Mid-Sized Businesses Often Fail to Connect the Dots on Corporate Philanthropy

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May 20, 2014; Business 2 Community

Mid-sized companies, which represent about one-fourth of American businesses, are actively engaged in corporate philanthropy, largely with local charities. Yet even as these companies move beyond “checkbook philanthropy” to broader involvement in causes, a report suggests many have not yet figured out how to reap the benefits of employee engagement in their communities.

A survey conducted by Business4Better shows that while leaders of many mid-sized companies are invested in the idea of corporate social responsibility (CSR), they have not fully grasped the potential benefits to both communities and employers of actively engaging employees in their philanthropic programs.

The survey report is based on responses from 173 executives of mid-sized companies and highlights the following sometimes inconsistent trends:

  •  More than 75 percent of companies surveyed engage in CSR to impact their communities, not their bottom lines. Only 12 percent expect “profitable ends” from their community involvement.
  • Mid-sized companies are still heavily involved in checkbook philanthropy, but are increasingly moving toward more comprehensive approaches to CSR, with 40 percent of those surveyed offering employees time off to volunteer and 30 percent engaged in providing pro bono services.
  • The CSR efforts of mid-sized companies tend to be “local and people-focused,” with two-thirds of their support staying within the same state as a company’s main office. Education, the environment, youth services, economic development, disaster relief, and arts and culture are among the areas most supported.
  • Many philanthropic efforts in these businesses are top-down, often aligned with a charity or cause championed by the CEO, but not necessarily embraced by staff, with survey respondents reporting that fewer than 20 percent of employees are involved.
  • Fewer than 10 percent of the companies surveyed said they use CSR as a tool for employee engagement. Yet of the approximately two-thirds of the respondents who say they measure the impact of their community involvement programs, more than 40 percent say they measure impact by employee participation or satisfaction.

Of course it’s good news that these companies are looking first and foremost to have a positive impact on their communities through their CSR efforts, and hardly a surprise that mid-sized businesses would opt to support local or perhaps regional causes.

What is a bit surprising, especially given the percentages of mid-sized companies supporting employee volunteer activities, is the apparent disconnect between giving back and the bottom line. Hopefully, a more strategic approach to employee engagement in planning and executing CSR programs will take hold in this business sector over time.

Ample evidence from larger businesses demonstrates that well-designed employee volunteer initiatives, which can run the gamut from hands-on projects to skills-based volunteering to nonprofit board service, yield impressive dividends in such areas as professional development, leadership development, team building, and employee loyalty and retention. There’s no need to compromise in any way on the desired impact on local communities. But there’s clearly room for improvement in connecting the dots between CSR and business performance.—Eileen Cunniffe