Driving Stronger Collective Impact through the New Cycle of CSR
In the eyes of American consumers today, a company's values are as important as its products and services. According to research from Cone and Duke University, 79% of consumers would switch from one brand to another if the new brand was "associated with a good cause."
Brands understand that – which is why corporate cause sponsorship spend reached an estimated $1.92 billion in 2015. But the sponsorship model is losing its value: Now that 92% of consumers want companies to show and tell them how they’re supporting causes, corporate donations and rubber-stamp event partnerships have little effect on brand perception.
For consumers to believe that a brand is truly cause-focused, the endgame must be impact. Corporate social responsibility (CSR) in 2016 has to go further than ever before – all the way to being an always-on component of a company's business model.
The corporate nonprofit sponsorships and/or CSR programs that consumers experience are now being met with more scrutiny and unanswered questions. Leaving most wondering what happens to the money after the fundraiser or event?
Though nonprofits are increasingly making their finances more transparent and data-driven, high overhead costs still plague the sector at large – leading many donors and sponsors alike to often wonder how their gifts are being applied, and whether or not they make a real difference.
Procurement of goods for program initiatives can be a particularly gray area of nonprofit operations, especially among organizations that directly serve the needy. Rightfully so, donors want to know where their giving is going, and if charities can do that effectively and consistently, they have an amazing opportunity to acquire new donors that are more likely to trust and give repeatedly. Yet according to findings from my company, 121Giving, more than half (54%) of nonprofits do not ask retailers for discounts and among those who do, 25% receive discounts of 15% or less.
As a result, even a high-dollar corporate sponsorship and/or CSR programs can reap a low-dollar impact if the funds aren't used efficiently... and how 'socially responsible' is a model where so much spend is plugged right back into the for-profit ecosystem?
More resource-focused relationships between brands and charities can help make CSR more need and impact-driven in the eyes of consumers. Given that procurement is a problem area for nonprofits, the smartest CSR initiatives can plug holes by helping charities meet their communities' needs in a direct, one-to-one manner.
When donors, charities, and brands come together, communities can see stronger collective impact powered by better cost savings and greater efficiency among nonprofits.
In an election year especially, nonprofits and brands alike should be proud that American consumers care about patronizing businesses that support causes they believe in. By using partnerships to embed philanthropy into the fabric of their business models, companies can be more than just "associated" with good causes – they can help meet direct needs in a high-impact way.
FROM THE EDITOR
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