Why Does CSR Matter? Why Does It Matter Now?
Over the past few years there has been a dramatic increase in the number of companies publicizing that they support a cause. The environment, children and youth, education, access to food and clean water…the list goes on. Admittedly, it’s great to see all of this support for causes but the question it can get you wondering is “Why?” Why are companies now starting to formalize Corporate Social Responsibility (CSR)? Why now?
There are a number of reasons that range from altruistic to more self-serving. The Harvard Kennedy School defines Corporate Social Responsibility as “how companies manage their economic, social and environmental impacts, as well as their relationships in all key spheres of influence.”
At VolunteerMatch, we’ve started to see CSR take the form of large-scale partnerships between a company and a cause. Take, for instance, Walmart’s recent Fighting Hunger Together campaign. The company is providing cash and in-kind donations to organizations that are fighting hunger, engaging its consumers in the campaign via a Facebook voting contest, engaging its employees in volunteering with hunger-related organizations and, going even deeper, providing resources and trainings to help build capacity at hunger-related organizations as well. This is a great example of a company taking a 360 approach to an issue.
So why is it important for a company to align themselves with a cause and to get all of its stakeholders – employees, consumers, suppliers, etc – involved and on the same page? As I mentioned earlier, there are always some altruistic motives, but there has to be some business benefit from both the nonprofit and corporate side of the table. With government and philanthropic dollars for nonprofits becoming difficult to access, it’s important for nonprofits to engage partnerships with companies that will provide them with not just financial support but also support in the form of volunteers, capacity building and publicity of their organization.
Cone Communication’s recent Nonprofit Marketing Trend Tracker research shows that American consumers are 50% more likely to donate, 49% more likely to participate in events and 41% more likely to volunteer for a nonprofit that is associated with a corporate partner.
From the corporate perspective, research has shown that engaging your employees and consumers in a cause truly affects your bottom line. A recent post in the Harvard Business Review’s blog cites research from the Corporate Leadership Council that showed an 87% decrease in turnover when employees are highly engaged at work which, logically, saves a company money on recruiting and training new employees. Also, findings from United HealthCare and VolunteerMatch’s Do Good Live Well study have shown that employees who are engaged in volunteering through their employer are healthier both mentally and physically, which leads to higher productivity and fewer sick days.
From a consumer perspective, Cone’s Cause Evolution Study in 2010 showed that consumers not only expect businesses to place equal value on societal interests as they do on business interests, but they actually make purchasing decisions based on a company’s support of a cause.
To sum it up, CSR is an important practice for companies and nonprofits. Building a relationship with a company improves nonprofits’ access to funds, volunteers and capacity building. Companies benefit externally from a more positive consumer view and internally from retaining happier, healthier, more engaged employees. CSR is a win for nonprofits, employees, consumers and the bottom-line.