Why Corporate Giving Should Be Part of Your Sustainability Strategy

Monday, February 27, 2012 is International Corporate Philanthropy Day.  This international advocacy day is led by the Committee Encouraging Corporate Philanthropy and brings together business and community in partnership for mutual success.  The event highlights the critical role that the private sector plays in solving societal problems.

We can probably all agree that in principle, corporate philanthropy is a wonderful idea: corporations with wealth and resources are perfectly positioned to share those resources with needy organizations, individuals, and communities.  However, besides being a kind and generous thing to do, corporate philanthropy is an important part of developing and executing your Corporate Social Responsibility (CSR) strategy.

Sustainability can be described as a three-legged stool.  Economic sustainability, environmental sustainability, and human sustainability are equally important and deserving of attention as part of a sustainability strategy.  Yet, too often, we may focus our efforts on environmental sustainability or the impact to our bottom line, ignoring the critical human leg.

Social sustainability impacts all stakeholders in a company’s success, from its customers and employees to the local community where the company does business.  Increasingly, there is a demand for companies to involve these stakeholders in sustainability measurement and reporting.  Consider, for example, the Global Reporting Initiative (GRI) framework, which places considerable emphasis on stakeholder inclusion as a part of the sustainability reporting process.

There is also increased demand from consumers for products that are grown, harvested, manufactured, and shipped in a socially responsible fashion.  The growing popularity of fair trade products speaks to this interest among the public for consumable goods that minimally impact (and ideally enhance) human welfare.

One of the driving factors in social sustainability is a concept known as environmental justice, which is the idea that all people deserve to be treated equitably where the environment is concerned.  The movement arose as a means to redress the unfair environmental and economic burdens that some nations and communities must bear.  People living in poverty, in urban centers, and in economically depressed areas are often faced with fewer choices regarding their access to clean water, clean air, nutritious food, and safe products, work, and living conditions.  Due to a multitude of factors including lack of education, racism, and poor political power, these communities often become grounds for environmentally hazardous behaviors such as toxic waste disposal, energy production, and urban infrastructure development.

Companies are also under close scrutiny for the way in which they treat their employees and the communities from which those employees are obtained.  Hiring practices, benefit and compensation practices, governance and promotion practices, training, safe work practices, child and compulsory labor, the right to free association and collective bargaining, anti-corruption, and philanthropic financial support of local communities are some of the areas that are commonly addressed in corporate CSR reports.  Special consideration is given to practices that include marginalized groups such as women.

Many of us in the U.S. may take these human rights for granted due to our progressive employment laws, but not knowing whether or not your suppliers outside the U.S. practice socially responsible business can be a liability.  Your CSR strategy may require your global suppliers to comply with international best practices regarding human rights in order to minimize these liabilities.

Philanthropy can round out your socially responsible business practices by giving you and your employees a way to give back to those in need, whether by giving service, financial, or infrastructure support.  Many corporations recognize both the economic and social value in philanthropy and give generously to non-profit agencies across the world.  By doing so, these companies also position themselves more favorably with customers, investors, and other stakeholders.

International Corporate Philanthropy Day provides you with an opportunity to consider how you are using philanthropy in your sustainability strategy and to make strides forward into this important arena.  Here are a few ways you can begin to implement philanthropy, if you haven’t already:

Planned Giving
Many companies develop budgets to allow them to actively give to agencies and causes that match their corporate values.  Some companies involve their employees by “matching” employee giving, thereby doubling the good that can be done.

If you don’t currently give, you may choose to set aside a specified planned amount this year that you will give, and decide on the agency that will be the recipient of your award.  These contributions are tax-deductible, which provides you with an additional incentive to give.

Material Gifts
Some companies choose to engage philanthropy through the gift of material goods and services rather than cash.  These gifts may include new goods and services or hand-me-downs, such as company computers, furniture, and equipment that can be donated to schools or other needy agencies.  Consider how your goods or services may be of benefit to your community and donate accordingly.

Partnerships
Some companies foray into partnering with community agencies and groups in order to provide sponsorship in the form of media attention, financial support, or volunteer hours.  These partnerships can be valuable to the receiving agency because they can rely on the support of their partners, particularly during fund drives or high need times.

Service Projects
For some agencies, the gift of time may be as important, or more important, than financial support.  Developing service projects that engage employees as a group, or providing the opportunity for employees to do service independently during working hours, is mutually beneficial to all parties involved.  Research demonstrates that employees who are engaged in CSR efforts increase their engagement with their employer, and when employees are given the opportunity to volunteer as a part of their CSR work, that feeling of engagement increases even further.  Consider developing a “Volunteer Day” annually or providing your employees with paid time off to do service each month.

Community & International Development
A potentially critical form of philanthropy in action is the development of the community in which you do business.  If you do not continue your business operations in a specific region, such as when a project is completed, it can be devastating to withdraw your business—and hence financial support-- from a community.

Developing an understanding of the country and community in which you do business and the needs of that community is an important first step in ensuring the survival and success of that community.  Providing opportunities for career development, education, microfinance, health care, environmental justice, and more in the communities where you operate is sound business practice for sustainability—and the right thing to do.

If socially responsible business practices aren’t yet a part of your sustainability strategy, you may want to take the opportunity this International Corporate Philanthropy Day to begin considering how to develop this important third leg of your sustainability stool.

At Renewable Choice, we can help provide you with a roadmap for implementing socially responsible practices within your company and your supply chain.  Please contact us if we can be of assistance! And please enjoy the pictures of our recent group service project at the Boulder Shelter for the Homeless.

Amy Haddon is Director of Business Operations for Renewable Choice. Follow Amy on Twitter @RenewableAmy.