giving to get ahead


July 22, 2012

Last week’s cover story in Capital Business described how nonprofits are acting more like corporations. Interestingly, there’s a flip side to that trend: corporations that are acting more like nonprofits.

In the parlance of the business world, this is known as corporate social responsibility, or CSR. The practice differs from traditional corporate philanthropy in that it does not merely involve donating money, time or other resources to a worthy cause or causes. Instead, CSR seeks to align a company’s business mission and practices to the larger interests of society.

Any savvy business executive will tell you that CSR is increasingly becoming a contemporary business imperative. Why? Americans are demanding more and more out of the companies they patronize and even work for.

Indeed, there is some evidence that given a choice, people would prefer to do business with companies that demonstrate a commitment to social good — from human rights and employee welfare to environmental sustainability and community development.

For example, a 2011 Deloitte survey found that 70 percent of millennials (people born between 1986 and 1994) say a company’s commitment to social responsibility influences their decision to accept a job offer. Fifty-eight percent of millennials in the survey said they were willing to take a pay cut in order to work for a company that shares their values.

Unfortunately, some companies are jumping on the CSR bandwagon without fully understanding what’s involved in building a successful CSR program. It is not enough to just slap a CSR unit or program on the organizational chart. CSR must be embedded within the company’s operations. As Wharton professor Eric Orts notes, “For companies to take CSR seriously, it has to be integrated into the DNA of the enterprise.”

There are a number of ways to accomplish this. One popular approach is establishing a CSR program that actually aligns closely with a company’s brand or business mission.

For instance, Bethesda-based Marriott in 2010 introduced a “voluntourism” package to support New Orleans Katrina recovery efforts. The “Spirit to Serve New Orleans” connected hotel guests with Habitat for Humanity. Guests spent two days rebuilding homes in exchange for discounted hotel accommodations.

Allstate offers customers periodic bonus checks for remaining accident free. Obviously, reducing car accidents makes good business sense for an insurer like Allstate. But the program has also allowed the company to position itself as a responsible corporate citizen.

Restaurant chain Chipotle has grown over the years, in large part because of its commitment to what it calls “food with integrity.” That approach has transformed Chipotle from just another restaurant chain into a business with a good reputation and a loyal following among environmentally conscious and health-conscious consumers.

In today’s brutal economic climate, many companies might be tempted to drop their CSR initiatives. But that would be a short-sighted and even counterproductive move.

CSR initiatives achieve positive social ends, while building good will for companies and strengthening their brand positions in the marketplace.

Shrita D. Sterlin is chief executive and brand officer of Penn Strategies, a Bethesda-based branding, public relations and marketing firm.

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