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Finding your “sweet spot” for community investment

By Sabrina El-Chibini and Dmitri Kharitidi

Your company, with its unique set of possibilities and limitations, has a sweet spot for both volunteer time and funds that it can sustain over time.  This is the spot at which you provide maximum return for society and business at the lowest risk. 

 

Whether you are transactional or transformative in your approach to community investment, it is important for you to find your sweet spot.  Doing so will help you reduce risk that is associated with some common and well-intentioned community investment practices.  Despite your best intentions, these can negatively impact stakeholder perceptions, including those of employees, non-profits, and community members.    

 

Here are 5 common practices and the risks that are inherent to them:

1. Trying to please everybody all of the time

 

If your company does not have a specific identity as an investor in the community, stakeholders will perceive this as free reign.  Board members, executives, employees, non-profits, and community members will approach you with requests that you will need to react to.  You will typically be able to fill some, but not others.  In addition to the administrative burden that this places on you and despite your company’s best intentions, you will leave some stakeholders feeling disappointed.  

 

2. Mistaking volume for effectiveness

 

The Chief Sustainability Officer (CSO) of a corporation whose image rests on being perceived as a good corporate citizen in the community shared this concern with me:

 

"Our owners believe that volume equals impact.  They want more activities, more often. I know that this is not sustainable from any perspective, i.e. neither from the perspective of my team nor from the perspective of our community partners.  I may be able to make certain community groups happy today, but next year when more groups come forward, or when the same groups come forward asking to do more with us, I won’t have enough resources to go around.”

 

An exhaustive review of current frameworks that measure companies’ non-financial performance was recently conducted by NYU Stern.  The research determined that measurement of social parameters almost exclusively targets efforts to advance social objectives (92%) as opposed to the effects of those efforts (8%) (1).   In the case of community investment, an example would be the sum of money spent (an effort of $1M for example) versus the effect or social impact of the expenditure (having increased by 1% the proportion of teens who graduate from high school or having created 20 new jobs in a given community). It remains commonplace in the market today to equate volume with effectiveness.

 

3. Being a great - but inaccessible - corporate citizen

 

This brings to mind two recent occasions.  One of our MBA students who is benefitting from The Collaboration Vector Inc.’s (TCV) mentorship program told me that she had researched a CSR program advertised by a large and reputable corporation.  The program’s objective was to prepare young people for the workplace.  “This is an interesting program and well suited to me,” she said, “but I have tried everything and I just can’t get an answer from this company”.  

 

On another occasion, the CSO of a large corporation was presenting an initiative where employees transferred a much needed core capability to support non-profit organizations with numerous projects.  The initiative was very successful.  More and more employees were participating and more partners wanted to become involved.  Several participants raised their hand to inquire about how to access the program.   There did not seem to be a plan in place to accommodate this increase in demand.  This is a case of “runaway syndrome”.  Great opportunities will be missed and a perception of “inaccessibility” will be propagated. 

4. Adopting blanket policies that leave money on the table

 

One company I recently spoke with told me that they offer one day a year to each employee for community work and like many other companies, they allocate a pre-set budget for community investment. 

 

How do you know what the right time or budget allocation is for your company? Of course, you can benchmark against best, standard, or acceptable practices in corporate social responsibility (CSR).  However, in addition to benchmarking against these standards, each company should ask questions relating to its own identity and “uniqueness”. 

 

The risk of not doing so is to leave money on the table.  Resources become allocated and administered, but not necessarily used efficiently.  For example, is a blanket policy of 1 day per year the right formula for your unique workforce?  Do you know what proportion of your workforce is ready, willing, and able to engage in community work?

 

5. Adopting policies that are inefficient for non-profits

 

Non-profit partners are the ones who have the pulse of the community.  Finding your own sweet spot will also help your non-profit partners do what they do best,  which is to meet community needs. 

 

Ask yourself if your company’s policies are creating inefficiencies for non-profits.  For example, your policies may be hijacking scarce non-profit resources in completing lengthy grant applications that have little likelihood of being accepted.  Alternatively, you can be welcoming non-profits to the table in order to discuss what social progress you will achieve together. 

 

Here are 5 actions that will help you set clear expectations among your stakeholders as you establish your “sweet spot”:

 

  1. Determining who you are and who you are not as a community investor

  2. Adopting a focused, proactive approach

  3. Accompanying partnership projects with a plan to support their growth

  4. Expanding investments based on effectiveness

  5. Taking a critical look at your community investment policies

You may need to build new things out of the same building blocks

 

Since CSR is now viewed as integral to achieving business objectives, and we know that it is multi-faceted and complex, perhaps we should consider asking the following questions:

 

  • How should we benchmark expenditure?  Is it against marketing spending? Operations spending?  Training spending?  Philanthropy spending? 

  • Is it time to give our community investment program a “promotion”? Can we view it as a complementary and alternative vehicle to traditional approaches to driving business performance?

  • Is it potentially transformative and well-suited to address complex, contemporary needs of stakeholders today? 

  • Is it time to revisit routine, traditional approaches that may not be keeping up with the times and with changing workforce and consumer demographics? ​

Interested in finding your sweet spot? 

Contact TCV

Inherent to Transformative Community Involvement™(2), an approach originated by TCV and proven to create positive social and business value, is the ability for companies to find their community investment sweet spot efficiently.  Using a specific methodology, companies learn to adapt it over time, ensuring that it remains optimal in the long-term.  This increases predictability and reduces risk.

 

The Collaboration Vector Inc. (TCV) is a consultancy firm and implementation partner to changemakers who are seeking mutual growth for business and society. TCV originated an evidence-based approach to building community programs that moves stakeholder engagement from transactional to transformative™, delivers multi-dimensional business and social impact, and differentiates your Corporate Social Responsibility strategy. Our team of dedicated strategists, business professionals, and researchers provide strategic planning and design, stakeholder engagement, partnership facilitation, business and social impact measurement, program evaluation, reporting and impact communications services. We are wholeheartedly committed to results. 

 

©The Collaboration Vector Inc. 2018.  All Rights Reserved.

(1) Casey O’Connor and Sarah Labowitz.  Putting the “S” in ESG: Measuring Human Rights Performance for Investors.  NYU Stern.  Center for Business and Human Rights.  March 2017.

(2) “Transformative Community Involvement: What it Means, What it Takes, What it Gives”, Sabrina El-Chibini, 2016. Link.