During the 2013 holiday season, Mazda launched its Mazda Drive for Good Campaign to raise funds for St. Jude’s Children’s Research Hospital, the American Heart Association, the American Red Cross, and a collection of charities supported through the Mazda Foundation. Similar company efforts to support social causes, such as Nivea’s donation to the Breakfast Club of Canada, have long been part of corporate social responsibility (CSR) efforts.
But it’s hard not to wonder, why is a car company is putting its efforts toward addressing medical research issues?
Business and CSR “align” when the selection of social causes, methods of intervention, and implementation partners fit with the existing expertise and resources underlying a company’s business success.
For example, Pfizer capitalizes on its expertise in the pharmaceutical manufacturing business by donating medicine to a wide range of health initiatives in developing countries. Through its RTC Fellowship program, pharmaceutical giant Merck draws on its employee’s expertise in health issues to support public health NGOs.
It’s reasonable to think that a company with health industry expertise would be better aligned than a car company to support health-related causes. A health product company can donate medicine at production cost or provide expertise to a medical research or public health NGO. Greater value, same or less cost. On an individual level, people from related sectors—like health care product developers and public health workers—can share experiences and knowledge, fostering empathy between partnering organizations and bolstering long-term partnership success.
So how could a car company’s CSR initiatives achieve alignment with social causes and the goals of NGO partners?
Thinking hypothetically, the Global Alliance for Clean Cookstoves could benefit from engineering skills. Many car companies have been perfecting cleaner burning systems and efficient production methods for years, overcoming design and production challenges in the process. These companies could give not only money, but also valuable knowledge, to save children and their families.
But companies are not charities. And the jury’s out on whether or not CSR can provide strong return on investment (ROI). CSR initiatives live outside core business activities and hold a tenuous position within the company, replaced if the championing manager leaves or cut first if finances become tight.
But when CSR initiatives align with business goals and resources, a stronger case can be made for maintaining these programs and opportunity for increased ROI is greater. CSR initiatives don’t have to drive a company’s success, but to be sustainable they do need to address the business reality of ROI.
When alignment is achieved, companies earn consumer trust, directly benefitting business and brand. CSR initiatives have struggled to overcome consumer skepticism for years. Consumers believe only 5% of companies deliver on social responsibility promises. This is likely in part because, say, car companies are engaging in CSR for medical research. “Saving children” may beat “fixing stoves” on the PR front, but without alignment and with an increasingly informed consumer population, skepticism triumphs and business takes the hit.
In the past, CSR has been a way for companies to do good.
Alignment presents a sensible and compelling narrative of a caring company that is, to its core, good.
And it’s not just the company’s ROI that benefits. Social ROI for implementing partners increases when alignment is achieved. Non-profits may find more interests, skills, and experiences in common with companies that pursue initiatives related to their business practices. Cultivating empathy between partners through shared experience and channeling relevant resources greatly benefits social causes.
When a relationship based on empathy and skill-sharing is achieved, a company is more likely to commit to a particular issues or initiative. Longer engagement with an issue presents more opportunity for companies to gain potentially profitable experience or understanding to support a feedback loop whereby philanthropically driven actions can drive business growth and vice versa.
If a social cause and business goals align, it may even be possible to integrate the cause into overall business strategy. CSR can transition from a PR stunt to a long-term market research, brand expansion, product development, and business growth asset.
For example, Danone, working with Grameen bank, developed a yogurt to help address nutrition issues in Bangladesh. Danone entered a new market, learned about expansion into developing markets, and established a flagship initiative to attract socially-minded hires. All while increasing access to nutritional food for the poor in Bangladesh.
Widespread acclaim quickly transitioned to criticism when the new enterprise functioned at a loss and did not have the magnitude of impact hoped for in rural communities. It is common for new ventures to struggle, and Danone was dealing with the added challenges of developing a sustainable business to support a social cause in a country it had no prior presence in.
But what’s especially worth noting is Danone’s response: Danone revised its model of intervention and expanded with its own long-term business goals in mind. It is doubtful that such dedication and ability to respond would have emerged in a Danone project supporting animal shelters or another issue less relevant to Danone’s core business.
Not every aligned CSR initiative will lead to a new revenue stream, nor does it have to. But alignment allows companies to apply their resources to a social cause in a way that increases potential for ROI. And if the social cause does find its way into the business portfolio, the commitment will greatly benefit both company and social cause.
There is always potential for good when companies donate money and time to causes they believe in, no matter how disconnected from their business. But companies could do so much more with aligned CSR.
When the Honest Co., a toxin free baby product company, donates supplies and employee time to Baby2Baby, a nonprofit providing products for children to families in need, that makes sense. And CSR should, ultimately, use resources in ways that are efficient and that make the most sense, to value both social cause and company.
If we allocate our resources most wisely, with alignment in mind, benevolence can be good for business, and business can be better for us all.