Shared Value Today

Bemused, Bewildered and Bothered

I’m often bemused by the volume of articles regarding Corporate Social Responsibility initiatives. What I find so bewildering is that so many originate from outside of the United States.  An article in The Hindu Times today, “Corporate social responsibility key to ensuring equitable society” reports on awards given to individuals and companies that have contributed to the betterment of their local communities – in India. One company was awarded because of their policy against hiring child labor.

Child labor is an issue in many developing countries and it seems to be an issue once again in the United States.

Newt Gingrich, the current front-runner for the Republican presidential nomination raised the issue last week calling child labor laws “stupid”. Mr. Gingrich went on to suggest that schools should employ their own students to do custodial work. “You’re going to see from me extraordinarily radical proposals to fundamentally change the culture of poverty in America,” he added. I would agree that this is a radical proposal but it is one that bothers me, greatly.

Many believe that radical fundamental change is needed in the United States. Where many differ is on what those policies should be and to what affect those changes should have on our society and culture. Do we really want to put kids to work or do we want to ensure that their parents are able to provide for their families to an extent that promotes upward social mobility and offers our kids an opportunity to achieve “The American Dream”? I believe it’s the latter.

A recent study from the nonprofit “Wider Opportunties for Women” finds that 45 percent of all Americans, men, women and children, live in households that lack economic security. WOW defines Economic Security as the ability to pay for basic needs including housing, food, transportation, medical care, and the ability to set aside a modest amount of money for emergency and retirement savings.

Consumers are outraged over the corporate scandals of the last decade, including Enron and WorldCom, mortgage lending abuse, bank bailouts, insider trading scandals, seemingly intractable high unemployment rates, huge compensation packages for corporate executives, record income disparity, environmental abuse, trillions of dollars of hoarded corporate profit and broken corporate promises. Their anger is justified. The widening income gap that began about thirty years ago and continues today exacerbates feelings of insecurity and fear of the future. American’s know that for the first time in recent history our children face a bleaker future than the future that past generations could look forward to.

This leads many to question the role of the entire corporate enterprise and prompts the questions that were asked by Edward J. Ludwig, Chairman and CEO of Becton, Dickinson and Company in his address before the Atlantic Legal Foundation on November 2, 2011. He asks “What is the true calling of capitalism? What is the true purpose of business enterprise? Do businesses only serve investors with a goal of maximizing shareholder wealth, or is there a broader calling for them to focus on broader societal value creation?”

As Mr. Ludwig said “I am suggesting that there is indeed a very real opportunity (or dare I say obligation!) for businesses to put societal shared value creation – identifying and expanding the connections between societal and economic progress – at the heart of corporate purpose. More and more leaders are embracing the reality that societal needs – not just conventional economic needs – define markets, and that societal harms and costs can create internal costs and inefficiencies for firms.”

Because the American consumer is demanding transparent and positive community impact enlightened and effective Corporate Social Responsibility initiatives have moved from “nice to have” to “must have”. Sustainability is no longer a catch phrase, it’s an imperative.

I don’t believe that we want to return to time where our kids are scrubbing floors or doing other menial labor instead of studying so that they can compete for the jobs of the future. We want and need a progressive society in which corporations contribute to the health and welfare of the communities in which they operate. That, of course, begins with ensuring that their employees can adequately provide for their families.

The economist Milton Friedman, in his “Capitalism and Freedom” famously stated that the sole role of business begins and ends with maximizing shareholder value. Any other view, he said, was fundamentally subversive.

As Elizabeth Warren has pointed out however, business relies on social order. Businesses need and utilize the infrastructure provided by the taxes paid by, and with the agreement of citizens.

The Tipping Point

A recent article (Corporate Social Responsibility: Irresponsible?) asks the question “CSR introduces into the business context a moral disposition towards people and planet. According to critics, this moral disposition is uncalled for: it is sickening the business. Is this critique just?”

I think that the question is out of date because we have reached a tipping point.

In his recent column “the emperor has no clothes”. Paul Gilding, quoting Thomas L. Friedman in his October 11, 2011 New York Times column is clear, “The market system that has delivered so much to the world over the last century – brought great technology, alleviated so much poverty, produced a better life for billions – is now destroying itself”. So in this environment I think that the question is “what is sustainable?”

Whether the sole objective of business should be profit or not, is no longer the question. What the role of each of us, citizens, or citizens collectively as corporations play in society is the question.

Individual citizens, collectively corporations (because of course, corporations are made up of individuals) all have a role in maintaining a sustainable society, country and planet. And it is clear that the path we are on is unsustainable.

There is an interesting symmetry between the “Arab Spring” and “Occupy Wall Street” movements. Both are grass roots rebellions against the status quo. Both movements are telling the world that enough is enough. Both are saying that the unbridled greed of free market capitalism no longer provides an equal playing field on which we may all compete. And, I think, we’ve reached a tipping point and citizens feel it and know it.

I often chuckle at politicians and business leaders who articulate positions that I know are not what people are feeling. Our modern political and business class seems to think that they can tell people things that are diametrically in opposition to the way people actually feel. No they can’t. People know the truth of how they feel about themselves, society, their place in it and what the reality of their lives is.

Those things that individuals feel on a visceral level cannot be denied. A Herman Cain, for example, can tell us that if we’re not rich it is our own fault. But people know the truth. People who have worked hard all their lives, people who have done the “right thing” and who feel left out of the mainstream of society cannot be fooled. They know how they feel. They know the truth of their own reality.

 So, whether a corporation’s sole purpose is to create a profit or whether they have a larger responsibility is no longer the issue. We as a people are in trouble and we know it. The tipping point has come. The issue is that citizens are now demanding fundamental change in the system. The big question is how the system will respond.

Corporate Social Responsibility has, in a very few years, become a quaint notion. The question is now how corporations will respond to the idea that they have, not a responsibility, but a role to play in the constructive betterment of society. The question is no longer one of “corporate social responsibility” but of “corporate social contribution”. Citizens are demanding that corporations contribute to society and will reward companies that do, and punish those that don’t. Those corporations that figure this out will prosper. Those that don’t will, I think, find the road ahead very rough.

The Occupy Wall Street movement is smart. It’s utilizing technology and new media. Its reach is broader and deeper than any insulated corporate suite can imagine. Anyone who thinks that these demonstrations are a mere aberration that will pass quickly is deluding themselves.

While globalization has lifted billions from poverty at the same time unbridled free market capitalism has disenfranchised individual citizens globally as well. The truth is that there are not enough resources to support all of the consumers that globalization has produced. The system has become unsustainable. People are feeling this. They feel this everyday at the gas pump and at the grocery store. They feel it when they read about outsize corporate salaries and bonuses and they feel it every day when they try to balance the family budget. Where they once had “caviar wishes and champagne dreams” people today are merely stretching to survive. What’s worse is that they now feel that their children and grandchildren’s futures are not very promising. Ask the parent of any recent college graduate.

The world is an assemblage of individuals and individual citizens want their due. They are demanding it. They will not rest until their individual dignity is restored. It will take a realignment of values to do that.

We are entering a new era of citizen activism. People are demanding change. They will reward those companies that constructively participate in the reformation that is coming and punish those that don’t.

This brings me back to “corporate social contribution”.  Professor Michael Porter of Harvard terms what I call “corporate social contribution” “creating shared value”. He defines CSV as “creating economic value in a way that also creates value for society by addressing its needs and challenges. Businesses must reconnect company success with social progress. Shared value is not social responsibility, philanthropy, or even sustainability, but a new way to achieve economic success. It is not on the margin of what companies do but at the center. We believe that it can give rise to the next major transformation of business thinking.”

The lesson here is that the time has arrived where a corporation’s contribution to society is no longer an option. While charitable giving, volunteer programs and the like are fine they no longer come even close to what citizens consider a contribution to the betterment of society. Much more is required because the gap between the ultra rich, or the merely rich and the rest of society has become unsustainable.

As Gilding points out, “But are “the 1%” really acting in their own interests? Can they secure even their own future this way? In reality, we now live in a globalised and highly connected world and there are no castles for the rich to hide in. While it sounds plausible and makes good rhetoric to paint a picture of the rich hiding away in their gated communities with private security, this is not practically sustainable. Consider the lessons of various leaders in the Middle East who recently had their castles plundered and their militaries turn against them.”

“Besides we now know that extreme inequality doesn’t work for anybody. There’s plenty of evidence that highly unequal societies are not good places to live, even for the rich. They are more likely to elect extreme governments and they are less safe, less healthy and less stable.”

“So it’s time for “the 1%” to engage. Ironically, if they listen carefully, they might even find in Occupy Wall St the movement that saves capitalism from itself. Markets when properly constructed and guided by governments who are acting for the collective good are a powerful way to bring many positive things to society. But uncontrolled markets, where greed takes over and social benefit takes a back seat, are more than capable of causing systemic collapse. Then we will all lose and there’ll be nowhere for anyone to hide.”

The Need to Change the Face of The Marketing Message and the Need to Reach Out to Consumers Has Never Been More Apparent

The future battle for the greater market share is going to be fought on different terms. The new battle ground is over corporate social responsibility and where and how the consumer learns about a company’s CSR initiatives is of great importance to them.

Too many organizations still use CSR as window dressing or as a means to cover up other not so attractive aspects of their products, their production or their internal policies. Consumers are becoming wary and looking for ways to gain deeper knowledge into the practices of the companies that they trade with. They are looking for transparency and want to know that CSR policies permeate throughout the entire corporate culture.

Despite the recession, or maybe because of what consumers perceive to be the cause of it, consumers are prioritizing social responsibility when choosing between similar products from various sources.

This is a global trend that marketers across the board need to understand and respond to.

A recent study, the Cone/Echo Global CR Opportunity Study, a 10-country survey, couldn’t be clearer. Its key findings indicate that 81% of consumers say that companies have a responsibility to address key social and environmental issues. 93% of consumers responded that companies must go beyond legal compliance to operate responsibly and a whopping 94% of consumers say that companies and must analyze and evolve their business practices to make their social and environment impact as positive as possible.

The rewards for companies that are perceived as being responsible can be vast as will be the punishment for brands that don’t. 94% of consumers said that they are likely to switch to a brand that supports a cause if both brands are similar in price and quality. 94% said that would buy a product that has environmental benefits and 93% said that they would buy a product associated with a cause.

The challenge for corporations is clearly stated in this study. Globally consumers want companies to be a force for good. They unambiguously want to do business with companies who devote their resources to address societal issues.

 How corporations respond to this challenge will determine the winners and losers of the future. Most importantly, how companies reach out to consumers to demonstrate their responsible social and environmental policies will be crucial.

We live in an interconnected world. Today’s information technology makes it easy for consumers to find the information that they need to make responsible decisions. While in the past consumers could only assess a products contents from the packaging, today consumers have vast resources available to assess a corporations CSR initiatives on a global scale. Thus it is imperative that corporations realize the need to reach out consumers and engage them with the information they are asking for where those consumers are looking for it.

I’ve been an Internet evangelist for nearly two decades now. We all know the power and the reach of the Internet. Consumers are looking for deeper sources of information and knowledge and the Internet is where they are looking for it. In fact 89 percent of consumers expect companies to use both traditional and new media channels to reach them.

Corporations need to realize that reaching out to the consumer and transparently conveying their CSR message is a high priority for consumers.

Making a Profit through Social Enterprise

In my last post I told you about the times that I want to take a hammer to my computer. But there are plenty of times that I just want to wrap my arms around it and hug it as hard as I can. Those are the times when I read something that truly inspires me. This is one of those times.

Nobel laureate Muhammad Yunus, the founder of Grameen Bank in Bangladesh is a visionary. He sees beyond the typical, the average and the mundane. He sees possibilities where others don’t. He is able to articulate simple but impactful ideas and is able to inspire others to take action.

Yunus had what he described as a “casual lunch” with Franck Riboud, the chairman and chief executive officer of the Groupe Danone, the French dairy giant. 

What grew from that discussion was a simple yet radical idea, bringing low-cost highly nutritious yogurt to hundreds of thousands of malnourished children in Bangladesh.

According to Yunus “It took just a few minutes to convince [Riboud] that an investment in a social business is a worthwhile thing for Danone shareholders, even though it will not give any personal dividend to them,” Yunus says. “He agreed to the proposition immediately. It took somewhat more time to fix up the modalities, the product, the financing, tax and regulatory issues, new yardsticks for evaluating business and many other such details.” 

According to an article in the Jakarta Post, “production started in February 2007 at the first factory at Bogra, 50 kilometers north of Dhaka. In line with Yunus’s vision, it was constructed in an environmentally friendly manner, harvesting rainwater to reduce the pressure on groundwater. Solar energy runs various machines.”

“It was Grameen’s first such partnership, set up with initial capital of $1 million. Danone was a lure for other companies to come forward to work with the Grameen family. So far, those that have followed include the French company Veolia Water to form Grameen Veolia Water, BASF of Germany to form BASF Grameen, Intel to form Grameen Intel and Adidas Group to form Grameen Adidas. 

Yunus’s vision requires companies like Danone and the others to set up what amount to parallel companies that are aimed at achieving one or more social goals. The companies must cover all costs and make a profit while at the same time achieving social objectives such as improving health care, housing and financial services for the poor, nutrition for malnourished children, the provision of safe drinking water and the development of renewable energy. 

While the parallel companies, like Grameen Danone, are allowed to make a profit, the investors can only recoup their original investment. The profit stays with the parallel company for expansion and improvement to work for financial and economic sustainability in an environmentally friendly ambiance. The work force gets market wages with better working conditions.”

Grameen’s partnerships with private industry are a wonderful example of not-for-profits and for-profit corporations working together to achieve socially beneficial change by coupling the power of corporations and the vision of NGO’s and not-for-profits to use product development in a way that benefits everyone throughout the supply chain..

Bringing not-for-profits and corporations together to produce change and social benefit is a model that can be duplicated easily. All it takes is a little creativity, some vision and thinking about product and market development in a new way.

There are plenty of ways to produce profit. You just have to look for them. 

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On a sadder note I want to acknowledge the life of Wangari Maathai who passed on Sunday. Few lights shined as bright has hers, few of us have had such impact on on so many lives. She will be missed.

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CSR Is Not a Zero Sum Game

There are times when I want to take a hammer to my computer. Those are times when I read something that presents a position that I find either preposterous or dangerously misleading and off the mark. This is one of those times.

A press release containing the comments of Mark J Herlan, Owner of The Examiner, caught my eye this morning (here). Mr. Herlan comments on an article that appears on eHow (What Are The Disadvantages of Corporate Social Responsibility?) that characterize CSR as a corporate activity that is a cost rather than a benefit to the corporation and a threat to the bottom line and the interests of shareholders.  

But this thinking fails on several fronts. It fails because today’s markets reward companies that align with their values and they punish those that don’t by rewarding their competitors.

On Triple Pundit yesterday, author Joe Lawless the Executive Director of the Center for Leadership & Social Responsibility, in his article titled Why Should Your Business Should Care about Corporate Social Responsibility, is clear on this issue: “The debate about business and social responsibility is really a false debate.  It assumes an either/or position that doesn’t exist.  Business can be both profitable and socially responsible.  This new age of free-flowing information is actually bringing about a reverse paradigm where those who are not socially responsible will not be profitable.  The old, worn-out argument is that the only purpose of a business is to create value for its shareholders.  This is the false argument: that profit maximization and social responsibility are mutually exclusive.  They aren’t.”

Thinking that CSR and profit are mutually exclusive is a failure of imagination. It’s also a failure to understand the values that a large and growing percentage of consumers embody today and what is influencing their buying decisions. It’s a failure to see greater possibilities for new markets and new sources of profit.

Tom’s Shoes does it. Coca Cola, through its clean water initiative in Africa is doing it and so can any company that has the vision, the creativity and the will to develop products and markets that align with the needs of society.

If you think you can’t, you can’t. If you think you can, you will. If you do your company will create long-term sustainability. If you don’t, your competitors will. 

Corporations Must Make Positive Social Impact - Nonprofits Can Profit From Those Impacts

In its September trend report, JWT surveys trends in Social Good, or the drive to be responsible citizens and effect positive change.

In a recent press release Ann Mack, director of trendspotting for JWT said “A number of macro trends are influencing social good initiatives today, including the call for greater transparency, as well as greater corporate and brand participation, rapid urbanization and advancements in technology. “As a result, we’re seeing less ‘goodwashing,’ [and more] creative strategies for urban renewal and innovative new donation channels from for-profits and nonprofits alike.”

The report explores four key trends: 

• The End of Goodwashing: Today’s consumers expect greater accountability from nonprofits as well as brands involved in cause marketing—e.g., exactly where the money is going and what impact it’s having. More transparency will mean more focus on effecting real change and less “goodwashing.” 

• The Rise of Shared Value: More corporations are starting to shift their business models, integrating social issues into their core strategies. The aim is to create shared value, a concept that reflects the growing belief that generating a profit and achieving social progress are not mutually exclusive goals. 

• Creative Urban Renewal: As the global population becomes more urbanized and cities boom, brands are becoming key partners in enabling creative strategies for urban renewal—improving local environments, adding beauty or helping to bring communities together. 

• Ripping a Page From the For-Profit Handbook: Nonprofit organizations are increasingly adopting for-profit tactics, fusing social consciousness with business acumen and focusing on achieving visible change. 

As More companies — PepsiCo, P&G, and smaller companies like Timberland and Toms Shoes make social-good and cause-marketing efforts central to their core brand identity and consumer marketing new opportunities are created for nonprofits to align with companies that are looking for ways to make social impact. This impact creates opportunities for profit making enterprises to enhance their bottom line and create long-term sustainability by partnering with nonprofits who make the impact that the corporation is looking for.

These trends have far-reaching ramifications for nonprofits; the second point, The Rise of Shared Value being the most important for nonprofits.

By appealing to companies based on based on the outcomes they produce and by aligning those outcomes with the goals and aspirations of the companies that they are appealing to nonprofits can create entirely new channels of funding by creating value that is shared by the nonprofit, the for-profit and the community.

By focusing on outcomes and seeking partnerships with companies that have a stake in those outcomes nonprofits create the ability to go beyond making appeals based on an ethos of “giving because it’s the right thing to do”. They appeal to companies based on the impact that the results of the nonprofit’s programs will have on that company’s bottom line.

This requires nonprofits to have a critical look at their operations and focus on the impact that their programs produce. Then the organization needs to examine those outcomes and determine what economic impact those outcomes produce and find partners who benefit economically.

In some cases, by taking a critical look at the impact of a nonprofits programs, many will discover entirely new “products” that can be sold to those that are willing to pay for them.

Where there is economic impact there are people willing to pay for it.

Non-Profits are Businesses Too

“We’re a business and if we don’t approach it that way, we’re not going to be successful,” Curtin said to nearly 60 nonprofit leaders at a recent conference hosted by Booz Allen Hamilton at its McLean headquarters”. So quotes an article from The Washington Post’s Capital Business section (In down economy, nonprofits explore profit-making ventures).

The point is that non-profits are businesses too and small and medium sized organizations need to follow the lead of their larger brethren and begin to search for ways to earn profit from their activities.

As the article points out “The Red Wiggler Foundation in Montgomery County, Maryland, operates an organic farm that provides gainful employment for adults with developmental disabilities. According to its IRS 990 form, Red Wiggler’s contribution and grant income dropped by more than half in 2010. But that same year, its program service revenue—money it raised at least in part by selling the produce from the farm—rose 41 percent.”

Most non-profits have Chief Development Officer’s and it’s time for non-profits to develop salable products and hire a Chief Marketing Officer whose responsibility it is to market the organizations products to buyers who find value in the organizations results driven and metrically supported output. This requires that non-profits refocus from their activities to the benefits produced by their activities. The Chief Marketing Officer’s primary responsibility is to find customers who value, in monetary terms, the results the organization produces.

In order to prosper in the future non-profits will have to think “out of the box”. I’m not talking “thrift shops” here. This is about creating business alliances with companies who value what you do and see a potential for a positive contribution to their bottom line.

The first step is to do a thorough analysis of what outcomes the non-profit actually produces or is capable of producing and then developing metrics that prove those outcomes. The next step is to find “customers” who value the outcome and then sell them your product.

Corporate CSR Initiatives Must Be Authentic

Rohit Bhargava, social media expert and SVP-global strategy & marketing of Ogilvy PR Worldwide’s Washington office is quoted as saying “People aren’t just buying a product or service, they’re buying ‘into’ a positive experience.”  

Essential to today’s marketing mix is consumer engagement. Consumers are looking for “authenticity”, something, as I have noted (here and here), that is found lacking in many corporate CSR reports. This is because their cause marketing initiatives aren’t aligned with their core business practices and their brand’s image. In order to create positive PR and be authentic in their customer and their business partner’s perception CSR initiatives must be in alignment with the company’s brand image. More importantly these initiatives must be authentic, create shared value and have a positive impact on the environment and society.

CSR must not be an afterthought or viewed as an expense but must be integrated with the company’s core business practices and foster both positive internal change and external communications. When done properly these initiatives contribute to profitability and long-term value. Simply, it must be part of a company’s core mission - part of its everyday business.

In a recent Forbes Magazine interview (http://www.forbes.com/sites/csr/2011/08/31/behind-every-responsible-company-is-a-p-r-agency/) Ruder Finn’s senior vice president Sarah Coles is quoted as saying “There is a demand today to put together more strategic CSR programs, programs that are distinguished, unique to the company, and meaningful. Consumers are smart these days. They can see when something is reactionary and when it has been a long-term commitment. They trust brands that have long-term missions and whose programs are in sync with brand value.”

Consumers are waking up. They are no longer allowing corporations to deceive them by promoting CSR initiatives that are an isolated concept or are inauthentic in their opinion. It’s no longer acceptable to treat CSR as a superficial “do good” exercise while the corporation engages in business practices that have a negative impact on society or the environment. What consumers are demanding is that corporations incorporate sustainable practices into all of their business activities and have an overall positive impact on society at large.

The recognition that consumers are demanding more has caused the media to become increasingly interested in distinguishing mere window dressing or superficial altruism from genuine ethical business practices. They will report negatively when warranted and reward positive impact with positive PR.

One effective way to launch initiatives that bring positive press and consumer opinion is to support community organizations whose missions are aligned with the image and objectives of your company.

One example of this alignment is ARAMARK, the global food services, facilities management, and uniform and career apparel supplier. ARAMARK has partnered with Atlanta Mission.

Atlanta Mission is a long-time provider of services for the homeless that strives for “healthy independence” for its clients, created through personal development, including health and wellness education. ARAMARK is working with Atlanta Mission to revitalize The Shepherd’s Inn for the homeless and host a Health and Wellness Fair for community residents. ARAMARK supports the community and gets great press for doing so. You can read more about this initiative here.

Sustainability and the Corporate Bottom Line

A newly released report (http://www.ey.com/Publication/vwLUAssets/Sustainability_extends_CFO_role/$FILE/CFOSustain.pdf) from the accounting and consulting firm Ernst & Young focuses on the changing role of the corporate Chief Financial Officer (CFO) as issues of sustainability become more important to corporate stakeholders, the ability of corporations to raise capital and the corporations bottom line.

According to the report institutional investors have recognized the importance of environmental and social impact on corporate performance and long-range value.

Investors, customers and other stakeholders are increasingly connecting financial performance to social and environmental impact. As this trend evolves the role of the CFO is expanding to include an understanding, and most importantly, measuring and managing the social and environmental impact of their corporations activities.

This is good news for societal stakeholders and offers great opportunity for those of us who are engaged in the new social marketplace.

What this means for non-profits is that it is becoming ever more important that we focus our fundraising appeals on the outcomes that we produce.

Corporate donors are inundated with appeals from non-profits that are based on the “feel good” aspect of what we do. In this new environment we must align our appeals, based on the measurable outcomes that we produce, with corporate financial goals. This means that instead of appealing to these potential donors based on the emotive aspect of what we do we must align measurable impact and “sell” this impact to corporations based on their sustainability goals.

A great example of how this works is a group that tackles the problem of long-range sustainability of women survivors of domestic violence. This organization no longer appeals to donors based on the “good work” that it does. Let me explain.

This organization knows that at least twenty-five percent of all women in America will at sometime in their lives be victims of domestic violence. That means that twenty-five percent of all of the women working in corporate America will be victims and that most of the cost of this violence is borne by the company’s that they work for in lost productivity and increased health-care costs. So this organization appeals to the corporate bottom line marketing and “selling” the corporation a program that will increase the productivity of these women and reduce overall corporate health-care costs. The mission of the organization, to get women out and keep them out of danger is marketed to corporations not based on the idea that they are helping these women (which they are) but based on the impact the program will have on corporate profit. This group has developed an appeal based on Return on Investment (ROI), not on “helping women in need”.

As non-profit America faces reduced or eliminated government sponsorship and diminished levels of giving non-profits must refocus their thinking and determine what impact their work has on the corporate bottom line. By doing so non-profit organizations tap into the social-benefit “market” and unleash a powerful new way to sustain the organizations work.

I receive a newsletter from a very insightful man, Stan Hustad (www.stanhustad.com). In his latest edition Stan says “Soon the political parties in America will be introducing new programs to “create jobs.”   Hear me on this, the only jobs really worth having going forward will be the ones you create yourself”.

In our context replace the word “job” with the word “product”. Those non-profits who create saleable “products” will thrive and those that don’t may not be able to sustain themselves.

Aligning Your Non-Profit’s Needs with Corporate Needs

Corporation engage in Corporate Social Responsibility (CSR) initiatives to satisfy their own needs because when they are properly implemented CSR initiatives contribute to shareholder value, the public image of the corporation and the overall well-being of the corporation and its employees. Those needs are based on the self-interest of the corporation and sometimes its executives but always because of the impact on the corporations’ bottom line.

In order to be successful in today’s extremely competitive environment non-profits need to align their needs with those of the corporations from whom they seek support.

As we all know, the vast majority of non-profit appeals are unsuccessful. That is because corporate donors require economic impact. This impact must be measurable and appeals must be made based upon the value that is created for the donor.

For far too long most non-profits have appealed to potential donors based on the wrong values. Most appeals have been made from the perspective of the needs of the organization seeking the support. Instead, in order to be successful today, appeals must be made from the point of view of the needs of the donor.

Where once we could appeal to donors based on the emotive, or “feel good” aspect of the work that we do we must now make our appeal based on the outcome of what we produce and how that outcome adds economic value to the corporation. In other words, we must demonstrate to corporate donors the return on investment the donor will see from their “investment” we are asking them to make in the work of our non-profit.

Instead of “begging” for money non-profits must sell the impact of their work in the same way that any company seeking an order from another must do. Corporations will buy your product, just as they do plant and equipment, based upon the value it produces for them.

Corporations make decisions for rational reasons, that rationale being profit – the impact on their bottom line.

The good news is that many corporations have begun to value social change as much of the social change we produce directly impacts their bottom lines. By seeking corporate support based on the profitable “outcomes” we produce we appeal to donors with a completely different value proposition, one that aligns with their need for profit.

This requires that non-profits look on their work in a new way. Forget about the good work that you do - the stuff that makes us all feel good. Instead, focus your thinking on what value you create from the good work that you. Concentrate on the social impact that you make and how the outcome of your work produces economic outcome. Then repackage your message so that it aligns with the needs of corporations in your community and demonstrate to them how the work that you do will impact their bottom line.