Can Giving be Good for Business?
Most business owners I meet think they need to wait until they have enough time or money before they ‘give back’. I used to think this too until I discovered that the opposite is true–that focusing on impact and partnering with causes can be a powerful way to grow your business and do good at the same time.
I experienced this first hand when my business started to grow on the back of the fundraising I was doing to raise funds for my humanitarian trips to Rwanda. Over the years I’ve also worked with clients who have also taken on more business as a direct consequence of strategically linking charitable projects to their business goals. I’ve also spoken to many other business owners who have experienced this too. Particularly those who do more than simply make philanthropic donations to causes.
Before I share some of the numerous research studies that conclude charitable giving is good for business, let’s first explore why it’s taking so long for micro and SME businesses to realise this.
Read on to find out more, or listen to my podcast on this topic HERE.
In my opinion, there are three key reasons:
1. The traditional role of business
One of the problems is that culturally most people see the role of businesses first and foremost is to make money and provide jobs. As though charities and social enterprises are the only types of organisation that do good. That may have been the case historically but things are changing.
Nowadays over 80% of consumers now expect businesses to do more than make a profit. Likewise, consumers, staff, clients, and investors are increasingly choosing to buy from, work for, partner with and invest in businesses who can demonstrate the good they are doing in the world–see below for further details.
Smart businesses, particularly those being set up by young innovative business owners and entrepreneurs are incorporating social impact and business giving strategies is the way to develop a meaningful brand, attract customers, staff, partners, and investors.
Examples of business for good brands include gAdventures, Airbnb, Patagonia, Toms Shoes and Kind Healthy Snacks. More locally in Scotland, we have Brewdog, Brewgooder, Social Bite and Choose Water.
That said, there is still a disconnect between customer expectations and perceptions in that when organisations do good, some can be skeptical as to their motives. I’ve also heard of people being critical of causes that partner with businesses, as though they are getting into bed with the enemy.
If business is really to be seen as a force for good, we all have a part to play in changing attitudes. As business owners and leaders, we can all take action to start making that change happen with a congruent message across all areas of a business.
2. The desire to ‘give back’ is hindering charitable giving
Stop ‘giving back’. To me, there is something better we can do instead.
I hate the term to ‘give back’. Why? Because I feel it’s often used in a way that is hampering rather than helping charitable giving.
The literal meaning of the phrase to ‘give back’ is to give something back that doesn’t belong to you.
Obviously as individuals, businesses, or countries if we have things that don’t belong to us then, of course, the right thing to do is to give them back. But nowadays ‘to give back’ is also commonly used to express our desire to contribute or make a difference in the world.
The main challenge I see with this is that it often implies we need to wait until we have the time or money BEFORE we give back–whether this is personally or through our work.
In the context of business, ‘giving back’ nurtures the belief that we need to be generating enough money or profits before we support causes.
The result is that many business owners, entrepreneurs, and SME leaders, who want to support causes don’t. Because they are waiting until they have the time or money to it.
Yet supporting charities and social causes is a powerful way to GROW and profitable business and do good at the same time as – no matter what stage of business you’re at. You don’t need to wait.
There are many ways to support and partner with causes depending on the needs, resources, and focus of your business.
For example, incorporating fundraising into your marketing (known as cause marketing), sourcing social suppliers, volunteering your time or donating excess stock. Or you could introduce environmental policies in your business that are similar to those you apply personally e.g. using re-cycled paper.
So rather than waiting to ‘giving back’ how about GIVING NOW instead?
3. The unfortunate legacy of CSR
For business owners who previously worked in companies or organisations where CSR sat on the peripheral of the business, and seemed more like an afterthought or tick box exercise, our experiences have helped shape the belief that charitable giving doesn’t add value to a business. Unfortunately, if we believe this to be true, we’re more likely to set up businesses that focus on generating income as a means to success rather than realising we could generate income through focussing on impact.
In response to changing consumer trends and advances in technology, there is an increasing number of companies being set up that put social impact and solving social problems at the heart of growing their business.
Many larger established companies are realising their future depends upon the impact they have on people, communities and the planet and that they need to better embrace social impact and business giving strategies. However, their efforts can be hampered by an incongruence of policy across operations and the time it takes consumers to change their perception of a well-known brand.
Thankfully for small to medium-sized businesses, it’s much easier and quicker to incorporate social impact and giving strategies into your business and to re-position yourself as a business for good brand–no matter what stage of business you’re at.
So what’s the solution? To start focusing on impact and charitable GIVING NOW no matter what stage of business you’re at. If you’re unsure how I share more about this at the end of this article.
But don’t just take my word for it. Let me share the findings of some research studies on business giving, of which there are many:
- Meaningful brands outperformed the stock market by 206% over ten years to 2016 (Havas Meaningful Brand Report. Check it out HERE)
- 86% of US consumers expect companies to do more than make a profit (Cone Communications Study 2017. Check it out HERE).
- 89% of US consumers say they’d switch brands to those associated with a good cause, assuming a similar price and quality (Cone Communications Study 2017. Check it out HERE).
- 57% of UK consumers said companies should be actively involved in solving social or environmental problems (Havas Meaningful Brand Report. Check it out HERE)
- Companies that outperform in important social and environmental areas achieve higher valuations and margins (Total Societal Impact: A New Lens for Strategy – 2017 Report by Boston Consulting Group. Check it out HERE).
- In 2016, 25% of global managed assets was invested in socially responsible companies – 40% in the UK, 20% in the US (Total Societal Impact: A New Lens for Strategy – 2017 Report by Boston Consulting Group. Check it out HERE).
There are also a few global initiatives that support the need for businesses to focus on tackling social and environmental problems:
The UN Global Goals
In 2015, global leaders from 193 countries united to define the 17 UN Global Sustainability Goals (often known as the Global Goals). The aim is to tackle the key challenges that threaten the sustainability of humanity, peace and the planet by 2030.
Countries pledged their support of the goals and it’s widely accepted that the only way these can be achieved by 2030 is if businesses take action towards these too.
In practical terms, they are a fantastic framework for identifying the impact you want to have in the world through your business or your purpose if this is something that’s proved elusive until now.
Since aligning my business with poverty, education and social justice it’s made it much easier for me to decide what charitable activities I want to be involved in. Hence why the focus of my business is now about making it easy for commercial businesses to become a profitable force for good and my recent decision to raise funds to build a school in Cambodia. My plan is to do far more than simply build a school but to provide ongoing support to a community that has suffered extreme poverty and social challenges since the genocide there forty years ago.
I’ll be talking more about the UN Global goals in a podcast episode and article dedicated to this topic in a few weeks.
Fortune Change the World List – top 100 companies that have a positive social impact through core business activities.
A letter from the founder and CEO of Blackrock – to all business leaders one of the world’s largest investment companies (assets under management) that included the statement “to prosper over time, every company must not only deliver strong financial performance but also show how it makes a positive contribution to society… ”
My intention for this post is to highlight a strong business case for commercial businesses of all sizes to focus on more than simply making money. That all types of business have a place and responsibility to help tackle social and environmental problems.
If you’re someone who would like to do more, don’t worry if you don’t know how to yet. Focusing on impact and charitable giving is a new concept for most founders and leaders of micro and small-to-medium sized businesses. Many well-intentioned business owners and leaders who are driven to make a difference have not yet unleashed the full potential of the social impact they could have.
The good news is that if you’d like to step into this space and learn how to turn your business into a greater force for good, that’s what I can help you with. Just get in touch to find out more.
Often described as one of the most authentic and inspiring souls you can meet, Alisoun is on a mission to improve the lives of a million people – by making it easy for businesses to be a profitable force for good, and through her support of causes that tackle poverty, education and social justice.
Alisoun’s keynote talks, training, mentoring, and best-selling books Give-to-Profit: How to Grow Your Business by Supporting Charities and Social Causes and Heartatude: The 9 Principles of Heart-Centered Success have favorably changed the good fortune of thousands of people worldwide. She loves doing humanitarian work, fundraising and living by the beach in Scotland.
Alisoun is also the founder of the Give-to-Profit Community and has written the following free resources:
- Ebook: 101 Ways To Attract Great Clients, With Heart, Integrity & Social Impact (click here)
- Ebook: 52 Ways to Raise Funds for Charities and Social Causes Through Your Business (click here)
- Ebook: The 9 Secrets to Signing Up Clients Without Selling (click here)
- The Online Course Creator Checklist – download here.
You can connect with Alisoun here: