Philosophy of Community Engagement
Earlier in December I attended the 2nd annual Engage Indiana event. It was exciting to see the growth in attendance from last year (over 600 businesses attended!), and I thought Clay Robbins, President and CEO of the Lilly Endowment added excellent perspective on ways corporate partners should leverage the expertise and knowledge of the non-profit sector to build the communities we seek.
Yet one comment Clay made stuck out: a shared concern between the Endowment and the School of Philanthropy on Strategic Corporate Philanthropy as a risk that might leave certain communities unserved.
I've wrestled with this question myself over the years as I think about my work as a CSR consultant: at what point do we run the risk of not serving the underserved because they are not a target audience or potential business opportunity?
Ultimately (as evidenced by the fact I'm still working in this space) I think the risk is worth taking with caution and foresight. Here are 3 reasons why:
1) We've barely scratched the surface of corporate giving:
GivingUSA lists corporate contributions for 2016 at $18.22 Billion. That seems like lot of money until you realize that it's actually only .2% of annual corporate profits. You read that right: corporate contributions currently equal two tenths of a percent of the profits they are creating from the communities that support them. Imagine if we made a concerted effort to move the needle on this percentage- even moving to .3% of profitability would increase available funding by $9.1 B. every. year.
Wen we are able to consistently demonstrate to businesses that engaging in the community is an effective long-term business investment, we are establishing the benefit and the impetus for our businesses to engage fully with the nonprofit community. Still I think the risk is mitigated. If we were able to increase corporate giving to a full 1 % of profits, we'd be looking at an additional $62 B annually across the US. This is a more exciting number, but would still be only 25% of individual giving.
2) All ships rise together collectively:
When businesses are able to strategically direct their giving to the causes and areas of focus that they most directly impact, there's an exponential value in the speed of implementation and number of resources available, both in the form of internal and external efforts. Keurig is a great example of a business that recognized the social issue of waste and began to create scalable solutions to improve the sustainability of our world, and their business.
That's the beauty and the power of the SDGs: focusing on the areas that are most impacted by and impactful for your business allow us to collectively move farther, faster, while allowing others to focus in the areas, tools, and challenges that they're best suited to address.
3) We get to build this as a virtuous cycle:
I often remind struggling business owners that they're adding value to the community even if they're not able to do anything more than make payroll. The simple fact that businesses are profitable adds value to the community: we provide livelihoods, quality of life and every once in a while a sense of purpose and meaning. Asking a business to engage in activities that do not add long-term value to the bottom line is purely altruistic and while I wouldn't say it's bad in theory, it's not in alignment with the goals or intentions of business. Even Milton Friedman and I would agree on that (and that's really saying something.)
As thought leaders at the forefront of this groundswell, we have the opportunity to establish the processes and expectations from the business community. This means changing our language from 'strategic corporate philanthropy' to 'strategic community engagement,' expecting that effective social engagement will create measurable business value and understanding that mutually beneficial outcomes create additional incentive for the organization to continue engaging.
Community engagement is different than philanthropy. The benevolent corporate giving cycle allows us to release previously underutilized assets to our nonprofit partners. This is different than pure philanthropy and must be treated differently. (It's also worth mentioning that based on my experiences, businesses that desire purely altruistic corporate philanthropy will continue to participate in the manner they already have as a part of the organizational ethos, and will continue to pursue the missions and organizations they already have.
Longest blog post ever, Dora. Get to the point.
I understand, recognize and appreciate that there are many people concerned about the negative impacts on philanthropy that could come from businesses considering social purposes for their end games. It's hard to question our collective cynicism after watching many corporations rape and pillage communities in the interest of profitability. It's hard to trust that there's a way to engage in a way that benefits society and the greater good.
But there is. There has to be. What choice do we have if we're going to pull off our big ideas, make change and fix our biggest challenges instead of leaving them to our children? Individual contributions aren't outpacing GDP and government support for our nonprofit communities continues to wane.
Businesses engagement is a solution. The potential benefits far outweigh the risk, and we as consumers and leaders are in the position to define how it should work. We're the grownups now - let's build our businesses right this time around.