How to Make Smart Social Investments That Pay Off
Just in time for International Women's Day, Goldman Sachs announced a $50 million seed contribution to a new fund aimed at helping close the credit gap for women-owned businesses in developing countries. The idea is to create the world's first global finance facility exclusively dedicated to serving small and medium-sized businesses owned by women.
Sounds great to me.
What's especially timely, though, is a look at how businesses, large and small, are making spot-on investments to give back to communities around the globe--and how you might do the same.
Invest with intelligence.
Too many people think of community relations and philanthropy programs as write-offs. To them, it doesn't really matter if the money is well spent--it's just the act of giving that matters. That's just silly (and, frankly, often an irresponsible use of company funds). Take Goldman Sachs--we've been hearing for years that women and women-owned businesses in developing countries are one of the smartest investments around. A wealth of research shows us that economically empowering women boosts GDP growth, productivity, and per capita income, and helps to create healthy, durable spending cycles in which more household income goes towards goods and service. This in turn improves family welfare and creates opportunities for children. Consider the fact that access to finance is consistently identified as the biggest constraint for women business owners, and you've got an investment opportunity that seems highly likely to pay off. Certainly, Goldman Sachs thought so.
It's not all feel-good, fuzzy bunnies.
Corporate social responsibility, meet a corporate mission. Baby bunnies may be adorable, tugging at the heartstrings with fluffy tails and twitching noses, but do they align with what your company is trying to achieve? Asking yourself what your company stands for is the first question you should answer when creating a rock star CSR program. That's what Chicago's Verdigris Group did. A specialist in green building and LEED administration, the Verdigris Group has made its own corporate sustainability a top priority, and has invested heavily in sustainability management initiatives like carbon offsetting and reducing daily operating waste. The result? A company that is making a difference to the planet while at the same time showing clients that it practices what it preaches. You don't radically depart from your mission in other business endeavors--so why contribute to a charity or community group that has no connection with who you are?
Size doesn't matter.
Businesses of any size, in any industry, can and do make corporate social responsibility a vital part of their practice while staying within both their means and the scope of their mission. Take the example of HEROfarm, a small marketing, PR, and design agency based in New Orleans. Living up to their business philosophy of "Do great work for good people," HEROfarm commits to producing at least one pro bono campaign each year for a local non-profit organization. In this way, they provide their community with something of value while at the same time strengthening their own skills and further developing the name recognition of their business. At Reputation.com, we provide our privacy product for free to victims of domestic violence and sexual assault and as we scale, we expect to grow our community focus areas. Yet even if you intend to stay small, it's ok to do something commensurate with your fiscal realities. Tiny pebbles still make a splash.
Giving back isn't only dollars.
Too often, giving back to the community is centered on cash to the point of neglecting other options--like employee volunteerism or pro bono work. Humana, for instance, had a great idea; they created the Humana Volunteer Fellowship. A small team of its employees gets four weeks to work full time at a nonprofit, putting their specific skills in play on a particular special project. The idea is "transformational change" for the organization and key recognition for these employees. The point? Be creative and open your mind to different ways to invest in the community.
Whether through financial investments in like-minded organizations, pro bono work, or employee volunteerism with community partners, companies have a range of options to be amazing corporate citizens. Choosing any one of them can lead not only to a stronger, better community, but also to some very important business rewards, like employee and customer engagement, greater focus on long-term thinking, product or practice innovation, and, naturally, a good reputation.