Resources Officer engaged you will need to discuss the impact on talent recruitment and employee retention. Effectively getting executive buy-in will require you to be a boundary spanner, able to understand and connect each executive’s goals to the CSR strategy.

3) Move CSR out of the legal/marketing silo.

In many companies, the CSR staff are placed within either the legal or marketing departments. If they are within the legal department, it is likely because the company views CSR as an extension of compliance; within the marketing department, they are likely viewed as a means of improving brand and reputation. If businesses want CSR to truly be integrated into the overall strategy, then they need to make sure staff within all functions see themselves as connected to it. One way to make sure this happens is to have CSR focused staff within every part of the company from procurement to R&D to accounting. If these staff understand the connection between their roles and the larger CSR goals, then it is much more likely that their everyday decisions will take the overarching goals into account.

Ultimately, there is no one-size-fits-all guide to smoothly transitioning from a philanthropy focused to a business strategy focused CSR model. This is messy, difficult work, but the companies who figure it out will be tomorrow’s leaders.

[1] Stern, Ken. “Why Don’t Corporations Give to Charity?” Slate Magazine., 08 Aug. 2013. Web. 13 Mar. 2017.

[2] CECP, in association with The Conference Board. Giving in Numbers: 2016 Edition. Web. 13 Mar. 2017.