In our last article we looked at the differences between philanthropy and CSR (Corporate Social Responsibility), and the wider benefits to a business for being socially responsible. Now lets take a look at CSR in more depth…
We can split CSR up further, to truly see all the aspects this term covers.

Ethical CSR

This is the legal and ethical requirements that a business must fulfil. This is the ‘cover your back’ aspect of CSR and failure to address these requirements can result in a loss of reputation, or even worse, legal prosecution. Large companies are well advised to have a specialist CSR department to keep on top of legal requirements, lack of knowledge is never a defence in a court of law! There are strict laws regarding working conditions for employees, and environmental laws regarding sourcing materials, emissions and so forth.

Altruistic CSR

Altruistic CSR goes beyond the basic requirements that any business must adhere to. An act of altruistic CSR may not directly benefit the company, at least, the benefits to the business will not be the main focus of the project, however, most acts of CSR do have a positive knock-on effect for businesses. Let us take a look at an example…

A company decides to have a fund raising event for a local charity. The employees get involved with various events, a non-uniform day, a raffle and a cake stall. An amount of cash is raised and a representative from the charity visits the company to accept a cheque. This event may have cost the business money, they may have lost man hours from staff involved in the event, and it doesn’t have a direct impact on the business, but the indirect impact can be far-reaching:

The staff will have fun, improving morale.

The staff will feel like they have done something worthwhile.

The staff will appreciate the fact that their employer cares enough about a charity to put on such an event.

The event may make the local paper, TV news or at least be talked about in the local community, putting the business in a positive light locally.

Strategic CSR

Strategic CSR is a carefully planned act of CSR that has a direct and expected impact on the business. This type of CSR is implemented primarily for the affect it will have on the business. The types of act involved could be quite varied, depending on the outcome desired, and may be initiated as a direct result of an external issue. Let us look at examples to show causes and response strategies…

A newspaper gives a bad write up on the environmental ideals of a business.

In response the company implements energy saving measures throughout the business and releases a press release detailing these actions. In addition they have a high-profile opening day for a small community recycling centre on their land. They invite a celebrity to open it. They receive some good publicity as planned.

Staff turnover is high, morale is low. The business isn’t keeping their employees long enough, work isn’t getting done, but the business can’t afford to increase wages across the board.

In response, the business holds a consultation with all staff members, everyone is included, from the work experience girl, to the cleaner, to the CEO. This helps the staff to feel that at least their needs are being listened to. As a result some changes are implemented. A gym is installed for staff to use during their lunchtimes and flexible working times are planned for future implementation, allowing staff to more easily deal with family commitments.

The business is worried that they are not getting enough highly skilled applicants for job vacancies.

Looking at the long term future of the business, the company sponsors scholarships at a local college for a student to study relevant skills, with the offer of a work placement at the company. An investment in education now, could pay off well in the future.

So you can see, there is so much more to CSR than simply acts of philanthropy. CSR is an increasingly important aspect of running any business, and it goes far beyond simple legal and ethical obligations. You will also now realise that the positive effects of well planned CSR can have a far reaching impact on a business. CSR is definitely not all about generous acts, out of the goodness of a company’s heart.

Forward thinking businesses would do well to invest time and money on their CSR strategies. It may well become even more important as we move into the future. It’s a win-win ideal for businesses, communities and the environment. Businesses large and small tend to receive a lot of bad press when it comes to social and environmental responsibility, so the importance to turn this around should be at the forefront of any businesses plans for the future.

Lincoln Martin is pioneering a “social impact” business model, called Client+Agency+NGO Partnership (#CANpartner). To learn more on CSR, philanthropic marketing projects and how to give back to the community, write to ems@lincolnmartin.com.