— Ananda Kumar
Do businesses have to use CSR as a proxy for philanthropy or use CSR as a means of extending their branding or can they look at using CSR to achieve both objectives? This is something we will evaluate further and explore.
Lets look at a sample set of Indian Corporates who are running CSR programs. The Apollo hospital chain has a CSR program where their mission is to touch a billion lives. They strive to reach out to people from every walk of life and do their bit to help people stay healthy. Grundfos Pumps India and NDTV run a Mission Energy (ME) campaign, a campaign to create awareness about the importance of saving energy and to provide ideas to conserve energy. Biogen Idec India on world multiple sclerosis (MS) Day, launched MS Day campaign to educate and empower the general public to understand the challenges of those who live with the disease. We have the GMR foundation doing great work and also the tata group and many others who are working on noble social causes as part of their CSR strategy.
The pertinent question to ask is whether these organizations approach their charitable activities with an eye toward enhancing their brands or are they focused on a larger social cause?
Let’s explore the business + causes model. Those that did combine business and social causes committed talent and know-how, not just money, to pressing but carefully chosen social needs and then told the world about their cause and their dedication to serving it. Through the association, both the businesses and the causes benefited in ways they could not have otherwise.
Cause-branding as a CSR strategy has helped social causes enjoy financial rewards and unprecedented support both inside and outside companies. These strategies have also helped organizations enhance their reputations, deepen employee loyalty, strengthen ties with business partners, and even sell more products or services.
The causes acquired not only additional funds but built a higher profile and a bigger base of supporters most of the time. Internally, the organizations witness increasing employee commitment to the causes and to their jobs. Organizations that demonstrate a sense of social responsibility stand out in a world of increasingly undifferentiated goods and services.
Indeed, going public with a cause program can make a company significantly more attractive to stakeholders. Consumers, for their part, increasingly shop with a cause in mind and consider a company’s support of social causes when deciding which products to buy and recommend to others.
Despite its many advantages, cause branding as a CSR strategy does have limitations and pitfalls. It is not a fix to a damaged reputation. We have seen many cases of this type of an approach where controversial companies use social causes as a way to repair their credibility but ends up causing increased cynicism with the consumer. There are also situations where if a company supports a cause that is supported by dozens of other firms but fails to claim a special piece of the cause as its own, it will not be able to differentiate itself in the marketplace. Companies typically make a bigger difference in a less popular area than a crowded one. This should be kept in mind when developing a social causes CSR strategy.
Most cause-branding programs should be about enhancing corporate brands in ways that are meaningful to key constituencies: customers, employees, communities, government officials, or suppliers.
Indeed, almost any social cause can find a home in some cause-branding program. Typically, most organization chosen causes tend to crowd under the consumer-friendly umbrellas of education, health, and children. But some companies have successfully branched out and taken more risks.
The business objective of a cause-branding campaign can be anything from increasing sales, forging new business relationships, and improving customer loyalty to something as broad as enhancing overall reputation. The philanthropic objective could be raising awareness of a critical need, inspiring consumers and partners to take action, or raising money. But finding a single cause that satisfies both a business and a social needs objective, reconciles them, and at the same time does not clash with the brand identity is a highly complex undertaking. To complicate issues further, if the business objective of the cause-branding CSR program is not a strategic goal of the company, even the worthiest cause will fail to engage the energies of the company as a whole and fail to demonstrate staying power.
For a company even to consider putting its finite resources behind a cause, the competitive logic for supporting the initiative should be clear to senior executives in HR, marketing, sales, community relations, government affairs, and other key areas.
Keep in mind that it takes years to ameliorate a social problem and just as long to build a brand. When a organization embraces a single charity in lieu of a cause, it runs the risk that the distinct character of the charity’s brand will interfere with the message the organization is trying to convey.
A charity will have its own mission and priorities, which may not fully correspond with the corporate sponsor’s goals. And it may have a dramatically different management style. It may have a decentralized structure that prevents it from controlling its programs at the grassroots level. It could also have many sponsors, some from the same industry, all competing for attention.
The selection of a cause poses fewer hazards, since the company is free to broaden, narrow, or otherwise redefine the cause as conditions evolve and a program makes headway.
Playing an alternate CSR strategy involves companies with cause programs, who are not giving massive amounts of cash but instead are strategically leveraging their resources, whether they be professional skills and technical knowledge or such physical assets as distribution networks to help serve a larger social cause. Examples could be ICICI bank focusing on financial literacy for the masses by sharing their knowledge of personal finance. Tata Tea’s JagoRe programs objective is to instill integrity.
This type of an approach will work well when the organization’s assets are involved. High employee engagement is not only a boon to any such resource based-branding effort, it is sometimes the tipping point. These programs enhance employee loyalty and aid recruitment. They can also make employees more enthusiastic about their regular jobs. That’s one of the main reasons the best programs are a far cry from basic checkbook philanthropy type of CSR.
It is really easy to say that companies should increase their giving, but what they really need to do is increase the types of support and better leverage their existing assets. Bringing skills and resources to a cause can inspire an entire community of employees, suppliers, customers, and government officials to make the cause their own. Each of these individuals in turn interacts with people further afield. Support for the cause then spreads, and the brand is more widely propagated.
With increasing social media activism, companies should be prepared to live by the standards they preach. The most successful CSR programs use a range of internal and external communication channels, including the Web, annual reports, direct mail, and advertising.
The cause-branding efforts most likely to be accepted by the public and the media will appear neither improbable nor forced. A bad fit would be an organization that in accepting help from a particular donor betrays its principles. Equally dangerous are situations in which a respected nonprofit seems to be endorsing a company’s products for purely mercenary reasons.
Companies should not “distance their CSR strategy from the business” but support programs to which companies apply their “unique assets and expertise.’’
In today’s world, companies cannot escape being viewed as forces in both the marketplace and in society. In the wake of recent scandals, their treatment of investors, employees, and the environment has become a matter of intense public concern.
Resource based CSR is a way to turn corporate citizenship, generally thought of as a set of obligations, into a valuable asset. When the cause is well chosen, the commitment genuine, and the program well executed, the cause helps the company, and the company helps the cause.
The author is man of many talents, he was the CIO of an international MNC, is a serial entrepreneur and management consultant. He is currently consultant VP of a smart metering company and Partner at HR.com. When not giving gyan or mentoring people, he can be found tinkering around. Follow Anand @azkuma