In recent years, there’s been a clear shift in how companies think about and execute corporate social responsibility (CSR), also known as corporate social impact. Gone are the days of CEO passion projects buried in adjacent foundations and disconnected from key corporate goals. Today, top-performing companies and organizations are taking a highly strategic, operational approach to their social impact work, using software, AI, and data to identify needs and assess results.
Forward-looking organizations like the NFL, Accenture, Edward Jones, Guardian, CAQ, HCA Healthcare, and others are creating social impact programs with high visibility in the C-suite that are aligned to key business metrics such as customer acquisition and retention, employee recruiting and retention, brand building, and regulatory requirements.
These companies know that far from being “charity” or a virtuous side hustle, corporate social impact initiatives have become a business imperative.
Those with an outdated understanding of how social impact initiatives can meet core business goals are wasting an opportunity, and the cost of doing so is likely to rise as younger consumers become a larger percentage of buyers and decision-makers in the years ahead.
Purpose-driven businesses achieve better results
A company’s purpose is the reason for existing that goes beyond making a profit. Yet, companies with a strong sense of purpose perform better across several important business metrics.
For instance, consumers are four to six times more likely to buy from, trust, champion, and defend companies with a strong purpose. Purpose-driven companies witness higher market share gains and grow on average three times faster than their competitors while achieving higher employee retention and customer satisfaction.
These trends are poised to accelerate in the coming years, as Millennials and Gen Z quickly become the largest spending force and the majority of the US workforce. Consider that after learning a brand supports a social cause or is socially responsible, 85 percent of Gen-Z consumers are likely to trust it, 84 percent are likely to buy its products, and 82% are likely to recommend that brand to their friends and family. Or that 64 percent of Millennials won’t take a job if their employer doesn’t have a strong CSR policy, and 83 percent would be more loyal to a company that helps them contribute to social and environmental issues. And almost eight in every 10 Gen Z workers say it’s important for them to work for organizations whose values align with theirs, making purpose the number-one driver in career decisions.
Companies are getting the message.
Increasingly, industries such as the financial sector are coming together to discuss and strategize how to use CSR to rebuild trust and transparency, meet regulatory requirements, foster more wealth-building opportunities, and, yes, increase profits.
Companies that continue to ignore CSR initiatives are simply missing a major opportunity to meet core business goals.
Getting started
If your company’s CSR programs are misaligned with core business metrics, here’s how to ensure your efforts are measurably more impactful both internally and externally for the causes you’re supporting.
First, understand your company’s core goals as they relate to brand, reputation, regulatory requirements, employee engagement, and recruiting top talent. Think about what values you want to communicate to customers and the broader public and how they connect to the products and services you sell. Understand what issues are authentic to the business yet are focused enough to make an impact. Determine which of these issues are of interest and could resonate with various stakeholders such as employees, customers, regulators, and your C-suite.
Then, look at peer companies in your industry and determine if there are opportunities to collaborate. Many companies within the same industry have partnered to undertake assessments of what the actual needs are on the ground in the communities where they operate. These assessments consider the opinions and voices of local charitable partners that can best articulate the community’s true needs. By undertaking this type of assessment up front, companies can ensure more meaningful impact, with programs that actually “move the needle” in their communities. Ensure that whatever program is decided upon aligns with the broader corporate strategy identified at the outset.
Next, understand where programs will fit within the company. Will you have a signature social impact program addressing a specific community need, such as education or mental health? Will you offer a platform for employees to choose and contribute to social impact initiatives? Even with the best of intentions, many companies find that their social impact initiatives are sprawled throughout an organization, making it difficult to understand who is responsible for what and the overall impact of a company’s efforts. It’s best to think of social impact initiatives as one portfolio, with visibility and preferably even management in the C-suite. By centralizing and elevating social impact programs, companies can provide better results and more visibility for those successes.
Lastly, be purposeful about exactly what’s being measured and reported. Often, it’s those very metrics that drive what gets done. Be sure that any solution you select efficiently tracks the impact your investment has against the core business metrics you defined at the outset. Technology can help here and today’s advances in AI can simplify or even automate measurement and reports. It’s why we created Blackbaud Impact Edge, our AI-powered social-impact-reporting and storytelling solution for teams of all sizes.
A rare business opportunity
The next phase of corporate social responsibility is here. Companies of all types have an incredible opportunity to meet core business objectives through purposeful corporate social impact programs.
Companies across diverse industries have found that by taking a highly strategic, operational approach to corporate social impact, they can increase profits, meet regulatory requirements, reinforce community trust, nurture new customers, and bolster their brand, all at the same time. Today, these forward-looking organizations are proving that focusing on community needs can also help their bottom line and much more.
The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.
