The Debate Over Corporate Social Responsibility Heats Up

by | May 31, 2017 | Business Feature

Corporate social responsibility, also known as CSR, is the subject of ongoing heated debate throughout the business community. CSR is broadly defined as doing business in an environmentally and socially responsible way, as well as supporting initiatives that benefit society at large. That’s quite a large umbrella term and it’s often used interchangeably with charity. Charity is one component of CSR, but companies that practice corporate social responsibility are targeting a bigger picture. Although it may seem obvious that CSR would be a good idea for corporations, within the business world it has its supporters and detractors.

What It’s All About

According to Forbes Magazine, consumers have been shown to enthusiastically support charitable giving by corporations, with findings from public opinion surveys revealing that “83% of consumers think companies should support charities and nonprofits with financial donations.” Charitable giving is CSR at its heart. It’s the simplest way that a company can make a contribution to a worthy cause it supports. In terms of charity, the debate over CSR isn’t as heated as when it comes to discussing broader CSR issues such as the return for companies on their investment in terms of charitable giving.

Voices of Dissent

While CSR was overwhelmingly praised in its early years, more recent writings on the topic have reviewed findings and come to more critical conclusions. Although almost no one denies that charitable giving is a positive way businesses can make a contribution to their communities and the larger society, executives are raising questions about the best way to practice CSR and affect social change with their contributions. In an article from the Forbes Leadership Forum titled “The End of Corporate Charity, and How Companies Should Prepare,” businesses are encouraged to “stop funding charitable initiatives that don’t get results.”

New Imperatives for Responsible Giving

That imperative – to stop giving money to projects that aren’t producing measurable change or benefit – puts the onus on companies to be more discriminating about where their charitable contributions are being invested. It’s therefore increasingly important for companies to perform due diligence before they choose a charitable project to become involved in and to search out charities with proven track records.

There are many foundations whose leaders come from a corporate background and are therefore well-equipped to manage the delicate balance between charitable giving and results-oriented initiatives. One such organization, founded by Donald Burns, is guided by a successful businessman who developed his charitable giving specifically to benefit “community-oriented causes.” A brief glance at the foundation’s website turns up a host of articles that clearly outline the projects it has supported and their results.

Giving in Practice, Not Theory

The range of projects that corporations can support with their giving is vast. It helps to get an idea of some of the most common initiatives and how they are carried out. Continuing on with the example of Donald Burns, there are several ways an organization can make directly an impact on the local community through its charitable contributions.

The most common example of giving is through straightforward funding. One example of this from the aforementioned foundation is its funding of the Daniel E. Ponton Fund for the Neurosciences. The foundation’s funding made a direct impact that was seen in a variety of real-world results, such as improving physician housing in Malawi, building homes for patients in Rwanda and Malawi, and forwarding important research on brain tumor therapy. This is a clear demonstration of putting into practice the admonition to avoid giving to charitable initiatives that don’t get results.

Beyond Just Funding

Straight donations and funding aren’t the only way a company can invest its charitable contributions. There are many other creative ways that organizations can sponsor initiatives that produce concrete results in the community and society at large. Another example from Donald Burns is through funding apprenticeships. This type of program is a win-win for both the organization that sponsors the apprenticeship as well as the organization that receives the grant, and it doesn’t fall into the trap mentioned in the previous article regarding throwing money away blindly without seeing visible and measurable results.

The Foundation funded an agricultural apprenticeship for budding farmers through Sustainable Nantucket, “a grassroots organization that encourages local residents to produce and purchase locally sourced goods.” During the apprenticeship, she interacted with the local community by participating in local farmers markets and selling the produce she had grown during her four months learning on a community farm. The apprentice gardener gained skills that would enable her to eventually build her own sustainable agriculture business.

Clear-Cut Giving Brings Results

Although the debate over CSR will continue, the direct impact that charitable contributions can have on local communities is beyond dispute. When an organization carefully selects where to invest its donations and then closely follows how those funds are being applied in the real world, the benefit to both corporation and charitable organization can be truly significant.

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