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Why and why has ‘giving’ become core business

Where and why has ‘giving’ become core business

Edward Shuttleworth, CEO of SeeBeyondBorders that Aberdeen is proud to support, tells us why he thinks giving has become a core business.

With the expectations around Corporate Social Responsibility ever evolving, the way charity and business work together is changing. The amount of commercial funding available to support the work of charities is under pressure. Amid continuing Government austerity measures and discussion about a ‘Big Society’, the community is increasingly looking to business to show leadership on a much broader front, including tackling complex social problems that don’t respond to the short termism of political rotation.

Austerity hits the vulnerable first and the hardest with many worthy organisations turning to business to help meet the funding gaps left by the cuts. In response, business has naturally been part self-protective and part responsive, investing in individual approaches framed by their own activities and community interactions, defining much more clearly who they will engage with in order to best manage the time they have available and the return they can achieve.

To demonstrate growing relevance, small charities, such as See Beyond Borders, have to clearly articulate their points of difference and link those to where they are most likely to win support, if they are to compete effectively for the funding they need with the resources available.

The direct returns for business

In the current reality, customers and employees can and do exercise their social preferences for where they spend money and where they work, based on our unrestricted online-interconnectedness. Hence ‘self-regulation’ is developing real teeth with stakeholder responses where business gets it wrong, plain to see in financial performance. Corporate Social Responsibility (CSR) is changing the corporate culture to embrace doing the right thing. ‘No longer a bolt on, but part of core business’ CSR is moving business to take a broader view on value created and improving corporate accountability through more sophisticated measurement systems of positive and negative impact. Dynamic measurement initiatives including the Six Capitals, have taken illustration and reporting on commitment beyond-profit outcomes and beyond triple or even quadruple bottom lines.

In this ever more complex world of interconnections, charities should do more than offer an organisation its mailing list or brand association. They can back up an organisation’s aspiration to be perceived as both benevolent and to act with integrity, but to do this there must be more than a skin deep relationship. Of course there is no magic bullet to demonstrating engagement, although huge international organisations links with big brand charities have provided them with a low risk strategy in this regard. However, it no longer escapes people’s notice that there is no opportunity for any one organisation to influence the thinking or approach of a mega-charity. Conversely, stories of involvement with smaller charities will likely be much more personal and engaging and the intimacy of deeper relationships and connections demonstrates greater involvement in, and commitment to, the objectives of the supported charities by the business and its employees.

Values alignment is a clear business opportunity for businesses to leverage off charities. There are a number of ways in which charities operate, promoting different philosophies and working towards different outcomes. Selecting what best fits a business’s own brand messages and so choosing appropriate charities to support, provides opportunities for staff as well as customer engagement.

For See Beyond Borders recognising what it can offer the marketing department, the CSR department, the personnel department, and even, the Corporate Foundation, is central to securing the support the charity needs for its work. If a charity is able to secure a grant from a business it proves that the particular business supporter trusts the charity enough to reflect its core business values. This says a great deal about both organisations and also illustrates how business funding for charities is evolving in terms of the time invested by both business and by charities to understand one another’s worlds.

Returns on Social Investment

The long term impact giving can have for the communities supported is a key measure of the effectiveness of any giving strategy.

A starting point when assessing return is to identify different types of charity and their aims. Excluding - single purpose initiatives focused on evangelising, politics, animals or medical research, there are three broadly accepted categories of charities: those providing ‘relief’, ‘development’ or ‘welfare’. ‘Relief’ provides temporary support to people in emergency situations after natural or chronic disasters. ‘Development’ addresses structural inequalities, working with communities to help them meet their basic needs. ‘Welfare’ provides direct assistance to alleviate immediate needs rather than the root causes of those needs, such as food, clothing sponsorship or scholarships, institutionalised care, and medical care or hospices.

Selecting between these charitable models requires a choice between sympathy and selective investment. The immediate relationship between problem and action, by welfare and relief agencies often appears to be relatively clear, providing a compelling case for a compassionate response focussing on a quick fix. For ‘development’ organisations, this relationship may be extremely complex with problems appearing intractable, action having to be multidimensional, and solutions naturally only emerging after some time.

We must acknowledge the complexity of measuring a return on investing in ‘doing good’ in any context. Such a return might be more appropriately considered an impact, rather than a function of a traditional measure of profit and loss.

First consider the return from relief. For example, supporting victims of the Nepal Earthquake, where we are encouraged to give ‘Just £5’ by a poster depicting a person still covered in dust, being lifted from the remnants of what was presumably once their home. There is a clear appeal for sympathetic support and this investment feels appropriate. But answering deeper questions like “How does the £5 change the lives of those affected beyond the blanket it buys?” is a complex exercise. This feeling of appropriateness for the immediate, still dominates the rationale for business giving, generally set in a local context, such as feeding the homeless in London. However, donating to organisations that focus on ways to reduce future risk is increasingly being considered.

Training teachers and measures that go to addressing the circumstances underlying the social inequalities abundantly evident in the world’s poorer populations, offer less obviously gratifying returns. They are however, generally easier to define, with this form of charity more used to the rigours of reporting impact through such measures as student attendance levels, examination marks, teacher achievement levels, community involvement etc. A note of caution should be applied to these static measures, given lasting solutions generally emerge over the long term. (Possible regression once a project is complete is a major difficulty with achieving sustainability and a subject for a future article). The longer term impact is the key measure.

Pursuit of development goals has been the province of the more sophisticated donors or Government. However this is changing as business applies more rigorous standards to its ‘giving’ and better understands the dangers associated with long term dependency and institutionalisation. It may be far better to go to the source of the problem, than continue to nurture its consequences, recognising that these interventions do not have to be mutually exclusive.

Unashamedly, See Beyond Borders argue that taking people to see and be involved with what they do, achieves real impact in the communities it supports – there is no substitute for direct involvement, seeing and experiencing what is happening on the ground. Gaining an appreciation for the broader issues faced by charities is perhaps one of the biggest dividends from that investment, both for the investor and for the beneficiaries.

The views above represent those of SeeByondBorders and not those of Aberdeen.

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