ACCORDING TO A 2015 ARTICLE FROM the London Business School, corporate social responsibility (CSR) has ‘failed both companies and society because initiatives are almost always detached from organisations’ core commercial activities’. Look at the Volkswagen emissions scandal and their admission of a ‘defeat device’ in diesel engines that could detect when they were being tested, changing the performance accordingly to improve results. In the wake of this admission, an incident of global magnitude erupted that saw a CEO resign and the delicate ‘reservoir of trust’ between company and society shatter. And this kind of incident is not unique. In recent times, the world has witnessed an increase in ‘naming and shaming’ of iconic brands, and exposure of scandalous trade practices.
CSR has become a global industry. Most companies employ CSR managers, vice presidents and experts; armies of CSR consultants are on offer and hundreds of CSR awards are distributed every year. Yet, at the heart of any company scandal is often failed CSR. The problem with CSR is far-reaching and not restricted to any one industry, with most companies’ well-meaning attempts to add value by investing into the lives and communities where they operate falling short of the positive impact they set out to create.
This failure shines a spotlight on the inefficacy of shared value as a sustainable model for reputation, engagement and long-term growth. It proves that lean operations, collaboration and good intent are not enough to sustain connection with society. This is evidenced most strongly by paralysing inertia, the result of increased demands for radical transparency and accountability, and fear of loss of control.
The Organization for Economic Cooperation and Development (OECD) is a unique forum where the governments of 34 democracies with market economies work with each other, as well as with more than 70 non-member economies to promote economic growth, prosperity and sustainable development. According to its website, the mission of the OECD is to promote policies that will improve the economic and social wellbeing of people around the world. Roel Nieuwenkamp, Chair of the OECD Working Party on Responsible Business Conduct, argues,
CSR is often associated with philanthropy and volunteer activities in the social sphere, rather than long-term sustainable development. This is especially true in regions where CSR activities are limited to companies building schools, or sponsoring local activities. Company CSR reports are often largely descriptions of feel-good projects that ‘give back’ to society.
Maintaining competitive advantage, however, demands an evolution in corporate affairs and external relations practices from the heavily scripted and persuasive nature of old-school CSR and communications initiatives and urgent ‘level up’ of leadership, skills and experience. The invitation to organisations is to come out from behind the vacuous facade of CSR and radically engage with society as ‘artisans of connection’.
Under the OECD’s guidelines, they don’t use ‘CSR’; instead, they discuss ‘responsible business conduct’ (RBC). According to Nieuwenkamp in an OECD blog piece,
Responsible business conduct means that businesses should make a positive contribution to economic, environmental and social progress with a view to achieving sustainable development and that businesses have a responsibility to avoid and address the adverse impacts of their operations. While the concept of CSR is often associated with philanthropic corporate conduct external to business operations, RBC goes beyond this to emphasize integration of responsible practices within internal operations and throughout business relationships and supply chains.
The evolution of corporate social responsibility to a model that heralds conscious leadership and co-creation of stakeholder value, is an imperative for any organisation that wants to make a difference.
The Oxford Dictionary defines philanthropy as ‘the desire to promote the welfare of others, expressed especially by the generous donation of money to good causes’. Now consider that at the time of writing around 600,000 not-for-profit (NFP) organisations operate in Australia, competing for the same donor dollar. The bulk of these organisations are small, non-employing organisations that rely on the voluntary contributions of members.
That all adds up to one thing: institutional philanthropy is in crisis. It is a dying fundraising model trapped within an even bigger dying operating model. The situation is complex; a foreboding sense of redundancy is exacerbated by the inherently competitive and non-collaborative nature of charitable organisations. Most deeply affected are those that operate within the same industries or spheres of influence, reliant upon goodwill donations to survive. Consequently, countless charities are all fishing for donor dollars in the same pond and are relentlessly bludgeoning donors to give without context, which has led to donor fatigue and, ultimately, desensitisation of the very people with the means to solve society’s problems.
Creating awareness of a cause and actually getting people to give to this cause represents only a small aspect of philanthropy’s challenge. Without radical intervention and overhaul, many charitable organisations will cease to exist, or pale into insignificance as a direct consequence of clinging to a one-size-fits-all broadcast approach to advocacy that fails to connect and inspire. Charities’ demise will not be for lack of noble intent but, rather, due to a failure to embrace a co-created operating model for sustained advocacy and impact — a context that is amplified by changing donor perceptions and generational shifts.
The truly sad thing is that many charitable organisations under threat are engaged in extraordinary work. Yet, how they evolve from passive aggressive and reactionary tactics to a place of conscious leadership and co-ownership (a context where mutual value is forged across the entire ecosystem of donors and stakeholders) will determine their future survival and sustainability.
As the philanthropic landscape changes, the way donors perceive and approach giving will continue to evolve. The key trends driving change to be aware of now include:
Acute understanding of these major trends is imperative for any organisation striving to create and sustain social impact.
Donors have an expanded and highly proactive view of which groups will successfully develop solutions for society’s challenges — and of who should be responsible for funding them. The prevailing view is that non-profits and public–private partnerships are the most likely to develop solutions. Social and technological advancement — namely, the increased connection and knowledge-sharing technology affords, and its ability to swiftly mobilise in response to critical issues — has led to consensus among donors that specific sectors such as universities, businesses, social enterprise and religious institutions each have a specific role to play in solving society’s challenges.
What’s clear is that distinct generational shifts are driving the transformation of philanthropy, most notably demonstrated by the differences between millennials and baby boomers — two major forces in giving. According to Indiana University’s Lilly Family School of Philanthropy Giving USA 2016 report, unlike their boomer counterparts, millennials approach philanthropy with a more global, social and inclusive outlook and express more optimism about philanthropy’s ability to affect the issues most important to them. They are also more likely than baby boomers to believe almost all sectors have a role to play in solving society’s challenges, a view that is likely influenced by the interconnected world in which they’ve grown up. (The report also showed that, in 2015, giving by individuals, bequest, and family foundations amounted to an estimated 87 per cent of total giving.)
Imagine that you are walking down a busy street when, in your peripheral vision, you spy some brightly coloured and effervescent ‘chuggers’ (charity muggers) hustling money on the street corner. If you haven’t made eye contact, you know you still have time to adjust your trajectory to the other side of the street. Wait, what? Sigh. You’ve been spotted!
You quickly rehearse a script in your head, smile, and pretend to look interested. ‘Yes, of course I think it’s important to support [insert good cause]. Hmm, I’d love to donate but [insert shopping list of other important causes you financially support] so I’m not in a position to help right now.’
After some awkward silence, you walk away feeling accosted and annoyed at having to justify your assumed uncharitable self to a complete stranger. Nobody wants to be seen as ‘that kind of person’.
This scene describes the tactics of paid ‘charity’ street workers (read: students) who are trained to believe that they are carrying out a worthy task, improving people’s lives by conning Joe Public out of his money for this week’s Good Cause. In most instances, an agency takes a sizeable cut of the hourly rate that the charity in question has paid for, while increasing profits by on-selling the details of anyone foolish enough to actually stop and sign up.
But here’s something to consider — by adopting this approach charities don’t realise (or out of desperation choose to ignore) the damage it does to their brands. The situation is far more complex than people simply not caring.
I coined the phrase ‘comfy chair syndrome’ in the late 1990s in reference to the psychological disconnect and inertia that occurs when charities ‘cause bash’ people without context. Instinctively, we want to help and, in fact, are often actively engaged in causes, giving of time, money and influence. The underlying problem causing charity inertia is outmoded and irrelevant fundraising tactics that fall short of the positive impact charities set out to create, which results in a deep-seated avoidance and lack of support.
For some further thoughts on this topic, I interviewed John Kearsey from the University of Manitoba. Throughout his career, Kearsey has focused on the pursuit of purpose-driven stakeholder relations. Through both leading and being a part of teams, he has helped achieve success in million- and multimillion-dollar fundraising agendas, working with donors and alumni around the world. Using his marketing and communications experience, he has focused on higher education advancement and external stakeholder relations. In 30 years of working with donors and volunteers, John continues to be inspired by the citizenship and humanitarian commitment of those who use their generosity to make a difference in the community. See the following sidebar for his ideas and approaches.