Enlightened businesses have rediscovered the 19th Century Quaker belief that being socially responsible makes good business sense.
Former Lord Mayor of the City of London Nick Anstee is one of many extolling the benefits of corporate giving: “The mark of a successful city is not only its economic prosperity, but also its social contribution; this should be a fundamental part of the calculation of a city’s success. Although the climate for business is tough, giving staff time to get involved in corporate community involvement is clearly a good investment – it pays dividends for the community, for staff and organisations alike.”
Companies are increasingly recognising the value of strategically aligning their corporate community programmes with their business goals. Large companies are focusing more on in-kind donations, which fit their own business objectives, according to a report by Deloitte, the business advisory firm. The report says factors being taken into account include the need to improve employee retention, attracting new markets and enhancing reputation.
Nick Wright, of UBS, knows first-hand the benefits such schemes deliver to a company and also to employees. “CSR is a key factor in recruitment and retention. For today’s graduates it can be the deal breaker when considering companies offering roughly the same packages, as the banking sector does.”
UBS has also identified that volunteering may deliver tangible career benefits, says Wright. By comparing the career performance of 250 of its volunteers against non-volunteers “we found that volunteers significantly out-performed against non-volunteers. Though we can’t say there was a causal link it is likely that those who volunteered had developed the soft skills such as teambuilding, listening, leadership and being more collaborative, that made them better management material ” he explains.
Perhaps more important than employees’ desires or the realisation that companies benefit from philanthropy, is the demand from customers for corporates to act in the interest of society, particularly in the aftermath of the banking crisis. Former chairman of Lloyds Bank, Victor Blank, wrote in a Telegraph article calling for a new philanthropy for the 21st Century: “Businesses have a strong incentive to get involved, not just because of altruism or to rehabilitate themselves after the crunch, but because customers are demanding responsible corporate citizenship.
“Programmes of employee engagement, where companies make time available for their employees, combined with enhanced philanthropic giving, can make massive improvements to society and, ultimately, benefit the bottom line also. As companies look to their future in a post-credit crunch era, perhaps it is time to rewrite the old proverb and adopt the motto that Charity Begins at Work,” says Blank.
Sir Ronald Cohen, the father of private equity investment and more recently social investment in the UK and one of the UK’s most politically-connected financiers, goes further. He says ‘giving back’ to society is more than a business benefit; rather it is a crucial component of capitalism. He makes the point in the Give and Let Give report, that took a forensic look at how the financial services industry could become more philanthropic:
“ … many City people do not today realise early enough the need to put something back if the system is to operate smoothly”.
Cohen’s comments at the time were controversial, but turned out to be prophetic. He feared that a widening gap between rich and poor, especially in the same neighbourhoods, would lead to social tension: “People haven’t quite understood that the system that enables entrepreneurial societies to thrive leads to social consequences that the market does not take care of. It’s great to talk of the economy’s growth, but you do have to worry about what’s happening at the extremes. The divergence of the rich and the poor creates an unstable situation. And I am interested in avoiding a situation where people get so far left behind that they are desperate, they don’t mind overturning the applecart.”
Last summer, that applecart was over-turned as anti-capitalist demonstrators took to the streets and looted many city-centre shops while others took up residence outside St Paul’s. It has led businesses to accept they have an important role to play in creating a more equitable society - and one from which everybody profits.