E027: Can Giving be Good for Business?

 
One of the most common questions people ask is whether charitable giving is good for business. In this show, Alisoun Mackenzie shares the strong business case for commercial businesses of all sizes to embrace social impact and charitable giving.
 
During this episode Alisoun shares:
  • 3 reasons it’s taking so long for micro and SME businesses to accept charitable giving is good for business
  • Research that proves focussing on impact and charitable giving can increase profits
  • How the UN Global goals are a useful framework for businesses who want to do good in the world
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Summary Transcript:

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. 
 
“Really?” People often ask. 
 
I experienced this first hand when my business started to grow on the back of 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 and business goals. And 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 (when done well) let’s first explore why it’s taking so long for micro and SME businesses to realise that charitable giving is good for business. 
 
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 type of organisation that does good. That may have been the case historically but things are changing. 
 
Because 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. 
 
Global examples include Adventures, Airbnb, Patagonia, Toms Shoes and Kind Health Snacks
In Scotland, Brewdog, Brewgooder, Social Bite and Choose Water are great examples. 
 
Although there is also a disconnect between customer expectations and perceptions: when organisations do good, some can be sceptical as to their motives – one reason why business giving needs to be considered at a strategic level. Some people are also 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. 
 
2.  The desire to ‘give back’ is hindering charitable giving
 
Stop ‘giving back’. Do something better 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 the verb ‘to give back’ is 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 be 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 being 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.
 
There are many ways to do this 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.
 
Likewise 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 starting to GIVE NOW–no matter what stage of business you’re at. 
 
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 after thought or tick box exercise, this experience helped shape our belief that charitable giving doesn’t doesn’t add value to a business. Unfortunately, if we believed this to be true, we’re more likely to have set up a businesses that focussed on generating income as a means to success rather than realising we could generate income through focussing on impact. 
 
Nowadays in response to changing consumer trends and advances in technology there are 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. I realise you may not know how to do this yet, and will share some resources at the end of the show and on the show page for this episode. 
 
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)
  • 86% ofUSconsumers expect companies to do more than make aprofit (Cone).
  • 89% of US consumers say they’d switch brands to those associated with a good cause, assuming a similar price and quality (Cone)
  • 57% UK consumers said companies should be actively involved in solving social or environmental problems (Havas)
  • Companies that outperform in important social and environmental areas achieve higher valuations and margins (BGC)
  • In 2016, 25% of global managed assets invested in socially responsible companies – 40% in the UK, 20% inthe US (BCG)
 
There are also a few global initiatives that support the need to 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. The 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. They are a fantastic framework for identifying the impact you want to have in the wold through your business or your purpose if this is something that’s proved elusive until now. 
 
Since aligning my business to 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 an episode dedicated to this topic in a few weeks. 
 
Fortune Change the World List–top 100 companies that have positive social impact through core business activities.
 
A call to all business leaders from the founder and CEO of Blackrock, one of the world’s largest investment companies (assets under management) – “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 episode was to highlight the 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 with me through my website www.alisoun.com or www.givetoprofit.com – as well as my book and courses I also work with business owners and entrepreneurs on a 1-1 basis and speak at events. The Give-to-Profit membership community will be live next month: August 2018. 
 
Thanks for tuning in today. 
 
Remember business is a great opportunity to be kind and what you do next matters…

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Check out Give-to-Profit

 Connect with your host: Alisoun Mackenzie

Other Resources

The UN Global Goals – https://www.un.org/sustainabledevelopment/sustainable-development-goals/

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