This article was originally posted on Forbes Business Council.
As a business leader, a changing economic landscape may give you pause, making you reconsider the magnitude and timing of your philanthropic or Corporate Social Responsibility (CSR) programs. Pulling back when demand is highest, however, is a mistake. Companies set an example to their employees, customers, and the market at large with how they manage corporate philanthropy in the face of economic insecurity. In recent years, the sheer number of crises—Covid-19 being the most impactful on a global-scale—presented unparalleled opportunities for social impact. While some companies responded by pulling back on their philanthropic efforts, others doubled down, expanding their CSR programs in the face of uncertainty. Those that projected fortitude in an inconsistent climate not only demonstrated confidence in the staying power of their companies, they also proved the value of their commitments. Covid-19 was a bellwether for change. Because a global crisis of such magnitude was unprecedented, it gave those that could help the imperative to do so, often in novel ways. Anheuser-Busch and Tito’s, for example, repurposed distilleries for the production of hand sanitizer. The Gap, Adidas, and Carhartt began making gowns and masks for first responders. Tech company Esri partnered with FEMA and the CDC to provide mapping of outbreaks. Likewise, Allstate, Blackrock, and American Express contributed significant funding to provide food and shelter for at-risk populations, which were hit especially hard during Covid. Regardless of sector, many companies came forward to offer what they could. Participating in social impact initiatives doesn’t have to look like one particular thing. Some companies engage via corporate giving, scholarships, or the funding of local programs that give back, while others sponsor workplace volunteer programs, providing time off for employees to do good, or matching their workers’ donations to charitable foundations. Regardless of which approach a company takes–some even include both corporate and employee programs–a visible and intentional commitment to philanthropy makes a significant difference in impact as well as in market perception. According to a recent study from the Harvard Business Review, “people only truly believe that [companies] have a purpose and clear values when they see management making a decision that sacrifices short-term profitability for the sake of adhering to those values.” Through corporations’ willingness to get involved in their communities in meaningful ways, they became more human, and by extension, more reputable. The lessons of Covid-19 appear to be lasting. Despite concerns of a looming economic downturn, a February survey from The Conference Board shows that 94% of major US corporations planned to maintain or heighten their charitable giving in 2022. Following the Covid-driven increase in community and civic engagement, brands have learned that loyalty is strengthened by genuine philanthropic efforts to increase wellbeing in their communities. In an increasingly automated world, customers—as well as current and future employees—are looking for companies with heart. So give some thoughts to these steps your company can take to start, increase, or continue giving in the face of a changing economy:
Once you determine the types of philanthropy programs you will provide -- be it community grants, disaster relief, workplace giving, etc. -- clearly communicate to your stakeholders, employees, and community partners. This will give you the opportunity to better engage all parties and also hold yourself accountable to the commitments you make.
For every company that pulled back in the face of the Covid-19 crisis, there was one that learned how to pivot. The companies that came up with creative ways to leverage their preexisting resources are the companies whose names we remember. Those are the companies that have built sterling reputations not only in their industries but in the market at large. Not only will finding creative ways of giving lead to sustainable, long-term impact in your community, so too will it add to your resiliency.
Companies that strive to make a difference attract and retain top talent, which is increasingly focused on finding meaningful work. Research from America’s Charities indicates that 71% of people prefer to work for a socially responsible company. With the added pressure of a down economy, employees may be less able to make financial contributions to causes they believe in. Supporting them with options such as a financial matching program, a “dollars for doers” initiative, or the allotment of company time for volunteering will keep your employees engaged and motivated while also serving your community.
Philanthropy News Digest suggests assessing the “costs per impact” of your giving programs to determine how best to allocate limited capital for maximum reach. Rather than relying on giving programs utilized during boom times, you may find alternative avenues of philanthropy that are more cost effective but allow you to affect meaningful social impact amongst a large group.Despite its inherent challenges, an economic downturn can also provide the opportunity to lean further into your philanthropic efforts, allowing you to serve as a beacon of consistency and goodwill when people need it most. By establishing or reinforcing your company as a dedicated player in the field of philanthropic giving, you not only do good in the world, you also solidify your role as a leader in your industry and as a front runner of social impact in the global community.