With the release of the 2013 Cone Communications/Echo Global CSR Study, I am reminded, once again, that socially responsible corporations are not everyone’s ideal. Hard to imagine, but true.
Back in 2008, Jonathan Salem Baskin wrote a rather controversial piece in Advertising Age, in which he noted that there is “no morality inherent in corporate functions and asked, “…where in the game rules does it say that companies have to be ‘responsible’ for anything other than profits?” Whether Mr. Baskin was being serious or just playing devil’s advocate is unimportant; I am sure there were equal numbers of folks cheering him on as were throwing rotten vegetables at him. He believes that the only responsibility a company has to its consumers is to be transparent. Okay, I get that and want that, but the point is, he still missed the boat. From the very first nationally recognized instance of corporate social responsibility (CSR), the bottom line has been positively affected.
In 1983, in its iconic cause-related marketing (a term it coined) campaign, American Express promised to give a penny for every charge made to an AmEx card and every purchase of traveler’s check, as well as one dollar for every newly issued card or vacation deals worth $500 or more made at an AmEx travel store to the restoration of the Statue of Liberty. This deal was for three months only. AmEx spent $6 million in advertising, increased card activity by 28% and brought in $1.7 million during that time. Who says you can’t be socially responsible and bring in the profits?
Fast forward two decades, and Cone/Echo’s annual CSR report starts out with a statement that is probably making Mr. Baskin cringe: “the question is not whether companies will engage in corporate social responsibility, but how they will create real and meaningful impact.” Can’t say profits be damned, because we know profits won’t be damned! The 2013 report stated that only 6% of consumers think that the sole raison d’etre of corporations is to make money; the majority thinks these corporations should be good civic partners. There is, no surprise, a difference of opinion by consumers as to what issues they want corporations to address—economic development, human rights, the environment, etc.; however, little difference is reflected in the 91% of consumers worldwide who say that all things—price, quality, etc., being equal they’d likely switch to a brand affiliated with a “good cause.” It seems that a company with good CSR not only gets people to buy its products and services, it influences them in other ways: 78% of consumers said that “given the opportunity” they’d donate to a “charity supported by a company I trust” and 77% said that, again if opportunity presented itself, they would volunteer “for a cause that a company I trust supports.”
Corporate bottom lines increase; consumers (96%) have a more positive assessment of a corporation and become more loyal (93%); dollars for nonprofits increase; and, potentially, the number of volunteers increases. Sounds like a win-win to me.
But as the Cone/Echo report makes clear, consumers don’t just care about a corporation’s link to charities; they also want corporations to be stand-up companies, regardless of whether they are engaging in explicit CSR-type activities. For example, if I lived or worked in Amalgamated Bank’s footprint, I’d be thinking of switching banks. Amalgamated Capital, a commercial division of Amalgamated Bank, has started a new program that is for so many nonprofits—and their clients–a dream come true. Any nonprofit that has a contract with a state government will be salivating! In its new program, which it believes is the first of its kind, Amalgamated will buy the voucher from a nonprofit that has been awarded a state grant. It will pay the nonprofit 70% of the grant, up front. No waiting months for money while still having to pay bills for doing the very thing the state asked you to do but is slow in the paying you to do it. No risk of cash flow challenges (at least not due to failure to get the state’s money in in a timely manner), temporarily closing down programs, having to furlough or let go staff, turning away clients, not sleeping at night, etc. When the state finally does pay the voucher to Amalgamated, it pays the nonprofit the rest of the money, minus a fee of 1%/month. In announcing this program, Greg Walker, director of Amalgamated Capital, said “… it’s essential that we keep vital community programs up and running.” Now that is corporate social responsibility—and hitting the bottom line at the same time.
Slice and dice it however you want, CSR–caring for the community in which the company exists and employees live and work—just makes sense, cents and dollars.
Look for Laura’s interview on Amalgated Capital’s example of corporate social responsibility in an upcoming issue of Nonprofit Business Advisor.
Want to know more about working with corporations? Look for our class on “Building a Strong Corporate Fundraising Program on 3/14/14. Registration opens 8/15.