community investment

Yup, you read that correctly, I am exploring an ideation space. I'm calling this space My Tickle Trunk.  Thank you Canadian children's show icon - Mr. Dressup! Read more »

Today was an exciting day - I had my first blog-radio interview!  Thank you to Stuart Crawford at BulletProof IT for hosting the show on Blog Talk Radio.  If you missed the interview, you can listen to it here:  

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On Monday Petro-Canada and Suncor announced they were merging.  These two giants of Canada's oil sands and energy production might have an industry in common, but beyond that they dissimilarities are quite pronounced.

Petro-Canada, a former Crown company has a, "risk averse corporate culture," according to Deborah Yedlin, business commentator on CBC Radio's morning show.  Suncor, a younger company both in business age and corporate practise will have to find some common ground to move forward.  One area could be around their corporate giving program.

Each company reports how much they have invested back into community.  Petro-Canada goes as far as sharing its evaluation metrics.  Donations by Petro-Canada totalling approximately $15Million (2007) were spread across several programs around the globe.  This is just slightly higher than the dollars reported by Suncor at almost $14Million predominantly in Alberta and BC.  In addition to the dollars invested, both companies have an employee volunteer program and matching program.  As well, both companies are part of the London Benchmarking Group (LBG) Canada; a group of companies using the LBG Model to improve the management, measurement and reporting of their corporate community involvement (CCI).

With giving levels near equal it boils down to social vision.  How do you take two very different approaches to community and work, integrate them while at the same time improve the social fabric of where the new company operates?  There might be some concern by the charities that are supported that their funding could be cut.  There is also the possibility that the larger company will absorb both budgets. 

What I hope happens is that the new company will look at where there is overlap or duplication and facilitate the coming together of organizations.  For example, Inn from the Cold, The Homeless Foundation and the Calgary Drop-In Centre are supported by one or both companies.  Instead of looking at these individual agencies, perhaps this new company can look at the systemic issues leading to homelessness and the value of improving the living standards of lower-income/poor Albertans.  This doesn't mean that these organizations should fold, it means that they will have to hold a mirror to themselves and ask, "Am I doing the best, or if we check egos at the door and work on the systemic problems, will we actually achieve our missions and mandates.  It might mean that in the long-run one of us might not be in existence..."

This corporate merger could mean good things for the charitable sector - it could be the catalyst for facilitating mergers within the non-profit sector as well.

 

There are five stages of corporate philanthropy:

1. Cheque-book Philanthropy
2. Strategic Philanthropy
3. Community Investment
4. Corporate Social Responsibilty (CSR)
5. Corporate Citizenship

Social capital is the thread that ties these concepts together.  Using this concept businesses can recession-proof their companies.

In my previous post Bullet-Proofing your Corporate Karma, I presented five ways for you to ensure that your community reputation stays intact during this down-economy.  This post looks at how you can take your community partnerships to a new level in a down economy.

From a business development perspective, charities are going to be impacted by the recession just as businesses will be.  They will have fewer dollars to communicate their message and fewer avenues to share their story with (as companies pull out of community projects, decreases the community contact).  When you look at this contracting market there is opportunity for your business to jump into this void.

What does this look like?

1. Cross-promotions: Charities need new and creative vehicles to tell their story.  Your company has the marketing vehicle and the need to connect with a new market.  By evaluating what type of client you are looking for, you can source out the types of charities that your client will be attracted to.  Negotiating a cross-promotional package is a win-win-win for: your business, the charity, and the client that you are attracting (you are supporting the charity that they are supporting).
2. Employee Cost Reduction: On average it costs Canadian companies, 3x an employees' salary to train someone who leaves within the year (this obviously decreases the longer an individual stays with a company).  This is an expense your businesses cannot afford... in any economy.  One way to retain employees and to cut costs associated with those individuals, is to shorten the work week while connecting with your community partner.  What does this look like?  You can offset the expense of that person by having him/her "work" for a charity that is aligning with your business.  In essence, this individual is now acting as an ambassador, both for your company and for the charity.  You are minimizing the costs for the charity by providing them with an employee so that more money is going towards what their mission is.  There are two ways you can save money - by donating the value of the hours of that person to the charity you can garner a tax credit OR you can negotiate a shorter work-week with that individual generating an actual cost-savings.  The result: You are strengthening your position within community which will directly correlate to your bottom line.  One final justification for this work-schedule model is - studies have shown that Gen Y'ers would sooner have a day-off for volunteering than financial compensation.  Playing into that emotional paycheque is just as important as financial compensation.

These are just two cost-effective ways of Recession-Proofing your company.  I would like to hear how you are using community partners to shore-up your business during these tough times.

One of the first things to go during a tough a economy are the "little extras" within your company.  Many businesses, small and large, see community investing as one of those "little extras." 

During weak economic times, Community Investing and CSR policies and activities should NOT be considered a perk.  What these two company standards offer, are a place to hang your hat in community and a method of leveraging your brand when your competition is handing out pink-slips.

One company that is not only honouring their commitments, but has said that they are going to be expanding their company (and hopefully therefore their community connections) is West Jet.  In an interview on last night's news, Sean Durfy, President of West Jet informed the media that during a recession, discount airlines actually fair quite well.  In fact, he feels that they will be looking at expanding their services within North America and Internationally (Mexico). 

Here are five things that you can do to Bullet-Proof Your Company's Social Karma:

1. Honour your previous commitments to the best of your ability
2. Communicate openly with your community partners and identify other ways to leverage your company brand without compromising integrity
3. Share your concerns with your employees - some of them are also committed to the same charities that you have partnered with on a corporate level
4. Review your community investment and CSR policies to ensure that they still align with your company's values.  Make sure you share your findings and encourage feedback from your employees, clients, community partners, shareholders and other interested parties
5. Last, but not least, highlight the important things that you have been doing within community and how they have strengthened your business overall.  By showing how your community engagement has positively impacted your bottom line (staff retention, increased sales, etc.) you can justify the "little extra" that your company has put back into community

What are you doing to strenthen your company's social karma in this economy?  I look forward to hearing your suggestions and sharing them with the rest of the readership.

In an article written by Konrad Yakabuski entitled, The Kindness of Corporations in today's Globe and Mail, he shares his opinion of how CSR is not only about companies doing good.  My initial response was, well of course.  A company's key responsibility is to its shareholders.  The main purpose of a corporation is to generate revenue thereby giving a return on investment to those who have supported it financially.

 (Photo provided by: williamcho)

So how has CSR become so important over the past few years?  Is it the Al Gore effect?  This is what I think.  I think there is a value shift occurring in North America.  This value shift is playing out in the collective consumer consciousness.  Shareholders of corporations are part of that collective value shift so they are demanding changes in the boardroom.  Employees are part of that value shift and are looking for a more meaningful experience (the next promotion is not enough and nor is the pay).  I believe that consumers/clients of the corporation are the ones that are pushing the shift from the grassroots (see the book Mid-Course Correction by Ray Anderson).  And we cannot forget the vendors who are also part of the equation as their companies are going through the same pressure changes as the ones to whom they supply.

So what is happening with the charities in all this?  And the social enterprises that are seeking venture capital? How is government policy being affected by the corporate social responsibility movement?  I think that as a result of the CSR concept there are truer partnerships between charities and businesses.  Charities are using their corporate partners to help lobby government for social and environmental change (in Canada, charities are limited in the way and amount of lobbying they can do).  Businesses are using charities as a way to identify new markets, not just to "clean-up an image" or make face-time for a cause.  Government is rarely the leader of change.  They react to the voting public.  Policies are set because there is an undercurrent that is driving the policy.  It is somewhat oxymoronic to call government members leaders - they really follow in the grand scheme of things.  But that is neither here nor there.

Social enterprises are at an even greater advantage in today's market.  As the values of investors shift from simply looking for the next Oracle, these social enterprises can not only show how they are going to have a financial return on investment, they can also show that at the core of their business is community interests.  The direction that the business sector is shifting is one that CSR is not going to be an add on once the company is making money, but it will be an intrinsic part of developing a business plan. 

I recently had a conversation with Anne Howard and HR consultant who works with Canadian businesses addressing their HR issues. Our conversation evolved to how community investment strategy can be used as part of an employee attraction and retention program.  Labour issues have been covered extensively in the news of late and much has been around how the Gen-Yers have a different approach to work life than previous generations. 

What is work-life balance?  Is more than just one-day off a month to do volunteering?  Ryan Gill, CEO of Suitcase Interactive thinks so.  He has created a corporate culture that has brought community into the every-day managment of the company.

"At Suitcase we believe that true fulfillment is found through serving others. As a result, serving the community has become integral to our mission as a company. This enhances our purpose as a business and has inspired us to attempt to “give back” in a variety of ways.

Our staff’s involvement involves the following organizations. Whether we are serving lunch at the Seed, Donating blood, monthly making and serving dinners at Ronald McDonald House, sponsoring children through Compassion Canada, wrapping gifts for Operation Christmas Child or showing financial support to both Jacob’s Well and The Calgary Dream Center. We are passionate about this aspect of the company."

In addition, the office closes down for a period of time in November to volunteer in Mexico through an organization that Ryan established called Project Smile.  An amazing place to work and be a part of, Suitcase Interactive is setting a precedent for how companies today are engaging the younger professional employee.

Quantum Shift Media is another such company.  A start-up IT business, Quantum Shift has a virtual office with employees and partners around North America, attracting employees who want to be engaged in grass roots social change as part of their work life.

HR Directors and CEO's are starting to look at how investing in community is another way of attracting innovative employees.  McKinsey Quarterly has recently published a series of articles on the role of CEO's and companies in community investment.  Copies of these articles are attached and can be found in the Materials section of this website.

How is your company using community projects to attract new employees?

An article I wrote for OnPhilanthropy.com is now posted.  The direct link is: http://www.onphilanthropy.com/site/PageServer.

More blogging to come...