A Conversation on Corporate Social Responsibility - Part 2

We pick up our conversation with Linda Lattimore by shifting our discussion to the nexus of the nonprofit sector and the sectors involved in the CSR movement.

ZS: For many in the nonprofit sector, the concept of CSR is intriguing, if not a bit daunting. Is there a way to explain CSR so that nonprofit professionals can identify with it?

I like to use the terms “outward and inward” to answer this question.

For the for-profit world, the focus is shifting outward. The for-profit world is waking up to the fact that nonprofits, previously anointed the problem solvers for most of the social, political, or environmental problems facing our world, simply can’t maintain the pace as these problems continue to grow.

Ultimately, businesses that practice CSR (and they all should) must ‘walk the talk’ of conscious leadership, focused on the best interests of all their stakeholders, internal and external, and our environment even as they concentrate on a strong return to their investors. The tide is turning and the marketplace is demanding sustainability measures, not quick-hit profit driven initiatives.

For nonprofits, the shift should be inward. As consumers and donors become more conscious and gain immediate access to information, nonprofits are facing more scrutiny in how they fulfill their missions, and how funds that have been given to them by people connected to the cause are used.

These hard-earned funds come from individuals and companies who expect them to be used wisely by the organizations they choose for the causes they align with. Efficiency is key, and accountability paramount; this is coupled with transparency in measurement and reporting practices.

ZS: What can nonprofit professionals learn from for-profit professionals that use CSR?

In fact, the nonprofit and for-profit sectors can learn much from each other. The programs and learning curve of each are similar, as both strive for internal growth and efficiency.  The for-profits have the added job of learning about ways to give back to their communities in addition to making a profit.  

Nonprofits should be focused on better use of their funds and resources, including human capital and marketing – because in reality, nonprofit organizations should aspire to have the same best business practices as successful (and sustainable) for-profit entities.

ZS: It sounds like there are some good opportunities to collaborate. How can these sectors find common ground?

To some extent, sectors are becoming more intertwined. We are seeing that the for-profit sector is stepping up to help resolve social issues and they want to make sure that everyone in their value chain is on board.  

The government sector, thanks to advocacy from organizations such as B Lab, is beginning to provide new entities to choose from such as benefit corporations (now in 33 states), low profit limited liability company (Lc3s), and other special purpose entities which allow for companies to have a social mission even as they make a profit, without fear of repercussion from shareholders. Further, soft law (self-imposed risk management measures) is beginning to take shape in hard law regulations and reporting requirements.  

The citizen sector has found its voice, employees are demanding corporate culture changes, consumers are demanding transparency, impact investors have shown up eager to invest in conscious well-run companies, and the general population is beginning to understand the need to collaborate for our future and the future of our children. Public-private partnerships (P3) between all sectors are becoming a daily occurrence.

Providing a forum for knowledge exchange between these developing and established sectors would be the ideal next step.

ZS: With these new entities and entrants into the social space, how do you see nonprofits being sustainable?

There are a number of creative avenues nonprofits can take, so I will touch on the areas that I am familiar with.  

We have begun to see in recent years a dual entity structure in which a nonprofit spins off certain operations to a for-profit entity. One entity tries to maximize profits, the other is focused on accomplishing a social mission.  

A caveat: Because this is a new hybrid structure, it is not always easy to find staff who understand the dichotomy and diverse approach to running each entity, and conflicts can arise. Remember that in most for-profit companies, employees are paid based on generating revenue and keeping customers happy. In most nonprofits, success is based on impact and solving the issues of a unique population of beneficiaries. It can be a challenging balance.

Additionally, care must be taken, as there could be unforeseen tax liabilities, or worse, the potential loss of tax-exempt status if the activities step out of the bounds of the primary charitable purpose or revenues exceed a certain threshold.

ZS: Do you have any concerns with nonprofits taking on this model?

A creative and sustainable business model does not concern me. What does concern me is the saturation of nonprofits in an area or mission – thereby watering down donations. I worry that a number of small nonprofits were created as “monuments” or legacies by their founders and that competition or alignment partners were not well-researched prior to their formation.  

As such, one solution to remain sustainable may be to merge efforts with aligned nonprofits in the same sector as there is strength in numbers and combined talents. It also gets back to having a well-run organization that can weather a financial storm in the form of the loss of support. Much of this can be addressed in a well thought out sustainability strategy.

ZS: You raise a very timely concern about sustainability for nonprofits. In the same vein, where do you see the biggest challenges to CSR? 

For me, the biggest challenge is holding the vision of inclusivity, that all of us deserve to live in a better world and that means our offices, homes, and communities. We must keep reminding everyone that we can’t be myopic anymore, that we have to make decisions based on the best interest of the collective.  

When everyone is raised up, we all benefit. For the most part, it has been proven that companies that have strong social responsibility programs do better on the Fortune 500 than the ones that don’t. So, it is actually possible to do well and do good at the same time. The old way of doing business has not proved to be the best way.

ZS: What is a golden piece of advice to those wanting to embrace CSR as a career choice, change, or passion?

You must be a changemaker and tenacious, a vanguard on the front lines willing to advocate for a better way.  

Linda Lattimore

Social responsibility programs rely on a shift in the way we have always done business.  The for-profits are beginning to open their eyes to an outside world in need and the nonprofits are beginning to take a strong look at their internal operations to make sure that they have the strong foundational pillars that they need to serve their purpose for the long term.  

That being said, you need to be strategic and wise, able to gain the trust of those you need to support your efforts. In this day and age, that means that you need to be well versed in all facets of a dynamic social responsibility program. This includes clarity about your responsibility to both internal and external stakeholders, having a strong employer (or personal) brand for optimum recruiting and retention of this next generation, and strong compliance programs with measurement and reporting transparency. 

This is akin to the flight attendant telling us to put our mask on first before we help others. After all, if our organizations aren’t healthy with a clear and focused mission, how can we truly help the populations or causes that need serving? For those in the nonprofit world and world of social enterprise, that means that your organization needs to be well respected as a responsible steward of funds and run like a well-oiled machine. It needs to be competitive and best in class.  

ZS: I’d like to conclude our conversation by touching a bit on your background, current activities, and ways our readership can get involved with you and your work.

What brought you to the CSR movement? What did you do prior? Has CSR always been part of your education/professional aspirations?

I grew up in Peru and Mexico and from the time I was a young girl I witnessed inequities in poor nations and wished I could help. My family was always very involved in volunteer work so I came by this desire to give back naturally.

I have been a corporate attorney for many years and General Counsel to a handful of multinationals as well.

Additionally, I believe that the face of business, both for-profit and nonprofit, as we know it today, is changing. No longer can any organization fail to have these measures in place if they hope to compete effectively for either customers or donor dollars. These challenges have brought me to my present role and drive the work I do.

ZS: Congratulations on Solutionaries: You are the Answer. Can you tell me about the book, and who you see it helping and inspiring the most?

Many people want solutions for the issues facing the world today. Yet most get stuck trying to understand how they can make things better or where to focus their efforts. These include Baby Boomers wanting to leave a legacy, Millennials unsure where and how their talents can be most impactful, women re-entering the workforce uncertain about their skills and talents, and others who want some guidance on how to leave a positive mark through their work.

Solutionaries is a workbook that takes them through a process whereby they: 

• Discover the talents, gifts, and tools that make them uniquely qualified to lead \
• Present their distinct value proposition to the world with intention 
• Identify compelling issues that drive them to serve and make a difference 
• Find and join their tribe of likeminded “Solutionaries” and changemakers 

• Create an action plan for a life that meets both their financial and emotional needs

ZS: You have a strong commitment to emerging female professionals and leaders. What guidance do you have for them to be long-term contributors to social service?

Solutionaries

There has never been a better time for women to step into leadership roles, as the qualities they bring to the table are needed and finally becoming appreciated.  Historically, women have brought families and groups to the table to talk, we have been able to multitask and see a big picture where all the stakeholders could leave winning, and we have been focused on the health and welfare of our families and their families. These are all qualities needed to advance this sustainability movement.

But, just as nonprofits need to step in and take a look at their business acumen, so do the women who want to make a concentrated impact to the cause. They need to have a full grasp of the workings of the business or organization serving the populations that need the help. They need to educate and prepare themselves to lead. In many instances, they need to find their voice because it is needed!

ZS: Where can we learn more about your work, speaking engagements, and educational opportunities?

My website, https://www.lindalattimore.com/, has information about me and the programs I offer. I also have a newsletter that goes out every couple of weeks with articles and upcoming workshops for anyone that is interested in signing up. As a start, you might want to benchmark where your organization stands in this movement by taking a free assessment that I offer at https://www.solutionariesacademy.com/p/nonprofit-sustainability-assessment.

ZS: Thank you for your insight Linda – it is invaluable during this rapidly evolving time for the nonprofit sector.  We hope to engage you again in the future, and we look forward to your next publication. 

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If you’d like to know more about Linda’s work and how it can relate to your nonprofit leadership goals, visit lindalattimore.com or contact her directly at Linda@lindalattimore.com. Stay tuned!