The Changing Face of Corporate Social Responsibility

Is corporate social responsibility dead? This is the question that frequently popped into my mind in the wake of the global financial crisis, when I started noticing companies stating on their websites that they could no longer afford to keep giving, that their giving programs were on hold, or that they were scaling back. Fast forward to 2019, on the heels of several years of solid economic growth. Where do we stand when it comes to corporate social responsibility (CSR)? Based on my personal experience as a researcher in GrantStation’s international database, I would argue that CSR is still very much alive, yet evolving in nature. Let’s have a look at some trends.  

Corporate Social Responsibility Is Gaining Traction
Over fifty years ago, the economist Milton Friedman famously said, “There is one and only one social responsibility of business—to use its resources and engage in activities designed to improve its profits…” We’ve come a long way since then, as consumers are demanding more from the private sector. Even the financial industry has acknowledged the importance of CSR. Last year, Larry Fink, the Chairman and CEO of BlackRock, the largest investment company in the world, stated in his annual letter to CEOs, “To prosper over time, every company must not only deliver financial performance but also show how it makes a positive contribution to society.”

How are companies responding to these cultural shifts? According to a 2019 report put out by Blackbaud and YourCause, Industry Review: Employee Engagement and Corporate Social Responsibility, the percentage of Fortune 500 companies with CSR programs jumped from 20% in 2011 to more than 80% in 2015, and continues to grow. The report cites demand from both customers and employees as two key reasons for this growth, along with the fact that companies with CSR programs also boost sales and customer satisfaction.

GrantStation’s research also lends credence to the theory that CSR is still alive and kicking. According to The 2019 State of Grantseeking Report, 60% of organizations that received funding from non-government sources reported receiving a grant from a corporate funder, and 32% said they received a corporate gift of products and services. Small and medium-sized organizations tended to rely more heavily on corporate grants, with 16% and 12% reporting corporate grantmakers as their largest source of total funding.

Companies Are Cultivating Their Social Image
When researching corporate grantmakers, one thing I’ve noticed on their websites is an increasing focus on verbalizing company ideals. Even those corporations that do not give grants tend to use terms such as “community involvement,” “sustainability,” and “our commitments” to emphasize their dedication to local, environmental, and sustainability issues.

Moving beyond language, headlines abound about companies that have taken a stand on social issues. Take, for instance, Adidas’s efforts to combat ocean plastic pollution, Nike’s decision to hire Colin Kaepernick to represent their “Just Do It” ad campaign, or Starbucks shutting down all of its shops for a day to conduct internal racial-bias training.

What’s behind this recent trend? One explanation is that consumers are increasingly concerned with whether a company’s values align with their own. According to a recent Accenture Strategy survey of global consumers, 62% expect companies to support issues that are important to them, and when they don’t do so, 42% of customers “walk away from the brand in frustration.”

Such misalignment of values can also lead to negative press. For example, Volkswagen suffered a serious blow to its reputation after revelations that it had rigged its vehicles to cheat on emissions tests. Chick-Fil-A also came under intense scrutiny for donating to organizations opposing same-sex marriage, which resulted in calls to boycott the company.

Concerns about a company’s stock price may be another factor driving this trend. Sustainable investing, which takes into account environmental, social, and governance (ESG) factors related to a company’s performance, is becoming more popular among institutional investors, largely due to consumer demand. Even mainstream companies such as Vanguard are starting to offer socially conscious investment products based on ESG principles. According to the Global Sustainable Investment Review 2018, which analyzed data from the United States, Canada, Europe, Japan, and Australia and New Zealand, “Globally, sustainable investing assets in the five major markets stood at $30.7 trillion at the start of 2018, a 34 percent increase in two years.”

With more and more people choosing to put their money where their values are, it’s unsurprising that companies have responded to this demand by cultivating their corporate image.

Companies Are Emphasizing Employee Volunteerism and Giving
Many companies see CSR as a means to foster employee engagement, which has led to another trend that I’ve observed: an increasing focus on employee volunteerism and giving. Some companies have supplemented or even replaced their corporate giving programs by providing assistance to organizations in the form of employee volunteer hours. According to the 2019 Industry Review report, employees at companies with over 100,000 employees reported volunteering for an average of 20 hours, up 43% from the previous report.

Still other companies have put the power of the purse in the hands of employees. This may take the form of matching an employee’s charitable contributions, rewarding employee volunteerism with a donation to their chosen organization, or even offering employees gift-like cards that they can use to donate to charity. The 2019 Industry Review report notes that, among full-time employees, the average annual donation per donor was $724, with the company providing an average match of $690.

Companies Are Embracing Strategic Partnerships
In the past, it seemed that corporate grantmakers would fund everything and the kitchen sink, accepting applications for a very broad range of causes. Perhaps in a move to focus their giving, it appears that many corporate funders are now engaging in long-term strategic partnerships with selected organizations that align with the company’s values. Often, organizations may approach the company to express their interest in partnering up.

For those organizations that are lucky enough to establish such a partnership, there are considerable benefits. As corporate partnership consultant Derry Deringer points out, “What sets these partnerships apart from other avenues is that a nonprofit can benefit from many sources of support from a single entity, for example: employee giving, executive level board placement, and straight cash gifts.” Another potential benefit is that these partnerships may translate to several years of ongoing support, thus providing organizations with a bit more financial stability.

How Can Organizations Use These Trends to Their Advantage?

If you are looking to get your foot in the corporate door, it’s a good idea to think beyond the realm of grants. Securing employee volunteer time is one way build support for your organization. Independent Sector’s tool, Value of Volunteer Time, will enable you to calculate the value of each volunteer hour for your state, which can then help you to secure financial donations from other funders by demonstrating community support. GrantStation’s CEO, Cynthia Adams, also occasionally hosts a webinar called “Securing In-Kind Donations: And Making Them Work For You!” that teaches participants how to build a strong in-kind contributions program, the types of contributions they can secure, and how to use these donations to leverage grant funding.

Those seeking long-term support should research local companies whose values align with those of their organization and approach them about establishing a partnership. Elevate has put together a couple of useful articles on the topic, Where Do I Start With Corporate Partnerships? and Getting Inside the Mind of a Corporation.